No Secret Identities

Published

Unlike super heroes, California employers have no right to a secret identity. Labor Code section 226, subdivision (a) requires employers to furnish wage statements which, among other things, identify the legal entity that is the employer. The purpose is to give the employees clear notice who they are working for. Failing to identify the legal entity that is the employer on employee pay stubs is not only against the law and it can also lead to big penalties.

In Noori v. Countrywide Payroll & HR Solutions, Inc., (December 26, 2019), the wage statements identified the employer with the acronym “CSSG.” CSSG stood for “Countrywide Staffing Solutions Group,” which was not a name listed with the California Secretary of state, but was a fictitious business name for defendant Countrywide Payroll & HR Solutions, Inc.

The California Court of Appeal held that use of an acronym for an unregistered fictitious business name violated the disclosure requirements of Labor Code section 226(a):

Here, we have an acronym of an out-of-state fictious business name. While we see no reason why the use of an out-of-state fictitious business name will violate the statute, the use of an unregistered acronym of the fictitious name is another matter. To be sure, the use of an acronymic name that is the registered fictious business name is proper. (See Savea v. YRC Inc., supra, 34 Cal.App.5th 173.) But “CSSG” is not Countrywide’s registered name, nor is it a minor truncation. CSSG is a construct, corresponding to “Countrywide Staffing Solutions Group,” and which may or may not have meaning to Countrywide employees. As the court in Elliot cautioned, “an employer using a shortened name or abbreviation that renders the name confusing or unintelligible may be violating section 226 [subdivision] (a)(8).” (Elliot, supra, 572 F.Supp.2d at p. 1180.)

The lesson for employers is simple: make sure your wage statements correctly identify the legal entity that is the employer.

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