Vague wage statements cost large employer big bucks: Lessons learned Critical info Walmart didn’t include on workers’ paystubs Employee wage statements should be as clear and informative as possible to prevent legal trouble, as shown by the outcome of a recent court case in California. In Magadia v Wal-Mart Associates Inc., a former employee sued the retail giant because of its paystub practices. When paying workers overtime, instead of listing the overtime rate and hours worked on the paystub, Walmart included the amount of overtime pay as a lump-sum under the heading “OVERTIME/INCT.” Also, workers’ final paystubs didn’t include start or end dates for the last pay period. They only showed the amount of the last paycheck. Lawyers for the employee said this was in violation of the state labor code, which required employers to provide workers with a written statement that included all hourly rates and the total number of hours worked at each rate. By law, wage statements must also include the specific dates for the corresponding pay period. A court agreed that Walmart was in violation of the labor code with the paystubs it issued to employees. Because the OVERTIME/INCT line item was so vague, workers couldn’t clearly determine how they were paid for the overtime hours they worked. And without the pay period dates on the final statement of pay, employees couldn’t tell whether their last paycheck was accurate. In its defense, Walmart said workers could access a statement with the pay dates for their final paycheck at the end of the normal biweekly pay cycle, However, the information wasn’t provided with the last paycheck, meaning the company wasn’t compliant with the law. Now Walmart must pay nearly $102 million in damages and penalties. Clear communication Depending on your state, you may have different requirements for what info must appear on wage statements. In addition to following all the laws, consider how clearly you’re communicating. Ask a friend outside of Payroll to identify the codes you use on paystubs. If something is unclear, it may be worth making some tweaks. More info: