Additional Penalties May Be Recoverable for Meal and Rest Period Violations in California

By Joanne Deschenaux, J.D. June 1, 2022
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Takeaway: Employers should include premium payments for missed meal and rest breaks on employee wage statements for the pay periods in which the premiums are owed and ensure that employees' final wages include any premium payments the employees have earned.

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​California law requires employers to provide daily meal and rest breaks to most unsalaried employees. If an employer unlawfully makes an employee work during all or part of a meal or rest period, the employer must pay the employee an additional hour of pay. California's highest court ruled that this extra pay for missed breaks constitutes "wages" and therefore must be reported on statutorily required wage statements and paid within statutory deadlines when an employee separates from employment.

Failure to comply with these requirements may subject the employer to additional penalties for meal and rest period violations.

A security guard who worked for a company that transported prisoners to appointments outside the custodial facilities was suspended and later fired after leaving his post to take a meal break, in violation of a company policy that required custodial employees to remain on duty during all meal breaks. The guard filed a class action on behalf of the company's employees, alleging that the employer had violated state meal break requirements under the Labor Code and the applicable Industrial Welfare Commission wage order.

The complaint sought an additional hour of pay—commonly referred to as "premium pay"—for each day on which the company failed to provide employees a legally compliant meal break.

The complaint also alleged two Labor Code violations related to the employer's premium pay obligations. According to the complaint, the employer was required to report the premium pay on employees' wage statements under Section 226 of the Labor Code and timely provide the pay to employees upon their discharge or resignation under Section 203 but had done neither. The complaint sought the damages and penalties prescribed by those statutes.

The trial court found the employer liable for meal break violations and concluded that the obligation to supply meal break premium pay also carried with it reporting and timing obligations. The employer appealed.  

The California Court of Appeal affirmed the trial court's determination that the employer had violated the meal break laws, but reversed the court's holding that a failure to pay meal break premiums could support claims under the wage statement and timely payment statutes.

The California Supreme Court granted review and reversed the Court of Appeal in part, ruling that the extra pay for missed breaks constitutes wages and therefore must be reported on statutorily required wage statements and paid within statutory deadlines when an employee separates from employment.

Waiting Time Penalties

When an employment relationship comes to an end, the Labor Code requires employers to promptly pay any unpaid wages to the departing employee. Labor Code Section 203 prescribes a sanction for employers who willfully fail to pay the full amounts due.

Section 203 penalties for willful delays in the payment of end-of-employment wages are commonly referred to as "waiting time penalties."

Section 203 imposes a penalty for the willful failure to timely pay "any wages," the high court said. The Labor Code defines the term "wages" to include "all amounts for labor performed by employees of every description."

The Court of Appeal had reasoned that payment for missed breaks is a legal remedy, not payment for labor. The premium pay is due to employees not for work they performed but for the employer's failure to provide legally required meal breaks, that court had ruled.

The high court disagreed. Yes, it said, premium pay is a statutory remedy for a legal violation. But this does not mean that it cannot also constitute wages. An employee becomes entitled to premium pay for missed or noncompliant meal and rest breaks precisely because he or she was required to work when he or she should have been relieved of duty.

The additional hour of pay can therefore be understood as a wage to compensate employees for the work they performed during a meal or rest period, the high court said.

Because missed-break premium pay constitutes wages for purposes of Labor Code Section 203, waiting time penalties are available under that statute if the premium pay is not timely paid, the court concluded. 

Wage Statements

The wage statement statute, Section 226 of the Labor Code, requires employers to provide employees with detailed information, including hours worked, wages earned and hourly rates.

Employees who are injured by a knowing and intentional failure by an employer to comply with this requirement may recover damages.

Because premium pay for missed meal breaks can be considered wages, the California Supreme Court concluded that this requirement that "wages" be reported on wage statements extends to these premium payments.

It does not matter that the payments were not actually made, the court said. Labor Code Section 226 requires the employer to list all amounts earned and owed to the employee, not just those amounts actually paid. A statement that conceals amounts earned on the ground that they also were not paid is not an accurate statement, and it does not comply with the statute, the court said.

Naranjo v. Spectrum Security Services Inc., Calif., No. B256232 (May 23, 3022).

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.

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