California Supreme Court Announces New Standard for Missed Meal and Rest Periods
One of the ways California protects your rights as an employee is by requiring your employer to give you meal and rest breaks. If your employer doesn’t let you take your breaks as required by the law, they have to pay you a premium. This premium is not at the employee’s normal “base” hourly rate, but must be at the same “regular rate” that is used to calculate overtime premiums.
The California Supreme Court’s recent decision in Ferra v. Loews Hollywood Hotel, LLC held that paying employees meal and rest period premiums at their base hourly rate is no longer acceptable.
Employers must now account for not only base hourly wages, but also other non-discretionary payments for work performed by employees when determining the rate of pay for meal and rest period premiums. This includes:
- Shift premiums
- Incentive payments
- Non-discretionary bonuses
The Meal and Break Rules
For many employees, an employer has to give one or more 10-minute rest breaks after an employee works more than 3.5 hours in a day. At a minimum, an employer also has to give one or more 30-minute meal breaks for many employees who work more than five hours in a day. Breaks have to be uninterrupted, and an employee has to be relieved of all of their work duties during meal and rest breaks.
If an employee does not receive a required break, their employer has to give them an extra hour of pay. The decision in Ferra v. Loews clarifies what that extra hour of pay should look like.
How Ferra v. Loews Affects the Meal and Break Laws
Section 226.7(c) of California’s Labor Code states that an employer must give an employee “one additional hour of pay at the employee’s regular rate of compensation” for each workday that a break isn’t given.
In Ferra, the Court settled a dispute between Ferra, the employee, and a Loews Hotel in California, the employer, about how much an employer should pay for a missed break. Loews Hotel argued that the regular rate of compensation meant just Ferra’s hourly rate. Ferra argued that the regular rate of compensation included her hourly rate and incentive pay.
Ferra’s argument pointed out that when Labor Code Section 510 requires an employer to pay one-and-one-half to two times an employee’s “regular rate of pay” for overtime, the regular rate of pay includes an employee’s base rate and any non-discretionary payments they receive.
Ultimately, the Court held that the regular rate of compensation for missed breaks should include the employee’s base hourly rate and her incentive pay. The Court also ruled that its decision applies retroactively. This means that that employer might have to pay a regular rate of pay, including the base rate and non-discretionary compensation, for missed breaks that occurred before July 15, 2021.
You have a right to be paid accordingly as an employee. The attorneys at Kershaw Cook & Talley are dedicated to protecting and upholding employees’ rights. If your employer has not allowed you breaks as required by the law, you need to make sure that you receive proper payment based on a complete wage history of your total compensation.
Please call us at (916) 520-6639 for a free consultation.