California Labor Code 226(e) Statute of Limitations

by Jill Stimson J.D. - Updated September 26, 2017
In California, employees must file wage claims with their local Division of Labor Standards Enforcement office.

Section 226(e) of the California Labor Code requires allows employees to recover damages from employers who do not comply with the state’s wage payment laws. The California Department of Industrial Relations requires employers to comply with the state’s wage and paycheck laws governing the timely payment of wages and proper paycheck deductions. Section 226(e) provides employees with an allowable statute of limitations period to file claims against their employees for violating the Labor Code.

Statutes of Limitations

Statutes of limitations set legal timeframes for parties to file lawsuits or file claims with government agencies. In California, the Division of Labor Enforcement agency within the Department of Industrial Relations is responsible for processing employment claims against employers who do not comply with the state or federal labor laws. Once an employee files a wage claim with the Division of Labor Standards Enforcement, the Division of Labor Standards will follow the California Labor Commissioner’s administrative procedures providing an opportunity for hearing and appeals.

Section 226(e)

The California Labor Code Section 226 governs wage claims. Subsection (e) of Section 226 allows employees to request damage payments from employers who do not comply with Subsection (a) of Section 226. Under Section (e), employees may recover actual damage costs or $50 for each pay period violated, limited to $4,000. Additionally, employees can recover court costs and attorney’s fees. Subsection (e) requires employers to comply with Subsection (a).

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Section 226(a)

Under Subsection (a) of Section 226, California employers must provide their employees with paychecks at least twice monthly, provide an itemization of wage deductions, and wage compensation. Section 226(a) requires that employers maintain payroll records for at least three years for each employee. Payroll records for each employee must include hourly rate, pay period that each paycheck covers, net wages, social security, name and address, overtime and standard hours worked in that pay period. Employers should keep all records at the jobsite or central locations within the state.

Filing Wage Claims

Employees can file wage claims against employers for failing to pay wages due, making unauthorized deductions from their paychecks or failing to maintain proper records for three years. Employees can also file wage claims for unpaid overtime compensation and violation of personnel handbook policies or employment contracts. For failure to pay overtime wages based on an employment agreement or personnel policy, the statute of limitations is four years from the date of violation. For Code Section 226(e) recordkeeping violations, overtime violations or unauthorized paycheck deductions, employees have three years to file claims from the date the employer violated the Code. Employees have two years to file claims based on oral contracts or oral agreements from the date the claims arose.

Considerations

Since employment laws can frequently change, you should not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your jurisdiction.

About the Author

Jill Stimson has worked in various property management positions in Maryland and Delaware. Stimson worked for the top three property management companies in the commercial industry and focuses her career on property building logistics and tenant relationships. She holds a Juris Doctor and a Bachelor of Science in psychology.

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