What Counts as “Wages” in the Context of Waiting Time Penalties?

Labor Code §§ 201-203 require an employer to pay all wages owed to an employee who has been discharged or who has quit. If the employer fails to pay an employee all wages owed within the statutorily required time period, § 203 calls for a penalty on the employer equal to one day’s rate of pay for each day the employer fails to pay, for a time period not to exceed 30 days. An employer’s liability for waiting-time penalties under Labor Code § 203 flows directly from the violations established above. An employer can easily satisfy the requirement that their failure to pay proper wages upon termination was “willful.” The standard for willful is not high: “[t]he employer’s refusal to pay need not be based on a deliberate evil purpose to defraud workmen of wages which the employer knows to be due.” Rivera v. Rivera, No. 10-CV-01345-LHK, 2011 WL 1878015 at *7 (N.D. Cal. May 17, 2011). A willful failure to pay wages within the meaning of § 203 occurs when an employer intentionally fails to pay wages to an employee when those wages are due. Id.

Labor Code §§ 226.7 and 512 and the applicable wage orders require Defendant to authorize and permit rest and meal periods to its employees. Section 226.7 and applicable wage orders require employers to authorize and permit employees to take 10-minute rest periods for each four hours or major fraction thereof of work, and to pay employees their full wages during their rest periods. “[A]s a general matter,” one rest break should fall on either side of the meal break.” Brinker Rest. Corp. v. Super. Ct., (2012) 53 Cal. 4th 1004, 1032.

California also law prohibits employers from employing an employee for more than five hours without a meal period of at least 30 minutes, and from employing an employee more than ten hours per day without providing the employee with a second meal period of not less than 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.”, Id. at 1032.

“An employer must relieve the employee of all duty for the designated [rest or meal] period.” Id. at 1034. An employer cannot “impede or discourage [employees] from [taking breaks].” Id. at 1040. When an employer fails to provide a rest or meal period in accordance with the applicable wage orders, the employer must pay the employee one additional hour of compensation at the employee’s regular rate of pay for each workday that a required rest period is not provided, and one additional hour of pay at the regular rate for each work day that a compliant meal period is not provided. Labor Code § 226.7.

Additionally, an employer will be liable for waiting time penalties to members of the putative class that left their employment during the applicable limitations period for the unpaid premium wages for non-compliant breaks. Brewer v. General Nutrition Corp. (N.D.Cal. Aug. 27, 2015) 2015 WL 5072039 (“Having undertaken its own careful reading of the controlling California Supreme Court authorities, including the analysis of the legislative history and the strong California public policy to construe the Labor Code in favor of employees stated therein, the Court finds that the premium payments due under section 226.7 are to be considered “wages” for purposes of sections 203 and 226”); see also Parson v. Golden State FC, LLC (N.D.Cal. May 2, 2016) 2016 WL 1734010 at *4 (reviewing authority and finding 226.7 payments to be “wages” sufficient to bring a derivative claim under Labor Code § 204); Bellinghausen v. Tractor Supply Co. (N.D.Cal. Feb 3, 2014) 2014 WL 465907, at *8 (“If an employee is entitled to the additional hour of pay ‘immediately’ upon being forced to miss a rest or meal period, it appears inconsistent to conclude that an employee is not also immediately entitled to have the additional hour of pay documented on their wage statements and timely paid upon termination or resignation.”)