Canales v. Wells Fargo Bank, N.A.

Filed 5/30/18
CERTIFIED FOR PARTIAL PUBLICATION**
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
FABIO CANALES et al., B276127
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No.
v. BC502826)
WELLS FARGO BANK, N.A.,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los
Angeles County, John Shepard Wiley, Jr., Judge. Affirmed.
Law Offices of Sherry Jung and Larry W. Lee; Hyun Legal,
Dennis S. Hyun for Plaintiffs and Appellants.
Kading Briggs, Glenn L. Briggs, Theresa A. Kading and
Nisha Verma, for Defendant and Respondent.
____________________________________________________________
** Pursuant to California rules of Court, rules 8.1100 and 8.1110,
this opinion is certified for publication with the exception of parts
III(B) and III(C).
I. INTRODUCTION
Plaintiffs Fabio Canales and Andy Cortes, on behalf of
themselves and class members, appeal from a summary
judgment. Plaintiffs were former or current non-exempt
employees of defendant Wells Fargo Bank, N.A. Plaintiffs
alleged that their wage statements failed to include information
required under Labor Code1 section 226, subdivision (a)(9).
Specifically, plaintiffs argued that a line on the wage statement,
“OverTimePay-Override,” should, but did not, include hourly
rates and hours worked. Plaintiffs also alleged defendant
violated section 226 by failing to provide a wage statement
concurrently with the terminated employees’ final wages paid in-
store. Plaintiffs moved for summary adjudication on the section
226 cause of action.
Defendant in its summary judgment motion argued that
OverTimePay-Override reflected additional overtime pay that
was owed for work performed on a previous pay period, but could
not be calculated because it was based on a nondiscretionary
bonus not yet earned. Under subdivision (a)(9), defendant
contended OverTimePay-Override did not have corresponding
hourly rates or hours worked for the current pay period. As to
plaintiffs’ second theory, defendant asserted it complied with the
statute by furnishing the wage statement by mail. The trial
court found in favor of defendant and against plaintiffs.
1 Further statutory references are to the Labor Code unless
otherwise indicated.
2
Plaintiffs contend the trial court erred by denying their
summary adjudication motion and by granting defendant’s
motion. We affirm.
II. BACKGROUND
A. Factual Background2
Plaintiffs are current or former non-exempt California
employees of defendant. Defendant would in some instances
issue a paycheck and wage statement that contained
nondiscretionary incentive compensation3 (the bonus) to
employees who worked during the period covered by the incentive
compensation. These bonus periods would be monthly, quarterly,
or annually. For employees who worked overtime during those
bonus periods, the wage statements contained a line item called
“OverTimePay-Override,” formerly called “OT-Flat.”
OverTimePay-Override listed incremental additional overtime
paid to the employee for overtime hours worked during the bonus
2 All facts are considered undisputed for purposes of
summary judgment.
3 Teresa Swanson, defendant’s person most knowledgeable,
stated that a nondiscretionary bonus was “given to a team
member, based on some sort of preset work definition, goal,
something that they have to meet. And then they earn that
bonus.” It appears this bonus was a production or piecework
bonus.
3
period under the “Earnings” column.4 For the OverTimePay-
Override line on the wage statements, no hourly rates or hours
worked was identified.
In certain situations, defendant issued final wages to
employees at the time of their termination through “in-store
payments” made by cashier’s check. Defendant’s payroll
department would then create the wage statement either the
same day or the next day and mail it to the terminated employee
by United States mail.5 During their employment, employees
had online access to their itemized wage statements. Employees
lost such online access the day after termination.
4 To calculate the amount to be entered on the OverTimePay-
Override line: (1) take the bonus earned during the bonus period,
whether it be by year, quarter, or month; (2) divide the bonus by
the total number of hours worked during the bonus period; (3)
multiply the resulting number by 0.5; (4) multiply the resulting
number by the total number of overtime hours worked during the
bonus period.
