California Supreme Court Acknowledges Good Faith Defense for Employers

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In a surprise victory for employers, the California Supreme Court has recently ruled that an employer who reasonably and in good faith believes its wage statements (aka: paystubs) are true and accurate is immune to penalties imposed by California Labor Code section 226 (“Section 226”).

Among other things, Section 226 imposes statutory penalties on an employer for non-compliance with Section 226’s technical requirements. These penalties can cost thousands of dollars. In a surprise decision, the California Supreme Court held that if an employer genuinely and reasonably believes its wage statements comport with all applicable legal requirements, the employer should not face statutory penalties under Section 226. The Court clarified that good-faith mistakes of law are a valid defense — not just clerical errors.

In so holding, the Court drew comparisons with the language contained in another Labor Code section—namely section 203, a provision that governs the timing of final wages—with the language contained in Labor Code section 226, finding that both sections absolve employers from penalties when they act in good faith.

While this is a surprising victory given the California Supreme Court’s general anti-employer bent, the best defense against a potential legal claim is strict adherence to California’s legal requirements.

For more information on compliance with California’s wage statement requirements, please contact us at

This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.