California Supreme Court Settles Pay Rate for Missed Meal, Rest and Recovery Periods

Posted on Thursday October 14, 2021

In July 2021, the California Supreme Court settled the matter of how much employers have to compensate employees who missed meal, rest, or recovery periods. Such breaks are mandatory under California law in most employment scenarios, and the law states that employers who deny employees their deserved breaks should pay an employee a premium or one hour’s worth of pay for each missed break period.

The court’s ruling was beneficial to California employees who have missed meal or rest period claims, and anyone who believes they have such a case should speak with a California wage and hour attorney right away. 

The Court’s Decision

In the case of Ferra v Loews Hollywood Hotel, LLC, the question before the court was whether an employer could use a base rate of pay to compensate employees for missed breaks or whether their entire “regular rate of pay” should be considered. The plaintiff, in this case, was a bartender who received one hour of pay from her employer when she could not take a mandatory break. Loews used her base hourly rate to compensate her each time. 

However, the plaintiff also received a non-discretionary quarterly bonus, and she argued that it should be factored into the calculations of the proper rate for missed break compensation. The California Supreme Court ruled in the employee’s favor. 

Under the law, employers must use the “regular rate of pay” to calculate overtime rates. This includes all incentive and non-discretionary payments in addition to the employee’s base hourly rate. However, employers generally used the base hourly rate when calculating one hour’s compensation for missed rest or meal periods. The court ruled that the calculations for both overtime rates and break premiums should be calculated in the same manner. 

Any employers who pay a break premium to employees will need to immediately recalculate how much the premium should be, taking into account additional non-discretionary pay of the employee. This ruling is applied retroactively, which means that employees who have not received enough in break premiums in the past could seek unpaid wages from their employer if they deserved more than their base hourly rate.

Technically, employees can seek such unpaid wages for up to four years of break premiums that were less than they deserved. To know whether you have a case, consider the following:

• Did your employer provide premiums for missed rest, meal, or recovery periods?
• Is your base hourly rate different from your regular rate of pay due to non-discretionary income?
• Did your employer base your break premiums on your base hourly rate?

If you answered yes to all of these questions, you should speak to an employment attorney right away about a possible case. 

Let a California Wage and Hour Lawyer Help You

At Mara Law Firm, we handle a wide range of wage and hour claims for California employees. Contact us online or call (619) 234-2833 for a case evaluation if you believe that you might have any type of wage claim.