Our Supreme Court in a recent decision concerning flat
sum bonuses under California law decided that the proper
method for calculating the rate of overtime pay when an
employee receives both an hourly wage and a flat sum bonus is to
divide the bonus by the number of nonovertime hours actually
worked during the bonus period. (Alvarado v. Dart Container
Corp. of California (2018) 4 Cal.5th 542, 562 (Alvarado).) The
Supreme Court specifically excluded production or piecework
bonuses or a commission from its holding. (Id. at p. 561, fn. 6.)
5 Plaintiffs asserted in their opening brief, without citation to
the record, that they never received their wage statements. We
will disregard such assertions as meritless. (Susag v. City of
Lake Forest (2002) 94 Cal.App.4th 1401, 1416.)
4
B. First Amended Complaint
Plaintiffs filed their first amended complaint, the operative
pleading, on June 20, 2013. Plaintiffs sued on behalf of
themselves and a class composed of (1) current or former non-
exempt California employees of defendant who received
OverTimePay-Override from March 13, 2012 to present and
(2) all former California employees of defendant who were
terminated from March 13, 2012 to present and were paid their
final wages through the “in-store payment” procedure. In their
first cause of action, plaintiffs alleged defendant violated section
2266 by failing to identify the hourly rates and the hours worked
6 At the time of the alleged offenses, section 226, subdivision
(a)(9) provided in pertinent part: “(a) Every employer shall,
semimonthly or at the time of each payment of wages, furnish
each of his or her employees, either as a detachable part of the
check, draft, or voucher paying the employee’s wages, or
separately when wages are paid by personal check or cash, an
accurate itemized statement in writing showing . . . (9) all
applicable hourly rates in effect during the pay period and the
corresponding number of hours worked at each hourly rate by the
employee . . . .” (Stats. 2012, ch. 844, § 1.7.) Subdivision (a)(9)
was added by the Legislature in 2000. (Stats. 2000, ch. 876, § 6.)
Section 226, subdivision (a) was amended by the
Legislature in 2016 to read in pertinent part: “An employer,
semimonthly or at the time of each payment of wages, shall
furnish to his or her employee, either as a detachable part of the
check, draft, or voucher paying the employee’s wages, or
separately if wages are paid by personal check or cash, an
accurate itemized statement in writing . . . .” (Stats. 2016, ch. 77,
§ 1, eff. Jan 1, 2017.) Subdivision (a)(2) was also amended, and
subdivision (j) was added. (Ibid.) The 2016 amendment does not
substantively affect our opinion.
5
that corresponded to OverTimePay-Override. Plaintiffs also
alleged defendant violated section 226 by failing to provide
terminated employees with wage statements immediately upon
termination. Plaintiffs alleged a second cause of action pursuant
to the Private Attorneys General Act (§ 2698 et seq.) (PAGA) for
violation of section 226.7
C. Summary Adjudication/Judgment Motions
On December 15, 2015, plaintiffs moved for summary
adjudication.8 Much like the allegations in their amended
complaint, plaintiffs argued that defendant violated section 226,
subdivision (a)(9) by failing to specify the hourly rates and
number of hours worked for the OverTimePay-Override
adjustment on the itemized wage statements. Plaintiffs also
argued defendant violated section 226 by failing to provide to
terminated employees an itemized wage statement concurrently
with their final wages that were paid in-store by cashier’s check.
Defendant filed its own summary judgment motion on
December 15, 2015. Defendant asserted it did not violate section
226, subdivision (a)(9) because OverTimePay-Override
represented an increase in overtime pay, based on a periodic
7 A third plaintiff, Luciano Gonzales, was initially part of
this action. However, Gonzales was not named as a class
representative in plaintiffs’ motion for class certification and is
not an appellant. The class was certified on March 20, 2015.
8 Though plaintiffs categorized their motion as one for
summary judgment or in the alternative, summary adjudication,
plaintiffs sought only summary adjudication as to their first
cause of action for violation of section 226.
6
bonus, for overtime hours worked in previous pay periods.
Defendant argued there were no “applicable hourly rates in
effect during the pay period” that corresponded to
OverTimePay-Override and thus defendant did not have to
provide such information on the wage statement. As to plaintiffs’
second theory, defendant contended it furnished the itemized
statement as required under section 226 by mailing it to the
terminated employee’s last known address either the same day or
the next day. Finally, defendant argued plaintiffs’ PAGA cause of
action failed because it was wholly derivative of a violation based
on section 226 and because plaintiffs failed to exhaust
administrative remedies. Plaintiffs do not dispute their PAGA
cause of action is derivative of the section 226 claims.
