The California Supreme Court ruled that the wages an employer must pay employees if they work during their meal break should be calculated using the employee’s regular rate of pay. This payment constitutes wages for California’s final pay and itemized wage statement requirements. The ruling means that employers must report these payments on employee wage statements. The failure to do so can lead to significant penalties.

Under California law, non-exempt workers are entitled to a 10-minute paid rest break for every four hours worked “or major fraction thereof.” Employees must also receive, at minimum, a 30-minute unpaid meal break for every five hours worked. Employees can waive their right to take a meal break only if they work no more than six hours. A second break must be provided after 10 hours; however, it can be waived if 1) the first break was taken and 2) the employee works no more than 12 hours. More details about meal periods are available on the California Department of Industrial Relations (DIR) website..

The California Supreme Court concluded that the extra pay for missed meal and break periods is considered wages. The court explained that while 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. As such, the extra pay is considered wages subject to the same wage statement and final pay requirements as other compensation forms for work performed. Consequently, payments for missed meals and rest breaks must be reported on the employee’s wage statements and be paid to avoid substantial penalties for noncompliance.

Failure to Pay Wages

California law also assesses penalties when there is a willful failure to pay wages due to the employee at the conclusion of their employment. The penalty is measured at the employee’s daily rate of pay and calculated by multiplying the daily wage by the number of days the employee was not paid, up to a maximum of 30 days. The 30-day period is calendar days and includes weekends, holidays, and other days the employee would not typically work.

This information is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2022 CBIZ. All rights reserved.