16 Aug 2023

MEAL AND REST BREAK PENALTIES ARE WAGES

A California Supreme Court decision in May 2022 made a significant change regarding meal and rest break penalties.  Prior to this decision, the additional hour of pay for missed and/or late meal and rest breaks was considered premium pay, not wages.  However, in Naranjo v. Spectrum Security Services, Inc., the Court not only ruled that premium pay for missed, late or short meal or rest breaks were considered wages and as a result, those wages must be included on wage statement, but also ruled that when an employee misses both a meal break and a rest break, the employee is entitled to two hours of premium pay.  Failure to pay premium payments and failure to include the premium payments on the wage statements for each pay period that the premium is incurred, is subject to waiting time penalties and wage statement penalties.

Remember, employers are required to provide non-exempt employees with a minimum 30-minute meal break before the end of their 5th hour of work.  A second meal break must be provided when an employee works more than 10 hours in a workday.  If the employee works 6 hours or less, the employee may waive the 1st meal break.  When the employee works more than 10 hours, if the employee took the first meal break, the 2nd meal break can be waived. (Please see your IWC Order for exceptions.  If you have union employees, please see your union contracts for specific requirements.)

Employees must be authorized and permitted to take at least a 10-minute rest break in the middle of each 4 hours of work.

Employees’ meal and rest breaks must be uninterrupted, a net 30 minutes for meal breaks and a net 10 minutes for rest breaks.  Employers are to relinquish control over employee activities and refrain from discouraging them from taking the rest/meal breaks.

Are your wage statements (pay stubs) compliant?

Make sure your paystubs/wage statements detail and properly calculate meal and rest break payments.

Other information required on the paystubs/wage statements are:

  • Employee’s full name and last 4 digits of social security number or the employee identification number
  • Name and address of employer
  • Pay period – inclusive dates of the pay period covered by the wage statement
  • Hourly wage
  • Hours worked (total number of hours worked in the pay period at each rate and how many of them are overtime hours (hours worked is not necessary for exempt employees)
  • Gross wages (total earnings prior to deductions, i.e. standard wages, overtime, fixed salaries, commissions, piece rate payments, project/task-based payments, room/board and clothing (if received as part of compensation)
  • Deductions (itemized deductions including social security, tax withholdings, retirement contributions, health insurance premiums, etc.)
  • Paid Vacation or paid sick time accrued over the pay period
  • Meal and rest break premium payments

For piece-rate workers, the wage statement must also include:

  • The rate for hours paid in each category
  • Total hours worked in compensable nonproductive time
  • Total hours of compensable recovery and rest breaks
  • Gross wages for nonproductive time, and recovery and rest breaks