On May 26, 2016, the trial court issued its order granting
defendant’s motion and denying that of plaintiffs. As to
defendant’s first argument, the trial court agreed that section
226, subdivision (a)(9) did not apply to OverTimePay-Override
because there was no applicable hourly rate for the pay period
reflected in the wage statement. For defendant’s second
argument, the trial court found that defendant complied with the
“furnish” requirement under section 226 by mailing the wage
statement.
III. DISCUSSION
A. Standard of Review
“[F]rom commencement to conclusion, the party moving for
summary judgment bears the burden of persuasion that there is
no triable issue of material fact and that he is entitled to
7
judgment as a matter of law. That is because of the general
principle that a party who seeks a court’s action in his favor
bears the burden of persuasion thereon. [Citation.] There is a
triable issue of material fact if, and only if, the evidence would
allow a reasonable trier of fact to find the underlying fact in favor
of the party opposing the motion in accordance with the
applicable standard of proof. . . . [¶] [T]he party moving for
summary judgment bears an initial burden of production to make
a prima facie showing of the nonexistence of any triable issue of
material fact; if he carries his burden of production, he causes a
shift, and the opposing party is then subjected to a burden of
production of his own to make a prima facie showing of the
existence of a triable issue of material fact. . . . A prima facie
showing is one that is sufficient to support the position of the
party in question. [Fns. omitted.]” (Aguilar v. Atlantic Richfield
Co. (2001) 25 Cal.4th 826, 850-851.)
We review an order granting summary judgment de novo.
(Coral Construction, Inc. v. City and County of San Francisco
(2010) 50 Cal.4th 315, 336.) The trial court’s stated reasons for
granting summary judgment are not binding because we review
its ruling not its rationale. (Ibid.) In addition, a summary
judgment motion is directed to the issues framed by the
pleadings. (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th
1238, 1252.) These are the only issues a motion for summary
judgment must address. (Conroy v. Regents of University of
California (2009) 45 Cal.4th 1244, 1250.)
This appeal solely involves statutory interpretation. “The
proper interpretation of a statute, and its application to
undisputed facts, presents a question of law that is . . . subject to
de novo review.” (Morgan v. United Retail Inc. (2010) 186
8
Cal.App.4th 1136, 1142 (Morgan).) “‘As in any case involving
statutory interpretation, our fundamental task here is to
determine the Legislature’s intent so as to effectuate the law’s
purpose.’ [Citation.] The well-established rules for performing
this task require us to begin by examining the statutory
language, giving it a plain and commonsense meaning.
[Citation.] We do not, however, consider the statutory language
in isolation; rather, we look to the statute’s entire substance in
order to determine its scope and purposes. [Citation.] That is,
we construe the words in question in context, keeping in mind the
statute’s nature and obvious purposes. [Citation.] We must
harmonize the statute’s various parts by considering it in the
context of the statutory framework as a whole. [Citation.] If the
statutory language is unambiguous, then its plain meaning
controls. If, however, the language supports more than one
reasonable construction, then we may look to extrinsic aids,
including the ostensible objects to be achieved and the legislative
history.” (Los Angeles County Metropolitan Transportation
Authority v. Alameda Produce Market, LLC (2011) 52 Cal.4th
1100, 1106-1107; Morgan, supra, 186 Cal.App.4th at pp. 1142-
1143.)
B. Nondiscretionary Bonuses and Overtime Pay
We first discuss the nature of nondiscretionary bonuses and
how they relate to overtime pay under the Labor Code. Pursuant
to section 510, subdivision (a), an employer must pay one and a
half times an employee’s “regular rate of pay” if he or she works
more than 40 hours per week or more than 8 hours per day.
Nondiscretionary bonuses are considered part of the “regular rate
9
of pay.” (Marin v. Costco Wholesale Corp. (2008) 169 Cal.App.4th
804, 807 (Marin); see 29 C.F.R. § 778.209 (2012) [federal method
of explaining regular rate of pay calculation for bonuses].)
