Higher Rate of Pay Now Required for Missed Meal and Rest Breaks – Retroactive
The California Supreme Court has ruled that an employer that fails to provide a legally compliant meal period or rest break must pay a wage premium at the “regular rate of compensation.” This rate includes not just hourly wages but all nondiscretionary payments (such as nondiscretionary bonuses) for work performed by the employee.
Labor Code section 226.7(c) states “the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided.” However, neither the Labor Code nor California’s Wage Orders define “regular rate of compensation” such that the term could reasonably be construed to mean either hourly wages or hourly wages plus nondiscretionary payments. The California Supreme Court answered this question, finding the latter interpretation to be the correct one. Thus, when employees miss meal periods or rest breaks, you must ensure that they are paid an hour of premium pay at their “regular rate,” factoring in wages plus all nondiscretionary payments