Alerts

Employers May No Longer Print Social Security Numbers on Paycheck Stubs; Reminder: Out-of-State Paychecks Must Identify In-State Location for Cashing Privileges

Alerts / December 11, 2007

Effective January 1, 2008, employers are prohibited from including an employee's Social Security number in its entirety on wage statements. California Labor Code § 226 requires that private employers furnish each employee with an accurate, written, itemized wage statement containing nine particular items. Formerly, one of these items was the employee's Social Security number. Now employers must still print identification numbers on their wage statements, but are permitted to use only the last four digits of the employee's Social Security number or an employee identification number other than a Social Security number. This change applies to both paper and electronic wage statements. The law applies only to the wage statement accompanying a paycheck, but it is recommended that full Social Security numbers be removed from paychecks as well.

Employers who violate California Labor Code § 226 are potentially liable for the greater of each employee's actual damages or $50 for the initial pay period in which a violation occurs, and $100 per employee for each violation in a subsequent pay period. Violators may also be charged with a misdemeanor.

Given the upcoming effective date of the law and the consequences for non-compliance, employers who have not done so already should arrange to make the required changes to wage statements before the deadline.

In addition, as a continuing reminder to out-of-state employers, California Labor Code § 212 requires that the face of each paycheck identify the name of an in-state bank or state the name and address of an "established place of business in the state" where the employer has deposited sufficient funds for an employee to cash any check issued. Employers must also make arrangements to cover any fee their financial institution may charge non-account holders to cash paychecks. There are substantial penalties for failure to comply with the § 212 requirements.

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