In order to calculate overtime pay for an employee paid at
an hourly rate, an employer must allocate the bonus over the
period in which it was earned. (Marin, supra, 169 Cal.App.4th at
p. 807; Chin et al., Cal. Practice Guide: Employment Litigation
(The Rutter Group 2017) ¶ 11:906 [“A bonus or prize paid in cash
is allocated over the period during which it was earned to
determine the increase in the average hourly rate for each week
of the period”].) To explain this using an example, take a
hypothetical employee wage statement for the period of
January 7 to January 20, 2018.9 This hypothetical wage
statement would include an hourly regular rate, the number of
regular hours worked during the pay period of January 7 to
January 20, the hourly overtime rate, and the number of
overtime hours worked during the pay period of January 7 to
January 20. The hypothetical employee earned a $360 monthly
bonus for work performed during the previous month of
December, from December 1 to December 31, 2017. This bonus
would be reflected on the January 7 to January 20, 2018 wage
statement.10 To calculate the OverTimePay-Override line, the
9 We have provided these dates, but defendant used the
hours and bonus figures in their respondent’s brief as an
illustration to calculate OverTimePay-Override. Plaintiffs have
not disputed the accuracy of defendant’s method.
10 Section 204, subdivision (b)(1) provides, “all wages earned
for labor in excess of the normal work period shall be paid no
later than the payday for the next regular payroll period.”
10
hours worked in December 2017 would be used because that is
the time period in which the bonus was earned. In this
hypothetical, the employee had worked 160 regular hours and 20
overtime hours in December 2017, for a total of 180 hours. First,
divide $360 by 180, which results in $2. This number represents
the increase to the regular hourly rate. Multiply $2 by 0.5 and
the result, $1, represents the increase to the overtime hourly
rate. Then, take $1 and multiply it by 20, the overtime hours
worked during December 2017, and the result, $20, is the
overtime pay adjustment, which would be identified as the
OverTimePay-Override line on the wage statement. This
allocation, at least for production or piecework bonuses, is
calculated by using the method described above in footnote 4.
C. Section 226, Subdivision (a)(9) Does Not Require Hourly
Rate and Hours Worked to be Identified For OverTimePay-
Override
The Court of Appeal in Morgan discussed the purpose of
section 226, subdivision (a)(9): “The 2000 amendment [which
added subdivision (a)(9)] . . . expanded the scope of information to
be included by employers in the itemized wage statements
furnished to employees. Following the amendment, an employer
Plaintiffs contend that pursuant to Peabody v. Time Warner
Cable, Inc. (2014) 59 Cal.4th 662, 669, defendant was prevented
from paying OverTimePay-Override for wages earned in prior
pay periods. Peabody v. Time Warner Cable, Inc., is inapposite.
In that case, our Supreme Court held an employer could not
attribute wages paid in one period to a prior pay period in order
to meet an exemption for minimum wages. (Ibid.) It has no
application to the OverTimePay-Override line at issue here.
11
that previously listed the total hours worked by an employee in a
single category [as required under subdivision (a)(2)] was now
required to list both the total regular hours worked and the total
overtime hours worked, along with the corresponding hourly
rates. It appears that by adding this more specific requirement,
the statute made it easier for employees to determine whether
they were being paid for all hours worked at the appropriate
rates of pay.” (Morgan, supra, 186 Cal.App.4th at p. 1148.)
Subdivision (a)(6) requires that the wage statement show
“the inclusive dates of the period for which the employee is paid.”
Applying the standards of statutory construction, in the context
of section 226 as a whole, the “pay period” discussed in
subdivision (a)(9), which requires that the wage statement
include “all applicable hourly rates in effect during the pay
period,” refers to the period described in subdivision (a)(6). In our
hypothetical wage statement above, we interpret the pay period
to refer to the two-week period covered by the wage statement,
January 7 to January 20, 2018.
