Missed-Break Premium Wages

Labor Code sections 226.7 and 512 in conjunction with Industrial Welfare Commission (“IWC”) Wage Order No. 5 (California Code of Regulations, tit. 8, sec. 11050) require Defendants to authorize and permit meal and rest breaks to their employees.  California law prohibits employers from employing an employee for more than five hours without a meal period of at least 30 minutes.  “[A]n employer’s obligation is to provide an off duty meal period: an uninterrupted 30–minute period during which the employee is relieved of all duty.”  Brinker Rest. Corp. v. Super. Ct. (2012) 53 Cal.4th 1004, 1035.  In order for an employee to be relieved of all duty, the employee must be free to leave the workplace premises.  Id. at 1036.  An employer cannot “impede or discourage [employees] from [taking breaks].”  Id. at 1040.

Section 226.7 and IWC Wage Order No. 5 also require employers to authorize and permit employees to take 10-minute rest breaks for each four hours of work, or major fraction thereof, and to pay employees their full wages during their rest breaks.  A “major fraction of four hours” means greater than two hours.  Brinker, supra, 53 Cal.4th at 1029.  Unless the employee is relieved of all duty during the 30-minute meal break and 10-minute rest break, the employee is considered “on duty” and the meal or rest break is counted as time worked under the applicable wage orders.

When an employer fails to provide a meal or rest break in accordance with the applicable wage orders, the employer must pay the employee one additional hour of pay, or “premium wage”, at the employee’s regular rate of pay for each workday that a required meal break is not provided, and one additional hour of pay for each work day that the requisite number of rest breaks are not provided.  Labor Code § 226.7.  Missed-break premium wages are subject to a four-year statute of limitations when paired with an unfair business practices claim.  Murphy v. Kenneth Cole (2007) 40 Cal.4th 1094 (hour of pay for missed breaks is premium wage, subject to same statute of limitations as action for unpaid wages); Sullivan v. Oracle Corp. (2011) 51 Cal.4th 1191 (UCL, which carries four-year statute of limitations, provides remedy for failure to pay wages).

Meal and rest break violations give rise to various statutory and civil penalties.  Labor Code § 226 provides for a statutory penalty to employers who knowingly and intentionally fail to report wages earned on their employees’ paystubs.  Since missed-break premium wages are considered wages under Murphy v. Kenneth Cole, an employer’s failure to report missed-break premium wages on its employees’ paystubs gives rise to section 226 inaccurate wage statement penalties.

Labor Code §§ 201 and 203 provide for a statutory penalty to employers who willfully fail to pay to their employees all wages earned immediately upon termination.  Since missed-break premium wages constitute wages, an employer’s failure to pay such premium wages to terminated employees gives rise to section 203 waiting time penalties.

Various civil penalties are recoverable through the Labor Code Private Attorneys General Act (Lab. Code § 2698 et seq.) (“PAGA”).  Labor Code § 2699 provides for a penalty for a violation of any Labor Code provision, unless another penalty is already provided.  Labor Code § 210 provides for a penalty for non-payment of wages.  Labor Code § 558 provides for a penalty for any violation of the IWC Wage Order.  Finally, Labor Code § 226.3 provides for a civil penalty for wage statement violations.  PAGA also permits an employee to bring a representative action on behalf of other similarly aggrieved employees.  The statute of limitations on PAGA penalties is one year.