Steven Mora v. Webcor Construction, L.P.

California Labor Code section 226, subdivision (a) (Section 226(a)), requires

employers to provide employees wage statements itemizing, among other things, all

wages earned, including the hours worked and applicable rates of pay. Plaintiff and

appellant Steven Mora (appellant) contends defendant and respondent Webcor

Construction, L.P. (respondent) violated Section 226(a) by failing to list the hours and

hourly rate associated with a payment described as “Union Vacation” on his wage

statements. It is undisputed the amounts were payments to a union vacation trust fund

authorized by the Labor Management Relations Act of 1947 (LMRA), also known as the

Taft–Hartley Act (29 U.S.C. § 141 et seq.). The trial court sustained respondent’s

demurrer without leave to amend and we affirm, concluding the payments are not within

the scope of Section 226(a).

BACKGROUND

In July 2015, appellant filed this putative class action in Alameda County Superior

Court and, in February 2016, appellant filed a First Amended Complaint (FAC). The



1 All undesignated section references are to the Labor Code.

2

FAC alleges violations of Section 226(a) and seeks penalties under the Private Attorneys

General Act of 2004 (PAGA) (§ 2698 et seq.). The FAC seeks to allege the claims on

behalf of all persons employed by respondent after July 2014.

The FAC alleges appellant was employed by respondent from March 7 through

May 14, 2015. Appellant’s employment was subject to a collective bargaining agreement

(CBA)—the 2014–2019 Laborers’ Master Builders Agreement—entered into between

respondent and the Northern California District Council of Laborers of the Laborers’

International Union of North America;

2

the CBA is attached to the FAC as Exhibit A.

Among many other things, the CBA sets forth “wages” applicable to different

employment classifications. The CBA also separately requires employers to “pay hourly

contributions for each hour paid for and/or worked” to various union trust funds at

specified rates, including to the Laborers Vacation Holiday Dues Supplement Trust Fund

for Northern California (Union Vacation Trust Fund) at $2.63 an hour effective June

2014.3

The FAC alleges that, “[p]ursuant to the terms of the CBA, [appellant] was paid a

specific hourly rate of vacation pay for each hour worked,” but “the applicable rate of pay

and hours for such vacation wages were not identified on the wage statements” he

received from respondent. The FAC alleges this was in violation of Section 226(a).



2 While the CBA was signed by the Construction Employers’ Association of California,

there is no dispute among the parties that respondent is associated with that association

and that appellant’s employment with respondent was controlled by the terms of the

CBA.

3 The CBA also requires hourly payments at specified rates to eight other union funds,

described on a chart as “Health & Welfare,” “Retiree Health & Welfare,” “Pension,”

“Annuity,” “Training-Retraining/Apprenticeship,” “Contract Administration/Market

Preservation,” “Building Industry Stabilization Fund,” and “CEA/Laborers Contract

Interpretation and Application Fund.” It is unclear whether each represents a separate

trust fund, or whether in some instances payments in different categories go to a single

trust fund. For example, the CBA references the “Laborer’s Pension/Annuity Trust Fund

for Northern California,” which presumably receives both the “Pension” and “Annuity”

payments.

3

In March 2016, respondent filed a demurrer, arguing the payments at issue were

outside the scope of Section 226(a) and, in any event, appellant’s claims were preempted

by the LMRA. In opposing the demurrer, appellant requested that the trial court take

judicial notice of weekly wage statements he received from respondent. The wage

statements clarify the nature of appellant’s claims.

4 Each wage statement5

contains a

heading on the left side entitled “Current Pay Period,” under which are listed three

categories: “Regular,” “Overtime,” and “Union Vacation.” On each statement, the

“Regular” and “Overtime” lines list hours worked as well as the pay rate for each hour

worked, as well as a total amount in a column entitled “Current Amount.” On the other

hand, the number of applicable hours worked and the applicable hourly rate are not

included for the “Union Vacation” line. Instead, there is only a total dollar amount in the

“Current Amount” column.

