Wage and Hour Case Notes

• Citation: Vol. 34 No. 1
• Publication year: 2020
• Author: By Lois M. Kosch

Wage and Hour Case Notes

By Lois M. Kosch

Lois M. Kosch is a partner at Wilson Turner Kosmo. She represents employers in all aspects of employment law and litigation and also serves as an arbitrator both privately and through the American Arbitration Association. Ms. Kosch is a former member of the Labor and Employment Law Section's Executive Committee.

Meal and Rest Period Premiums Can Be Paid at Employee's Base Rate of Pay

Ferra v. Loews Hollywood Hotel, LLC, 40 Cal. App. 5th 1239 (2019)

The phrase "regular rate of compensation" for calculating meal or rest break premium payments is not synonymous and interchangeable with the phrase "regular rate of pay" associated with calculating overtime premium payments. In this case of first impression, the appellate court held that these statutory phrases have different meanings, and the premium for missed meal periods must be paid to the employee at the "regular rate of compensation," or the employee's base hourly wage, rather than at the "regular rate of pay" applicable to overtime payments. This decision is notable because "regular rate of pay" may fluctuate from pay period to pay period to include shift differentials or nondiscretionary bonuses.

If an employer fails to provide an employee with a meal or rest period, Labor Code § 226.7 requires the employer to compensate the employee through a premium payment at the employee's regular rate of compensation. Labor Code § 510, which governs overtime payments, mandates that the employee be compensated for overtime work through a premium on top of normal pay calculated according to an employee's regular rate of pay.

No published California opinion had previously addressed the issue of whether these two phrases are distinguishable. The Ferra court evaluated the plain language of the statutes, applicable Industrial Welfare Commission Wage Orders, legislative history, and persuasive federal opinions. The court concluded that the phrases are not interchangeable and accordingly, the premium payment for missed meal and rest periods is based upon the employee's base hourly wage—the "regular rate of compensation."

Violations of Meal Break Provisions Do Not Entitle Employees to Pursue Derivative Waiting Time and Itemized Wage Statement Penalties

Naranjo v. Spectrum Security Servs., Inc., 40 Cal. App. 5th 444 (2019)

Security officers brought a putative class action against their employer, a private contractor for federal prisons and Immigrations and Customs Enforcement (ICE). They alleged Labor Code § 226.7 meal break violations and sought premium wages, derivative remedies pursuant to Labor Code §§ 203 (waiting time penalties), and 226 (itemized wage statement penalties), and attorney fees.

The officers were required to take on-duty meal periods, but their on-duty meal period agreements did not contain a right-to-revoke clause. (See Wage Order 4, subdivision 11(A).) Where an on-duty meal period agreement does not contain a...