Under the California
Labor Code, any employee you don’t provide with a required meal or rest break
must be given one additional hour of pay for each missed meal or rest break—and
pay for time the employee worked during that period. But a controversy has been
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 lodge a claim for back
wages. Plus, a penalty, unlike wages, isn’t subject to income tax withholding.
In the lapsed meal
period regulations (see cover story), the state Division of Labor Standards
Enforcement took the position that the remedy was a penalty. Two
courts have reached the same conclusion in the past few months.1
But another California
appellate court has taken the opposite side, finding that this meal and rest
break remedy is actually a form of wages.2 The case involved a class action lawsuit filed
against National Steel and Shipbuilding Co. in San Diego, charging that the
company violated the law by requiring employees to work more than five hours
per day without a meal break.
Because of the conflict
in the courts, the California Supreme Court will likely take up this matter.
We’ll keep you posted. In the meantime, you can find these decisions online at www.courtinfo.ca.gov/opinions/.
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1 Murphy v. Kenneth Cole
Prods. Inc.,
Court of Appeal (1st Dist.) No. A107219, 2005; Mills v. Superior Court,
(2nd Dist.) No. 184760, 2006
2 National Steel and
Shipbuilding Co. v. Superior Court,
Court of Appeal (4th Dist.) No. D046692, 2006
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.