On the right side of each wage statement appears a section entitled “Deductions,”

which includes three columns: “Deductions Description,” “Current,” and “YTD

Amount.” On each wage statement the only listed deduction is described as “Union

Vacation,” and the amount listed in the “Current” column is always the same as the

amount listed for “Union Vacation” in the “Current Pay Period” section. Thus, whatever

amounts appellant received in the “Union Vacation” category each month were then

deducted from the ultimate payment. Appellant alleges, and respondent does not dispute,

that the wage statements list the deductions after taxes, meaning that appellant was taxed

on the “Union Vacation” payments that were ultimately deducted.



4 The FAC does not contain detailed allegations about the wage statements. Respondent

argued below and argues on appeal that the wage statements are not a proper subject for

judicial notice. The trial court did not rule on the request for judicial notice in its

decision. In any event, and regardless of whether it would be proper to take judicial

notice of the wage statements, we consider them on appeal because appellant could

amend his complaint to allege the contents of the wage statements, if it would permit him

to state a claim.

5 The final two wage statements are hand-filled forms that look different from the other

statements. Appellant focuses on the other eight statements and we do the same.

4

Appellant’s claims in the present lawsuit are based on the failure to state the

number of hours and hourly rate for the “Union Vacation” payment category on the wage

statements. He contends those payments were part of his wages and, therefore,

itemization of the hours and applicable rate was required under Section 226(a). Although

the FAC does not expressly so allege, the parties agree and the CBA attached to the FAC

makes clear that the “Union Vacation” amounts on the wage statements are payments to a

Taft-Hartley trust—specifically, the Union Vacation Trust Fund.

In April 2016, following a hearing, the trial court sustained respondent’s demurrer

without leave to amend. The court concluded the payments to the Union Vacation Trust

Fund were not “wages” within the meaning of Section 226(a), in part because appellant

“never had possession or control of these payments, or the right to control them.” The

court also concluded appellant’s claims were preempted by the LMRA because the CBA

would need to be interpreted in order to determine “whether and when [appellant]

becomes entitled to the hourly payments listed, whether any conditions attach, and when

and how such conditions are satisfied.”

This appeal followed.

DISCUSSION

“On appeal from a judgment dismissing an action after sustaining a demurrer

without leave to amend, the ‘reviewing court gives the complaint a reasonable

interpretation, and treats the demurrer as admitting all material facts properly pleaded.’

[Citation.] It ‘is error for a trial court to sustain a demurrer [if] the plaintiff has stated a

cause of action under any possible legal theory.’ [Citation.] We apply a de novo

standard in reviewing the court’s ruling sustaining the demurrer.” (Soto v. Motel 6

Operating, L.P. (2016) 4 Cal.App.5th 385, 389.)

I. Legal Background

A. The LMRA/Taft–Hartley Act

As explained previously, the alleged “wages” respondent failed to itemize on

appellant’s wage statements were payments to a Taft-Hartley vacation trust fund. The

LMRA “prohibits employers from making any payments to representatives of its

5

employees, [but] permits employers and unions to create employer-financed trusts to fund

employee benefits for union employees. (29 U.S.C. § 186(c)(5).) These ‘Taft–Hartley

trusts’ are funded by employer contributions, but are operated for the ‘sole and exclusive

benefit’ of the employees. The basis for the payment of benefits must be outlined in a

detailed written agreement between the union and the employer (29 U.S.C. §

186(c)(5)(B)), the fund must be subject to an annual audit, kept separate from other union

welfare funds, and the trustees of the funds are charged with equally representing the

interests of the employer and its employees. (29 U.S.C. § 186(c)(5)(B).)” (Great-West

Life Assurance Co. v. State Bd. of Equalization (1993) 19 Cal.App.4th 1553, 1558, fn. 2

(Great-West); see also N.L.R.B. v. Amax Coal (1981) 453 U.S. 322, 328-329 (Amax

Coal); Cox v. Superior Court. (1959) 52 Cal.2d 855, 858, fn. 1.) The fund assets are “

‘held in trust,’ and . . . administered ‘for the sole and exclusive benefit of the employees

. . . and their families and dependents. . . .’ ” (Amax Coal, at p. 329.)

