California Supreme Court: Meal And Rest Period Premiums Are Wages Under State Law
Published date | 25 May 2022 |
Subject Matter | Employment and HR, Employee Benefits & Compensation |
Law Firm | Holland & Knight |
Author | Mr Samuel J Stone, Linda Auerbach Allderdice and John H. Haney |
Highlights
- The California Supreme Court holds that meal and rest period premium payments for a missed, late or interrupted meal or rest break are wages for purposes of California's final pay and itemized wage statement requirements.
- Treating premium payments as wages for purposes of compliance with the California Labor Code has broad impact for employers and potentially enormous adverse financial consequences for noncompliance.
The California Supreme Court issued its long-awaited decision in Naranjo v. Spectrum Security Services, Inc., _ Cal. 5th _, S258966 (2022) on May 23, 2022. The decision answers, with a resounding "yes," the previously unresolved question of whether meal and rest period premium payments were wages under California law. Given the host of broad-ranging implications of the decision with respect to itemized wage statements, pay during employment and final pay upon separation, all employers with any employees in California should take immediate steps to ensure compliance with California's meal and rest break rules.
The Brinker Framework
California law generally requires employers to provide nonexempt employees with an unpaid, uninterrupted, off-duty 30-minute meal period prior to the end of the fifth hour of work, and a second such meal period prior to the end of the tenth hour of work. Employers also are required to provide employees with a paid, uninterrupted 10-minute rest break for every four hours worked (or major fraction thereof) to be taken in the middle of the four-hour working period if practicable. The penalty for failing to provide a legally mandated meal or rest period, providing a short or interrupted meal or rest period or failing to provide a timely meal or rest period entitles the employee to payment of one hour of wages at the employee's regular rate of pay; that is, the "premium" payment. The employer's obligation, under Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012), is to authorize and permit the meal or rest period, not police that it is taken.
Premiums Are Wages, Not Penalties
Divergent approaches to meal and rest premium pay arose following Murphy v. Kenneth Cole Productions, Inc., 40 Cal. 4th 1094 (2007) and Kirby v. Immoos Fire Protection, Inc. 53 Cal. 4th 1244 (2012). In Murphy, the California Supreme Court held that premium payments are wages subject to a three-year statute of limitations. But in Kirby, the California Supreme Court held that attorneys' fees cannot be recovered in...
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