Under the California Labor Code, an employer that fails to provide employees with a required meal or rest period must pay the employee an extra hour’s pay. But a controversy is brewing over whether this remedy is a penalty or just wages. Why does it matter? To recover a penalty, an employee must file a claim within one year, but an employee has three (and sometimes four) years to make a claim for back wages. Plus, a penalty, unlike wages, isn’t subject to income tax withholding.
Last week, a California appeals court ruled that this meal and rest break remedy is a form of wages. But in December, another California appeals court concluded it was a penalty. In light of the conflict in the courts, the matter will likely be taken up by the California Supreme Court. We’ll keep you posted.
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.