The LMRA gives federal courts exclusive jurisdiction to hear “[s]uits for violation

of contracts between an employer and a labor organization.” (29 U.S.C. § 185(a); see

also Burnside v. Kiewit Pacific Corp. (9th Cir. 2007) 491 F.3d 1053, 1058–1059

(Burnside).) “Congress charged federal courts with a ‘mandate . . . to fashion a body of

federal common law to be used to address disputes arising out of labor contracts.’

[Citations.] As a result of this broad federal mandate . . . , the ‘preemptive force of [29

U.S.C. § 185(a)] is so powerful as to displace entirely any state cause of action for

violation of contracts between an employer and a labor organization.’ ” (Burnside, at p.

1059.) Additionally, the LMRA requires preemption of a state law claim “if the

resolution of [that] claim depends upon the meaning of a collective-bargaining

agreement.” (Detabali v. St. Luke’s Hosp. (9th Cir. 2007) 482 F.3d 1199, 1203.)

However, a “ ‘reference to or consideration of the terms of a collective bargaining

agreement is not the equivalent of interpreting the meaning of the terms.’ ” (Ibid.; see

also Burnside, at pp. 1059–1060.)

6

B. Section 226(a)

Section 226(a) requires employers to “semimonthly or at the time of each payment

of wages, furnish each of his or her employees . . . an accurate itemized [wage]

statement.” The wage statement must include: (1) “gross wages earned,” (2) “total hours

worked” except by salaried and exempt employees, (3) “piece-rate units earned,” (4) “all

deductions,” (5) “net wages earned,” (6) “the inclusive dates of the period for which the

employee is paid,” (7) “the name of the employee” and “the last four digits of [the

employee’s] social security number or an employee identification number,” (8) “the name

and address of the legal entity that is the employer,” and (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.” (Ibid.)

“The Legislature enacted section 226 to ensure an employer ‘document[s] the

basis of the employee compensation payments’ to assist the employee in determining

whether he or she has been compensated properly. [Citation.] Section 226 ‘play[s] an

important role in vindicating [the] fundamental public policy’ favoring ‘ “ ‘full and

prompt payment of an employee’s earned wages.’ ” ’ ” (Soto, supra, 4 Cal.App.5th at p.

390 (italics omitted).)

Taft-Hartley trusts, such as the Union Vacation Trust Fund at issue in the present

case, are expressly addressed in section 227.5, entitled “Annual statement of payments to

employee benefit funds.” That section provides, “Whenever an employer has agreed with

any employee to make payments to a health or welfare fund, pension fund or vacation

plan, or such other plan for the benefit of the employee, or has entered into a collective

bargaining agreement providing for such payments, the employer upon written request of

the employee shall furnish such employee annually a statement indicating whether or not

such payments have been made and for what periods.”

II. Section 226(a) Does Not Encompass Payments to the Union Vacation Trust Fund

Appellant contends Section 226(a) required respondent to specify on his wage

statements the hours and rate of pay for the payments to the Union Vacation Trust Fund.

He argues the payments were part of his “wages earned” because his wage statements list

7

dollar amounts for “Union Vacation” as a category of earnings, the amounts are included

in “total earnings,” and he was taxed on the payments.

6

On the other hand, the same

amounts are also listed as a “Union Vacation” deduction and, therefore, were not

payments appellant ultimately received. We conclude the payments are not within the

scope of Section 226(a).

“ ‘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.)

