HR Management & Compliance

Wage and Hour: State Moving To Change Certain Meal Period Rules And Overtime Exemption Requirements

We recently reported on California’s plan to amend the wage rules to drop the requirement of paying overtime after eight hours in a day, in favor of the federal law that requires overtime pay only after 40 hours in a week. However, some other changes are also in the works. Here’s what you should know.

The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.

Meal Periods

California’s wage and hour rules are contained in different sets of regulations known as “wage orders.” The particular wage order that applies to you depends on your industry and/or the occupations of your employees.

Currently, most wage orders specify that employees who are not exempt from the overtime laws and work more than five hours must be given a meal period, which can be unpaid, of at least 30 minutes. If the shift doesn’t exceed six hours, the meal period can be waived if you and the employee agree. Health care industry workers covered by wage orders for Professional, Technical, Clerical, Mech- anical and Public Housekeeping classifications have a special right to waive meal periods if they work shifts longer than eight hours.

Under the proposed changes, the ability to waive meal periods would be expanded to other types of workers. All employees under wage orders for Manufacturing; Professional, Technical, Clerical, Mechanical; Public House- keeping; Mercantile; and Transporta- tion would have the right to voluntarily waive their right to a meal period if they work shifts in excess of eight hours.

However, to be valid, the waiver would have to be in writing and voluntarily signed by you and the employee. And, if the person works through any of their meal periods or eats while on duty, you would have to pay them for that time. The employee could revoke the waiver by giving you at least one day’s notice.

Finally, keep in mind that time spent working instead of taking a meal period counts towards total hours worked in a day or week and could trigger overtime liability.

Commissioned Employees

Wage Orders covering Professional, Technical, Clerical, Mechanical and Mercantile classifications currently provide an exemption from overtime for commissioned employees. The proposal would extend this exemption to commissioned employees who come under the wage order for Public Housekeeping.

Proposed New Standard for Exempt Employees

In California, managerial, administrative and professional employees are exempt from overtime requirements provided that, among other things, they’re engaged in work that’s primarily intellectual, managerial or creative. “Primarily” generally means that more than 50% of the employee’s work must be devoted to such duties.

Now, the state is proposing to ease this strict definition for the wage orders for Manufacturing; Professional, Technical, Clerical, Mechanical; Public Housekeeping; Mercantile; and Transportation employees. The change would make the law consistent with the more relaxed federal standard and make it easier for em- ployees to qualify for exempt status.

The new definition says that, as a rule of thumb, more than 50% of a worker’s time must be spent on exempt responsibilities. But, if the employee can’t meet this requirement, they can still qualify as exempt if other factors show that managerial or administrative duties are their primary responsibility.

The considerations include the relative importance of exempt duties compared to other tasks, and how often the employee exercises discretion. Other factors are the employee’s freedom from supervision, and the relationship between the employee’s salary and the wages paid to others for the kind of nonexempt work performed by the employee.

Proposals Going Forward

The Industrial Welfare Commission will be holding public hearings on the proposed changes. If passed, the proposals could take effect on January 1, 1998. Call (415) 975-0761 for more information.

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