Defendant argues it was not required to provide on the
wage statement hourly rates or hours worked related to
OverTimePay-Override. Defendant has met its initial burden of
production. (Code Civ. Proc., § 437c, subd. (p)(2).) Based on the
above statutory construction and the method by which
OverTimePay-Override was calculated, there were no “applicable
hourly rates in effect during the pay period” that
corresponded to OverTimePay-Override. Accordingly, there was
also no “corresponding number of hours worked at each hourly
rate by the employee” for the pay period that applied to
OverTimePay-Override. As discussed above, OverTimePay-
Override represented additional wages that were earned as
12
overtime pay based on nondiscretionary bonuses being spread
over the hours worked during the bonus period. Moreover, based
on how OverTimePay-Override was calculated, the overtime
hours were worked in previous pay periods for which employees
had already received their standard overtime pay. The itemized
wage statement issued by an employer need only provide the
applicable hourly rates and the corresponding number of hours
worked “in effect during the pay period.” In other words, the
employer need only identify on the wage statement the hourly
rate in effect during the pay period for which the employee was
currently being paid, and the corresponding hours worked.
Plaintiffs argue to the contrary, but have failed to meet
their burden. (Code Civ. Proc., § 437c, subd. (p)(2).) “[S]ection
226, subdivision (a) is highly detailed, containing nine separate
categories that must be included on wage statements . . . . When
a statute omits a particular category from a more generalized list,
a court can reasonably infer a legislative intent not to include
that category within the statute’s mandate.” (Soto v. Motel 6
Operating, L.P. (2016) 4 Cal.App.5th 385, 391.) The purpose of
spreading the bonus over the hours worked during the bonus
period is to calculate the “regular rate of pay” for overtime under
section 510. Defendant’s wage statements included the regular
rate of pay, the overtime rate of pay, and the hours worked at
each rate. Each of these was “in effect during the pay period,”
January 7 to January 20 in our example. The OverTimePay-
Override was an adjustment to the overtime payment due to an
employee, based on bonuses earned by the employee for work
performed during prior pay periods. Accordingly, there were no
applicable hourly rates in effect during the pay period which
defendant was required to include in the wage statement.
13
Plaintiffs contend a federal district court case, Ontiveros v.
Safelite Fulfillment, Inc. (C.D.Cal. 2017) 231 F.Supp.3d 531(Ontiveros) is directly on-point and supports their position. In
Ontiveros, the district court found that the employer’s wage
statements were deficient for failing to report overtime wages
associated with an installation bonus. (Id. at pp. 540-541.) The
district court reasoned: “It is undisputed that Plaintiff earned
additional overtime wages if he worked overtime during the same
period that an installation bonus was earned, as this bonus would
lead to an increase in his regular rate under 29 C.F.R. § 778.109.
. . . It is also undisputed that when Plaintiff earned installation
bonuses, his wage statements reflected both the underlying
bonus earned and the additional overtime wages owed as a single
line item. . . . Finally, it is undisputed that the wage statement
does not have information from which Plaintiff could calculate
the additional overtime owed as a result of participation in the
installation bonus program. . . . The Court concludes that the
‘regular rate’ is an ‘applicable hourly rate.’ As such, the law
requires that the regular rate appear on the face of the wage
statement or else be ascertainable from the information included
therein. Because it was not possible to promptly and easily
determine the regular rate from the wage statements when an
employee was enrolled in the installation bonus program, the
statements were deficient. [Fn. omitted.]” (Ibid.)
Ontiveros is distinguishable. Ontiveros involved a piece-
rate compensation, paid weekly. (231 F.Supp.3d at p. 535.)
Additionally, the bonus earned and additional overtime wages
were reflected on the wage statement on one line, rather than
being separated. (Id. at p. 540.) Finally, the bonus was based on
14
work performed during the pay period reflected in the wage
statement. (See id. at p. 534.)
Plaintiffs also cite a May 17, 2002 opinion letter from the
Division of Labor Standards Enforcement (DLSE). That letter
concerned a unique situation in which an employer continually
listed 86.67 hours as the hours worked by its employees during
each pay period, regardless of whether it was true. The DLSE
was concerned with an employer’s failure to list all hours worked
during the pay period, including overtime. To the extent the
DLSE determined an employer must comply with section 226
when making additional overtime payments for work performed
in prior pay periods, we conclude the DLSE opinion letter is not
applicable. Accordingly, we find defendant should prevail as a
matter of law on this theory.
