Section 1 Short title
This Act may be cited as the “Pay Stub Disclosure Act”.
Pay Stub Disclosure Act
A BILL
To amend the Fair Labor Standards Act of 1938 to require certain disclosures be included on employee pay stubs, and for other purposes.
Sec. 2 Findings
Congress finds the following:
The lack of a Federal requirement to provide employees with pay stubs indicating how their pay is calculated or to allow employee inspections of employers’ payroll records significantly impedes efforts to identify and challenge wage and hour violations.
In a survey of 4,387 low-wage workers in New York, Los Angeles, and Chicago, more than a quarter of workers were paid less than the minimum wage and among those who worked more than 40 hours per week, more than three-quarters were not paid overtime. Fifty-seven percent of these workers reported that they did not receive a pay stub in the previous week.
Some employers are increasingly engaging in practices that make it extremely difficult for workers to calculate their pay, including paying workers in cash or by personal checks.
While the Fair Labor Standards Act of 1938 and the regulations of the Department of Labor require employers to keep records of employees’ pay, the lack of remedies diminishes the effectiveness of this requirement.
The Supreme Court held in Anderson v. Mt. Clemens Pottery Co. (328 U.S. 680 (1946)) that where an employer fails to keep records that are required under the Fair Labor Standards Act of 1938, when an employee presents sufficient evidence of the “amount and extent of that work”, for which the employee was “improperly compensated” the burden shifts to the employer to disprove the employee’s testimony and evidence of the hours the employee worked and how much he or she was paid.
Far too many courts have failed to shift the burden to the employer, where the employer has failed to keep records or has kept inadequate records, instead giving the employer’s testimony equal weight to credible evidence produced by the employee.
Sec. 3 Pay stub requirements
Disclosure requirements— Section 11 of the Fair Labor Standards Act of 1938 (29 U.S.C. 211) is amended by adding at the end the following:
“(e) Information To be disclosed to certain employees
“(1) Initial disclosure—Each employer shall provide an initial disclosure to each employee who is not subject to the exemptions set forth in section 13 within 15 days of the date such employee is hired or any of the information in subparagraphs (A) through (C) changes with respect to that employee. Such disclosure shall include—
“(A) the rate or rates of pay and whether the employee is paid by the hour, shift, day, week, or job, or by salary, piece rate, commission, or other form of compensation;
“(B) the name of the employer and any other name used by the employer to conduct business; and
“(C) the physical address and telephone number of the employer's main office or principal place of business, and a mailing address if such mailing address is different from the address of the main office or principal place of business.
“(2) Disclosures required in each pay stub—Each employer shall disclose to each employee who is not subject to the exemptions set forth in section 13 in a pay stub provided each pay period—
“(A) the pay period covered;
“(B) the name of the employee and the last four digits of the employee’s Social Security number;
“(C) the total hours worked by the employee, including the number of hours worked per workweek in the pay period;
“(D)
“(i) in the case of an employee who is paid an hourly wage, the total gross and net wages paid, and the rate of pay for each hour worked;
“(ii) in the case of an employee who is paid a salary in lieu of an hourly wage, the amount of salary paid during the pay period;
“(iii) in the case of an employee employed at piece rate, the number of piece-rate units earned, the applicable piece rate, and total amount paid in accordance with such piece rate; and
“(iv) in the case of an employee who receives commission or is paid on the basis of any other type of rate, the total amount paid in commission or in accordance with such rate and any additional information relating to such pay as determined by the Secretary;
“(E) the number of overtime hours worked during each workweek of the pay period and the hourly rate of pay for each such overtime hour, or, in the case of an employee employed at piece rate, the piece rate paid for each such overtime hour;
“(F) any additional compensation paid or benefits provided, including an explanation of each type of compensation or benefit; and
“(G) any deductions, with an explanation of each deduction, and any allowances or reimbursements, with an explanation of each allowance or reimbursement.
“(3) Requirements related to disclosure of compensation, benefits, allowances, and reimbursements—In disclosing the information required to be disclosed pursuant to subparagraphs (F) and (G) of paragraph (2)—
“(A) the compensation and benefits required to be disclosed include—
“(i) any bonus, paid leave (including paid vacation or personal time, paid sick leave, or any other paid leave), or other compensation;
“(ii) any employer contributions to health care coverage or to a retirement account for the employee and any transit or other benefits provided by the employer; and
“(iii) any additional form of pay that is required under State or local law, or for which records are required to be kept pursuant to State or local law, such as reporting time pay, split shift pay, paid sick leave, or paid family or medical leave.
