On May 23, 2022, the California Supreme Court held that the extra hour of pay (“premium pay”) owed to an employee who misses a rest or meal break is “wages.” This means that premium pay must be reported on the employee’s wage statements under Labor Code section 226(a), and if such payments are outstanding at the time the employee separates from employment, the employer may be subject to "waiting time penalties" under Labor Code section 203 for failure to pay all wages due at discharge.
Prior to the decision, it was unsettled whether missed-break premium pay constituted "wages" under sections 226(a) and 203. The Supreme Court reasoned that, although premium pay for missed rest and meal breaks is intended to compensate the employee for the missed break, it is also meant to compensate for work the employee performed during the break period, and thus it qualifies as "wages." Under the decision, an employer’s failure to report premium pay accurately on wage statements may give rise to statutory penalties under Labor Code section 226(e), and an employee who has not received all premium pay owed at the time of discharge may be able to recover waiting time penalties under Labor Code section 203. Additionally, the Supreme Court confirmed that meal and rest break violations are subject to a prejudgment interest rate of 7 percent. The decision, Naranjo v. Spectrum Security Services, Inc., No. BC372146 (May 23, 2022), is available here. Posted by Ally Girouard |
AuthorsWilliam Jhaveri-Weeks is the founder of The Jhaveri-Weeks Firm, a San Francisco-based civil litigation practice for individuals and organizations. Archives
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