D. No Violation for not Providing an Itemized Statement at Time
of Termination
Defendant argues it is in compliance with section 226,
subdivision (a) because it “furnished” the wage statement to the
discharged employee by United States mail. As noted, section
226, subdivision (a) provided, “[e]very employer shall,
semimonthly or at the time of each payment of wages, furnish
each of his or her employees, either as a detachable part of the
check, draft, or voucher paying the employee’s wages, or
separately when wages are paid by personal check or cash, an
accurate itemized statement in writing . . . .” It is undisputed
defendant provided some discharged employees with their last
wages in-store by cashier’s check, in compliance with the Labor
Code. (See §§ 201, subd. (a) [“[i]f an employer discharges an
15
employee, the wages earned and unpaid at the time of discharge
are due and payable immediately”], 208 [“[e]very employee who is
discharged shall be paid at the place of discharge”].) “Furnish”
means to “provide with what is needed,” or to “supply” or “give.”
(Merriam-Webster’s Collegiate Dict. (10th ed. 1993) p. 474, col.
1.) Section 226 provides that an employer must furnish the wage
statement as either “a detachable part of the check, draft, or
voucher paying the employee’s wages,” or separately when the
wages are paid by personal check or cash. Other than that one
provision, section 226 describes no other specific means by which
an employer is to furnish the itemized statement to an employee.
Thus, mailing the wage statement is a viable means to “furnish.”
Defendant could also furnish the wage statement separately
because paying discharged employees by cashier’s check was the
equivalent of paying them by cash.11 However, the Legislature
also provided for when an employer was to furnish the wage
statement to the employee: “semimonthly or at the time of each
payment of wages.”
11 As argued by defendant, a cashier’s check was the
equivalent of paying by cash. (See Gray1 CPB, LLC v. SCC
Acquisitions, Inc. (2015) 233 Cal.App.4th 882, 893-894, 896
[citing U. Com. Code, § 3310, cashier’s check taken for obligation
has same effect as cash].) Plaintiffs argue for the first time in
their reply brief that a cashier’s check is not the equivalent of a
personal check or cash for purposes of section 226. This issue
was not raised in the opening brief nor before the trial court and
is therefore waived and forfeited. (Tellez v. Rich Voss Trucking,
Inc. (2015) 240 Cal.App.4th 1052, 1066; SCI California Funeral
Services, Inc. v. Five Bridges Foundation (2012) 203 Cal.App.4th
549, 573, fn. 18; Greenwich S.F., LLC v. Wong (2010) 190
Cal.App.4th 739, 767.)
16
We first find that for purposes of the Labor Code, “at the
time of each payment of wages” for discharged employees means
“immediately.” As noted, a discharged employee’s unpaid earned
wages are due and payable “immediately.” (§ 201, subd. (a).)
When construing section 226 in relation to the Labor Code, the
most logical construction of “at the time of each payment of
wages” in section 226 for discharged employees is whenever the
discharged employee receives his or her unpaid earned wages,
which is “immediately.” Because defendant in some instances did
not provide wage statements immediately to discharged
employees, but rather mailed the statement to the employee’s
last known address the same day or the next day, defendant did
not furnish the wage statement to these discharged employees “at
the time of each payment of wages.”
However, by the plain meaning of the statute, defendant
also had the option of furnishing the wage statement
semimonthly. (§ 226, subd. (a).) Additionally, nothing in section
226 suggests that an employer cannot furnish the wage
statement prior to the semimonthly date. For example, suppose
an employer furnishes wage statements on the first and the
fifteenth of each month. The employer discharges an employee
on the second of the month. Per the statute’s plain language, if
an employer pays the final wages by personal check or cash, it
has the option of furnishing the discharged employee with the
wage statement on the fifteenth. We find it illogical to conclude
an employer violates section 226 by furnishing a wage statement
before the semimonthly date has been reached. If the employer
furnishes the wage statement to the discharged employee on the
fifth of the month, the employer has complied with the
requirement that it furnish the wage statement to the employee
17
“semimonthly” because the employee would have ostensibly been
furnished with the wage statement by the semimonthly date.
