On May 23, 2022, the California Supreme Court issued its highly anticipated ruling in Naranjo v. Spectrum Security Services and decided two critical questions: first, whether an employee is entitled to “waiting time penalties” for unpaid premium pay, and second, whether employers are required to report premium pay on their employees’ wage statements.
As all members of the defense bar anticipated, the California Supreme Court answered both of these questions in the affirmative, and in turn significantly increased California employers’ potential exposure in wage and hour litigation.
Naranjo involved a putative wage and hour class action brought by an employee against his former employer alleging the failure to provide proper meal breaks. The legal analysis concerned the intersection of three aspects of California wage and hour law: “premium pay,” “waiting time penalties,” and wage statements. California law provides that employees are entitled to both meal and rest breaks throughout the workday. To the extent an employee does not receive a legally compliant meal and/or rest break, the employee is then entitled to an additional hour of wages for every missed break paid at the employee’s regular rate of compensation, which is referred to as “premium pay.”
As for “waiting time penalties” they are incurred when an employer fails to timely provide an employee with their final wages upon separation. These penalties are equal to the amount of the employee’s daily rate of pay for...
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