As the Fourth District observed in Soto, supra, 4 Cal.App.5th at page 391,

“[Section 226(a)] is highly detailed, containing nine separate categories that must be

included on wage statements.” The issue in Soto was whether Section 226(a) required



6 Appellant also refers in passing to section 226, subdivision (a)(9), which requires

itemization of “all applicable hourly rates in effect during the pay period and the

corresponding number of hours worked at each hourly rate by the employee.” However,

appellant does not argue that provision requires itemization of hourly rates that are not

“wages.” As respondent points out, an interpretation of section 226, subdivision (a)(9)

that encompasses the Union Vacation Trust Fund payments regardless of whether they

are “wages” would apparently also require the listing of the hourly rates and hours for the

CBA-mandated hourly payments to each of the other eight union trust funds.

8

the employer defendant to list the monetary value of accrued vacation time on wage

statements. (Soto, at pp. 388, 390.) The court noted that Section 226(a) did not include

“accrued paid vacation” as one of the categories of required information. (Soto, at p.

391.) This weighed against the plaintiff’s argument, because “When a statute omits a

particular category from a more generalized list, a court can reasonably infer a specific

legislative intent not to include that category within the statute’s mandate.” (Ibid., citing

Blankenship v. Allstate Ins. Co. (2010) 186 Cal.App.4th 87, 94 [“By long-standing rule of

statutory construction, the Legislature’s omission of a term in a list of terms indicates the

Legislature did not intend to include the omitted term, and we cannot add the term to the

statute by judicial fiat.”]; see also Kunde v. Seiler (2011) 197 Cal.App.4th 518, 531

[“ ‘ “[I]f a statute enumerates the persons or things to be affected by its provisions, there

is an implied exclusion of others . . . . It is an elementary rule of construction that the

expression of one excludes the other. And it is equally well settled that the court is

without power to supply an omission.” ’ ”].) Similarly, the absence of a specific

reference to payments to an employee benefit trust fund in Section 226(a) weighs against

appellant’s claim.

Appellant argues the lack of a specific reference to payments to an employee

benefit trust fund is not important because the payments at issue fell within the general

category of “wages.” Section 200 defines “wages” to “include[] all amounts for labor

performed by employees of every description, whether the amount is fixed or ascertained

by the standard of time, task, piece, commission basis, or other method of calculation.”

That definition is not helpful in determining whether the payments at issue were wages

because, although the definition makes clear the term encompasses payments by any

method of calculation, it does not make clear whether amounts ultimately directed to a

Taft-Hartley trust fund rather than to an employee are wages.

Certain California Supreme Court cases have broadly construed the term “wages.”

In Suastez v. Plastic Dress–Up Co. (1982) 31 Cal.3d 774, at pages 779–780, the

California Supreme Court explained that “vacation pay is not a gratuity or a gift, but is, in

effect, additional wages for services performed” and a “form of deferred compensation.”

9

(See also Prachasaisoradej v. Ralphs Grocery Co., Inc. (2007) 42 Cal.4th 217, 228,

italics omitted [“ ‘wages’ or ‘earnings’ are the amount the employer has offered or

promised to pay, or has paid pursuant to such an offer or promise, as compensation for

that employee’s labor”]; Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th

1094, 1103 [noting “wages” are defined to “include those benefits to which an employee

is entitled . . . including money, room, board, clothing, vacation pay, and sick pay”].)

Those cases are distinguishable. The issue in Suastez was when the right to vacation pay

vests, for purposes of a provision of the Labor Code requiring payment of vested vacation

time upon termination of employment. (Suastez, at p. 778.) The question in

Prachasaisoradej was whether the defendant properly deducted expenses in determining

store profits, which were then used as the basis for “supplementary incentive

compensation” payments to employees. (Prachasaisoradej, at pp. 222–224, 236–237.)

Finally, Murphy involved a Labor Code provision requiring the payment of an additional

hour of pay to employees denied a “ ‘recovery period’ ” (“a cooldown period afforded an

employee to prevent heat illness”). (§ 226.7.) The issue in the case was whether the

payment constituted wages/premium pay or a penalty, which affected the statute of

limitations period. (Murphy, at p. 1099.)

