HR Management & Compliance

Wage and Hour: When Does the Missed Meal Penalty Have to Be Paid?

Can you give guidance on when the missed meal period penalty has to be paid? Does it have to be paid if an employee takes a 28-minute meal break, or if an employee takes their meal break after 51/2 or after 6 hours?
— Anonymous

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.

Lloyd W. Aubry, Jr., of counsel at Morrison & Foerster and former California Labor Commissioner, offers some insights into the tricky area of meal periods.

Under the Labor Code and Wage Orders, nonexempt employees who work at least 5 hours are entitled to one uninterrupted meal period of at least 30 minutes and a second meal period if they work more than 10 hours. The California Division of Labor Standards Enforcement (DLSE) recently issued proposed regulations designed to clear up confusion regarding when these meal periods must begin and what would happen if an employee chooses not to take a required meal break.

The proposed regulations provide that if an employer doesn’t provide an employee with a required meal or rest break, the employer must give the employee one additional hour of pay for each missed meal or rest break (but only one hour, if both rest periods are missed), in addition to pay for time the employee worked during that period. The proposed rules specify that this one hour’s pay is a penalty and not wages, and thus not subject to income tax withholding.

But what happens if an employee takes a break that’s just slightly too short, or if the timing is not exactly 5 hours? Will you still get hit with the penalty? According to Aubry, “Depending on how your time-clock practices work—if your time clock has, for example, a 5-minute rounding system—a 28-minute meal period may be okay. So, if the employee leaves at 11:30 and clocks back in at 11:58, and your clock rounds up to 12:00, you’d have your 30 minutes there. This would be acceptable, assuming that from time to time the employee also clocks out for lunch at 11:28 and the clock rounds forward to 11:30.

Turning to the other part of the question, under prior interpretations of the law, before these proposed regulations were issued, an employee had to begin the meal period by the beginning of the fifth hour, and employers were required to ensure that the employees actually took those 30 minutes. Now, the Schwarzenegger administration has proposed in these regulations that an employee does not have to begin the meal period by the beginning of the fifth hour. An employee can begin it at 51/2 hours, as long as it is finished by 6 hours. And they are also proposing that as long as the employer meets certain criteria in the regulation—i.e., that the employer provided a meal period and afforded employees the opportunity to take it—then the fact that the employee did not actually take it is not a violation and does not trigger the penalty.

But these are proposed regulations. They are highly controversial. Labor interests and the Legislature appear to be dead set against them. I would be very careful as an employer in terms of instituting a blanket policy that says it’s okay to begin the lunch period at 51/2 hours, and that it’s okay for an employee to work through the lunch period if he or she doesn’t want to take a lunch break. Frankly, I would not advise an employer to do it at this time.

We should know in the next few months the status of these regulations—at least whether they’ll be finalized and approved by the Office of Administrative Law meaning they will have the force of law. I imagine there will be a lawsuit that will challenge their legality if they are approved and finalized. At least while they’re in effect, it would seem to me you could do the things we just discussed, have a meal-period after 51/2 hours and, as long as you meet the criteria that are in the regulations, the employee wouldn’t necessarily have to take the meal period. However, there is the possibility that the regulations could be overturned, leaving any late or untaken meal periods as the source of potential litigation.

The regulations can be found on the DIR website. I’d be very reluctant to follow what are—at this point—only proposed regulations. Since they haven’t been finalized, they don’t have the force of law.

Lloyd W. Aubry, Jr., is of counsel at the San Francisco office of law firm Morrison & Foerster.