Wage statement class action results in $100 million award

A landmark 2018 case in California is affecting the scrupulousness of employers all across the state. In Roderick Magadia v. Wal-Mart Associates, Inc, a terminated Wal-Mart stock associate led a class-action lawsuit over the details on his paycheck. 

The judge ordered more than $100 million in compensation for wage discrepancies and penalties for violations of California Labor Code. 

California Labor Code 

California Labor Code requires that employees receive accurate and itemized paychecks accounting for their hours and rates in detail. These laws dictate that wage statements that do not itemize these details accurately may result in penalties for employers. These requirements do not simply apply to base pay but also to any bonuses, meal credits and overtime. 

Roderick Magadia v. Wal-Mart Associates, Inc 

When a Wal-Mart in San Diego terminated Roderick Magadia for absenteeism, he noticed some issues on his final paycheck. Most notably, he realized that the pay period did not include start and end dates, and that his overtime, bonuses and meal credits neglected to report the pay rate or number of hours worked. Magadia brought a lawsuit against Wal-Mart that turned into a class action by many similarly- affected Wal-Mart employees. 

After an extensive analysis of pay owed against pay received, the court found that while Magadia did not have significant discrepancies in his pay, other plaintiffs in the case did. They also found that Wal-Mart had been in violation of state employment laws for reporting dollar amounts with no itemized accounting of hours or rates. 

Possible repercussions  

The judge ordered more than $100 million in damages from Wal-Mart, some to cover underpaid wages but much more in penalties for violating California wage laws. According to the National Law Review, this could set a precedent for employers to face significant fines for similar violations regardless of whether or not the employees were underpaid. 

This may give reason enough for employees to look into their paychecks for discrepancies or missing itemization. Wal-Mart is currently appealing the case.