The “Union Vacation” payments at issue in the present case are fundamentally

different. The payments were not “vacation pay” within the meaning of Suastez.

(Suastez, supra, 31 Cal.3d at pp. 779–780.) Although each payment passed through his

check, appellant does not allege he exercised any control over the funds, which were

immediately deducted and (presumably) transferred to an “employer-financed trust[]”

(Great West, supra, 19 Cal.App.4th at p. 1558, fn.2), the Union Vacation Trust Fund.

Neither does he allege he could opt to alter or decline to make the contribution.

Furthermore, although appellant had some expectation of benefits from the trust fund, he

does not allege an entitlement to receive the entirety of the “Union Vacation” payments

back from the trust fund. Finally, although respondent’s obligation to make the payments

arose from appellant’s labor, appellant does not allege or present authority respondent

owed the payments to him, rather than to the trust fund. The CBA authorizes the trust

10

fund to bring an action to collect any delinquent employer contributions. In contrast,

Suastez, Prachasaisoradej, and Murphy each considered payments made to employees,

subject to their control, and actually owed to them under the applicable agreements or

statutes. The payments, therefore, were part of the compensation directly owed to the

employees for their labor.7

Thus, these cases provide no support for concluding the

disclosure of payments made to a Taft-Hartley trust fund is governed by Section 226(a).

Section 227.5, which expressly provides for the disclosure of such payments,

further undermines appellant’s interpretation of Section 226(a). As noted previously,

section 227.5 requires an employer to provide upon request an annual statement

regarding payments “to a health or welfare fund, pension fund or vacation plan, or such

other plan for the benefit of the employee,” including payments required by a CBA. The

contrast between section 227.5’s express reference to “payments to a health or welfare

fund, pension fund or vacation plan” and the absence of such an express reference in

Section 226(a) suggests the omission was intentional. (See Brown v. Kelly Broad. Co.

(1989) 48 Cal.3d 711, 725 (“ ‘It is a well recognized principle of statutory construction

that when the Legislature has carefully employed a term in one place and has excluded it

in another, it should not be implied where excluded.’ ”]; accord Wasatch Property

Management. v. Degrate (2005) 35 Cal.4th 1111, 1118; Porter v. Board of Retirement of

Orange County Employees’ Retirement System (2013) 222 Cal.App.4th 335, 345.)



7 Soto distinguished Suastez and Murphy on a different ground. Soto concluded the broad

definition of “wages” was not determinative of the issue before it, because “unused

vacation time does not become a quantifiable vacation wage until the employee separates

from the employment.” (Soto, supra, 4 Cal.App.5th at p. 391.) The court held Section

226(a) does not encompass the accrued value of vacation time because, although “[t]he

employee has vested rights to paid vacation or vacation wages during the time of his

employment, . . . these rights do not ripen and become an entitlement to receive the

monetary value of the benefit as wages until the separation date.” (Id. at p. 392.) The

present case is not distinguishable on that ground: the amount of the payments to the

Union Vacation Trust Fund was quantified, albeit without the hours and rate being

specified.

11

There is a second way in which section 227.5 undermines appellant’s

interpretation of Section 226(a). The “Union Vacation” payments are not the only

payments to a Taft-Hartley trust fund mandated by the CBA for appellant’s eventual

benefit. The CBA requires respondent to “pay hourly contributions for each hour paid

for and/or worked” at specified hourly rates for eight additional union trust funds. If the

fact that appellant will benefit from the “Union Vacation” payments means they are

wages, appellant fails to explain why the same cannot be said for some or all of the eight

other union trust funds specified in the CBA. For example, the CBA mandates a

“Pension” fund hourly contribution of $8.96, and Suastez observed that “vacation pay is

similar to pension or retirement benefits, another form of deferred compensation.”

