On May 23, 2022, the California Supreme Court issued its decision in Naranjo v. Spectrum Sec. Servs. Inc. (Naranjo), holding that meal and rest break premiums (also known as extra pay or premium pay) constitute “wages” that: (1) must be accurately reported on employee wage statements pursuant to Labor Code section 226 and (2) must be timely paid to employees to avoid waiting time penalties pursuant to Labor Code section 203. The Court explained that “although the extra pay is designed to compensate for the unlawful deprivation of a guaranteed break, it also compensates for the work the employee performed during the break period.” Thus, employees may be entitled to wage statement penalties and waiting time penalties where the employee worked through their break.
Labor Code section 226 imposes a penalty against employers for the knowing and intentional failure to print accurate mandated information on wage statements (such as gross wages earned, total hours worked, etc.), known as “wage statement penalties.” Similarly, Labor Code section 203 imposes a penalty against employers who willfully fail to timely pay “wages” at the time of an employee’s separation, known as “waiting time penalties.”
At issue in Naranjo was whether an employer’s failure to pay meal or rest break premiums trigger wage statement penalties under Labor Code section 226 and waiting time penalties under Labor Code section 203. Previously, the California Second District Court of Appeal held that...
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