Earlier this week, in the latest of a line of cases expanding the scope of potential liability for California employers in wage-and-hour litigation, the California Supreme Court ruled that premiums owed to employees for violations of the meal and rest break requirements constitute wages under California law. The import of the Court’s holding in Naranjo v. Spectrum Security Services, Inc., is that employers may be liable for additional – and significant – derivative penalties if there are underlying meal and/or rest break violations.
As California employers know, employees are entitled to an unpaid, uninterrupted, duty-free thirty-minute meal period for all shifts over five hours and ten-minute paid rest periods every four hours of work (or major fraction thereof). If an employer does not permit these meal and rest breaks, it owes the affected employee a penalty in the amount of one hour’s pay at the employee’s regular rate of pay (the calculation of which has itself been the subject of debate, as we report here). The question before the Court in Naranjo was whether that penalty is considered a wage for purposes of the Labor Code’s requirements that employers timely pay wages and provide accurate wage statements. The Court concluded that they were.
This determination should concern employers due to the remedies available for violations of the timely-pay and wage-statement laws. Failure to pay any wages owed during employment can entitle a former employee to recover...
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