“(B) the allowances and reimbursements required to be disclosed include any amounts paid to or reimbursed to an employee for meals, clothing, lodging, or any other item for which the employer makes an allowance or provides a reimbursement; and
“(C) the explanation for any additional compensation, benefits, allowances, or reimbursements shall be itemized and may not be described as “miscellaneous”.
“(4) Form of disclosure required—The pay stub required by paragraph (2) shall be provided to an employee each pay period and may be provided—
“(A) as a separate document, accompanying an employee’s pay;
“(B) as a detachable part of a paycheck for employees receiving a paycheck; or
“(C) electronically, at the election of the employee, if the employee receives his or her pay through electronic deposit.”
Recordkeeping requirements— Section 11 of such Act is further amended by adding at the end of subsection (c) the following: “An employer shall keep records of the information disclosed in an employee’s pay stub, as required by subsection (e), for a period of three years from the date of issuance of each pay stub.”.
Investigations and inspections— Section 11 of such Act is further amended by adding at the end of subsection (a) the following: “In the event that an employee requests an inspection of such employee’s records described in subsection (c), the employer shall provide copies of such records for a period of up to three years prior to such request. An employer shall comply with an employee’s requests to inspect records within 21 days of such request.”.
Notice and posting requirement— Section 11 of such Act is further amended by inserting after subsection (e) (as added by subsection (a)) the following:
“(f)
“(1) Every employer subject to any provision of this Act or of any order issued under this Act shall provide a notice to each employee within 15 days of the date of hire that includes—
“(A) a description of the employee’s right to receive a pay stub and the information which the pay stub must contain;
“(B) the address and telephone number for the applicable local office of the Department of Labor; and
“(C) such additional information as the Secretary shall require by regulation.
“(2) In the case of employees employed by an employer on the date of enactment of this Act, the employer shall provide the notice described in paragraph (1) within 15 days of the effective date of the Pay Stub Disclosure Act.”
Conforming amendment— The section heading of section 11 of such Act is amended by inserting “Pay stub Disclosures,” after “Records,”.
Sec. 4 Enforcement
In general— Section 16 of the Fair Labor Standards Act of 1938 is further amended—
in subsection (b)—
by inserting after the second sentence the following: “An employer who violates subsections (e) or (f) of section 11 shall be liable to the affected employee for $50 for the initial pay period in which such a violation occurs and $100 per employee for each violation in a subsequent pay period, not to exceed an aggregate of $4,000 per employee.”; and
by striking “either of the preceding sentences” and inserting “any of the preceding sentences”;
in subsection (e)—
by redesignating paragraphs (3) through (5) as paragraphs (4) through (6), respectively; and
by inserting after paragraph (2) the following:
“(3) An employer who fails to make, keep, and preserve records as required by section 11(c), or fails to permit a current or former employee to inspect or copy records as required by section 11(a), shall be subject to a civil penalty of $750 per violation.”
by adding at the end the following:
“(f) The Secretary shall have the authority, in accordance with inflation, to periodically increase the amounts provided for in this section as penalties or recoverable in an action described in subsection (b).”
Evidentiary standards— Section 15 of such Act (29 U.S.C. 215) is amended by adding at the end the following:
“(c) In the event that an employer fails to keep sufficient records as required by section 11(c) and any related regulations, the employee’s production of credible evidence and testimony regarding the amount and extent of the work for which the employee was improperly compensated shall be sufficient to create a rebuttable presumption that the employee’s records are accurate, consistent with the Supreme Court’s decision in Anderson v. Mt. Clemens Pottery Co. (328 U.S. 680 (1946)).”
Sec. 5 Definitions
Section 3 of the Fair Labor Standards Act of 1938 29 U.S.C. 203) is amended by adding at the end the following:
“(z) “Pay stub” means a paper that itemizes in writing all wages and deductions paid to an employee each pay period.”
Sec. 6 Regulations and technical assistance
Regulations— Not later than 1 year after the date of enactment of this Act, the Secretary of Labor shall prescribe such regulations as are necessary to carry out this Act, including a list of State and local laws—
with requirements that are substantially similar to the requirements of this Act; and
compliance with which the Secretary may determine satisfies the requirements of this Act.
Guidance and technical assistance— In order to achieve the objectives of this Act, the Secretary of Labor—
acting through the Administrator of the Wage and Hour Division of the Department of Labor, shall issue guidance on compliance with this Act regarding providing the disclosures required pursuant to this Act; and
shall provide technical assistance to employers, labor organizations, professional associations, and other interested persons on means of achieving and maintaining compliance with the provisions of this Act.
Sec. 7 Effective date
The amendments made by this Act shall take effect on the date that is 6 months after final regulations are issued by the Secretary of Labor and not later than 18 months after the date of enactment of this Act.