This case serves as a reminder of the importance of compliance with California's meal and rest break requirements.

In a recent case (Naranjo v. Spectrum Security Services Inc.), the California Supreme Court has ruled that the extra pay an employer must pay an employee if the employee works during their meal break constitutes wages for purposes of California's final pay and itemized wage statement requirements. This means that employers must report these payments on wage statements and must ensure that these payments are timely paid to employees. The failure to do so can lead to significant penalties.

The Details

Under California law, nonexempt workers are entitled to a 10-minute paid rest break for every four hours worked "or major fraction thereof." Employees must also receive a 30-minute unpaid meal break for every five hours they work. They 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 but can be waived if the first break was taken and the employee works no more than 12 hours. Click here for more information.

California law also provides for a penalty when there is a willful failure to pay wages due the employee at conclusion of the employment relationship. The penalty is measured at the employee's daily rate of pay and is calculated by multiplying the daily wage by the number of days that the employee was not paid, up to a maximum of 30 days. The 30-day period is calendar days and includes weekends and holidays and any other days that the employee would not normally work. Click here for more information.

Finally, California law requires employers to provide accurate employee wage statements, including, among other requirements, hourly rates in effect, hours worked, gross wages and net wages earned. The failure to do so can lead to penalties including but not limited to a penalty in the amount of $50 for the initial pay period violation and $100 for every subsequent violation with a $4,000 aggregate cap per employee.

California Supreme Court Decision

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 forms of compensation for work. Consequently, payments for missed meal and rest breaks must be reported on the employee's wage statements and must be timely paid to avoid substantial penalties for noncompliance.

Next Steps

This case serves as a reminder of the importance of compliance with California's meal and rest break requirements. California employers should strictly adhere to these requirements and ensure that payments made to employees for missed meal and break times are reported on wage statements and are paid timely.

ADP Compliance Resources

ADP maintains a staff of dedicated professionals who carefully monitor federal and state legislative and regulatory measures affecting employment-related human resource, payroll, tax and benefits administration, and help ensure that ADP systems are updated as relevant laws evolve. For the latest on how federal and state tax law changes may impact your business, visit the ADP Eye on Washington Web page located at www.adp.com/regulatorynews.

ADP is committed to assisting businesses with increased compliance requirements resulting from rapidly evolving legislation. Our goal is to help minimize your administrative burden across the entire spectrum of employment-related payroll, tax, HR and benefits, so that you can focus on running your business. This information is provided as a courtesy to assist in your understanding of the impact of certain regulatory requirements and should not be construed as tax or legal advice. Such information is by nature subject to revision and may not be the most current information available. ADP encourages readers to consult with appropriate legal and/or tax advisors. Please be advised that calls to and from ADP may be monitored or recorded.

If you have any questions regarding our services, please call 855-466-0790.

ADP, Inc.

One ADP Boulevard, Roseland, NJ 07068

adp.com

Updated on June 2, 2022

Tags: state and local