The California Supreme Court has handed down an important new decision, answering a wage and hour question that recently has plagued the state’s appeals courts: Is the required payment of “one additional hour of pay at the employee’s regular rate of compensation” for each day that an employer fails to provide mandatory meal or rest periods to an employee considered wages or a penalty?
According to the high court, the additional hour of pay for missed breaks is wages. And that means that claims to recover that additional hour of pay are governed by a lengthy three-year statute of limitations, rather than the one-year statute of limitations that applies for recovery of penalties. Thus, employees who claim they haven’t received breaks have three years to file a claim and can recover up to three years’ worth of the extra pay. (The extra hour of pay requirement is specified in California Labor Code section 226.7.)
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.
This ruling—a major victory for employees and their lawyers—means that California employers that make missteps with respect to meal and rest breaks may find themselves on the hook for huge back pay awards. And while over the past several years employers already have seen a big uptick in the number of lawsuits challenging meal and rest period practices, this new decision is likely to encourage even more workers to sue. We’ll have the full story on the impact of this decision in an upcoming issue of the California Employer Advisor.