For purposes of section 226, if an employer furnishes an
employee’s wage statement before or by the semimonthly
deadline, the employer is in compliance. Thus, we interpret
“semimonthly or at the time of each payment of wages” as
representing the outermost deadlines by which an employer is
required to furnish the wage statement. Since defendant mailed
the wage statement to certain discharged employees paid in-store
by the same day as or the next day after termination, defendant
was in compliance with section 226 because the employee was
“furnished” with the wage statement semimonthly. Defendant
has met its initial burden of production. (Code Civ. Proc., § 437c,
subd. (p)(2).)
Plaintiffs contend the wage statement must be furnished
immediately for a discharged employee. Plaintiffs cite the DLSE
Policies and Interpretations Manual (DLSE Manual), section
14.1.1, which provides, “[a] California employer must furnish a
statement showing the following information to each employee at
the time of payment of wages (or at least semimonthly, whichever
occurs first),” and section 14.1.2, which provides, “[s]ection
226 . . . sets out the employer’s responsibilities in connection with
the wage statement which must accompany the check or cash
payment to the employee.”
Plaintiffs have not met their burden. (Code Civ. Proc.,
§ 437c, subd. (p)(2).) There is no evidence in the record that the
DLSE adopted this interpretation in accordance with the
Administrative Procedure Act (Gov. Code, § 11340 et seq.). Thus,
it is the equivalent of a void underground regulation. (Tidewater
Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 576-
18
577.) As our Supreme Court held, “when an agency like the
DLSE sets forth an interpretive policy in a void underground
regulation, the deference that the agency’s interpretation would
normally enjoy is absent, but in its place the agency has its power
to persuade.” (Alvarado, supra, 4 Cal.5th 542, 559.)
The DLSE’s interpretation is not persuasive. The term
“whichever occurs first” is not in section 226. The plain meaning
of the statute indicates the Legislature specifically intended a
choice for employers as to when to furnish the wage statement.
There is also no requirement in section 226 that the wage
statement “must accompany” the personal check or cash payment
to the employee. As noted, the wage statement must be a
detachable part of the check, draft, or voucher, unless payment is
by personal check or cash; in such instance the wage statement
may be furnished separately. (§ 226, subd. (a).) Accordingly, we
decline to follow the DLSE’s interpretation.
Plaintiffs cite several cases that purportedly determined
that section 226, subdivision (a) requires employers to furnish a
wage statement to each employee “at the time wages are paid.”
(See Zavala v. Scott Brothers Dairy, Inc. (2006) 143 Cal.App.4th
585, 591 (Zavala); Reinhardt v. Gemini Motor Transport
(E.D.Cal. 2012) 879 F.Supp.2d 1138, 1141 (Reinhardt); In re
Bimbo Bakeries USA FLSA Actions (N.D.Cal. Oct. 24, 2008, No.
C 05-00829 JW) 2008 WL 10850153, at *7, 2008 U.S. Dist. Lexis
125068, at *23 (Bimbo Bakeries).) Such statements were dicta as
the cases concerned issues unrelated to the one here. (Zavala,
supra, 143 Cal.App.4th at pp. 592-593 [whether collective
bargaining agreement required arbitration of Labor Code claims];
Reinhardt, supra, 879 F.Supp.2d at pp. 1141-1142 [whether
plaintiffs sufficiently alleged Labor Code violations were
19
“‘knowing and intentional’” for recovery under § 226, subd. (e)];
Bimbo Bakeries, supra, 2008 WL 10850153, at *7, 2008 U.S. Dist.
Lexis 125068, at *24 [whether defendant’s violation was
“knowing and intentional” for summary judgment purposes].)
They are thus unpersuasive.
Defendant should prevail on this theory. Because there are
no triable issues of material fact and defendant is entitled to
judgment as a matter of law, summary judgment was properly
granted in its favor.
IV. DISPOSITION
The judgment is affirmed. Defendant Wells Fargo Bank,
N.A. is entitled to recover its costs on appeal from plaintiffs Fabio
Canales and Andy Cortes.
CERTIFIED FOR PARTIAL PUBLICATION
KIM, J.
We concur:
KRIEGLER, Acting P.J. BAKER, J.
 Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.
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