(Suastez, supra, 31 Cal.3d at p. 780.) Because appellant fails to justify treating only the

Union Vacation Trust Fund payments as wages,8

appellant’s interpretation of Section

226(a) essentially renders section 227.5 surplusage. (Tuolumne Jobs & Small Business

Alliance. v. Superior Court (2014) 59 Cal.4th 1029, 1038 [“It is a maxim of statutory

interpretation that courts should give meaning to every word of a statute and should avoid

constructions that would render any word or provision surplusage.”].) If employers were

required by Section 226(a) to list payments to Taft-Hartley trust funds on wage

statements, the annual statements provided for by section 227.5 would provide an

employee little to no additional information.

Finally, appellant argues adopting his interpretation of Section 226(a) would

advance the purpose of the statute to “ ‘insure that employees are adequately informed of

compensation received and are not shortchanged by their employers.’ ” (Soto, supra, 4



8 The only distinction appellant offers is that he paid taxes on the “Union Vacation”

payments, but he presents no reasoning why or authority that the treatment of the

payments for federal taxation purposes is determinative. The federal taxation rules

apparently are responsible for the inclusion of the vacation trust fund payments, and not

payments to the other Taft-Hartley trusts, on appellant’s wage statements. However, that

does not justify treating only the payments to the Union Vacation Trust Fund as wages.

Absent some indication of legislative intent to the contrary, our interpretation of the

meaning of “wages” as used in Section 226(a) is not dictated by federal taxation rules.

12

Cal.App.5th at p. 392, quoting Assem. Com. on Labor and Employment, Analysis of Sen.

Bill No. 1255 (2011–2012 Reg. Sess.), italics omitted.) He argues, “An employee who

receives ‘Union Vacation’ wages will have no idea whether the correct amount was paid

to them, as the rate is not listed, nor are the applicable number of hours. Consequently,

they will not know whether the tax they are paying is correct.” At the outset, appellant is

mistaken in asserting the wage statements he received provided him “no means of

verifying that the ‘Union Vacation’ payment is the correct amount.” The wage

statements provided the information needed to verify the propriety of the payment

amount, because dividing the totals listed for “Union Vacation” on each statement by the

total number of hours worked shows that “Union Vacation” was paid at an hourly rate of

$2.63, as required by the CBA. Thus, appellant’s argument that “an employee has no

means of determining whether the amount being paid to them for the line item is correct”

is inaccurate.

More fundamentally, we reject appellant’s suggestion that policy considerations

permit this court to add to the statutorily required disclosures. While courts are required

to construe wage statutes broadly in favor of employees, “this principle does not provide

[courts] with the authority to rewrite applicable legislation.” (Soto, supra, 4 Cal.App.5th

at p. 393.) “ ‘The rules of statutory construction provide that “ ‘[u]nder the guise of

construction, a court should not rewrite the law, add to it what has been omitted, omit

from it what has been inserted, give it an effect beyond that gathered from the plain and

direct import of the terms used, or read into it an exception, qualification, or modification

that will nullify a clear provision or materially affect its operation so as to make it

conform to a presumed intention not expressed or otherwise apparent in the law.’ ” ’ ”

(Ibid.) In Soto, the court concluded that whether disclosure of information regarding

accrued vacation hours “should be required on a regular basis is a policy matter for the

Legislature and/or the regulatory agencies, and not the courts.” (Ibid.) Similarly, it is not

13

for this court to expand the required disclosures to include payments to Taft-Hartley

trusts funds.

9

Thus, the trial court properly sustained respondent’s demurrer on the ground that

appellant failed to state a claim for violation of Section 226(a), which also disposes of

appellant’s PAGA claim. (Arias v. Superior Court (2009) 46 Cal.4th 969, 987

[“Recovery of civil penalties under [PAGA] requires proof of a Labor Code violation.”].)

Appellant does not suggest any way his complaint can be amended to state a claim, so the

trial court did not err in sustaining the demurrer without leave to amend.10

The judgment is affirmed. Costs on appeal are awarded to respondent.