California Court holds employers liable for up to two hours’ wages per day for meal and rest period violations
In a major decision determining the scope of employers’ liability for meal and rest period violations, the California Court of Appeal in Los Angeles ruled that employers may be liable for up to two hours’ additional wages per day for meal and rest period violations. California law provides for premium pay of an additional hour of wages for each day that employers do not provide a meal or rest period as required. Taking an approach treating meal and rest periods as separate categories, the court held in United Parcel Service, Inc. v. Superior Court that an employer may be liable for up to two hours of such premium wages per work day: one hour if the employer fails to provide a meal period, and another hour for not providing a rest period.
The decision involved 32 cases alleging meal and rest period violations, coordinated into a single matter in Los Angeles County Superior Court. The issue before the appeals court was the scope of liability imposed by California Labor Code section 226.7(b). The statute provides: “If an employer fails to provide a meal period or rest period in accordance with an applicable order of the Industrial Welfare Commission, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each work day that the meal or rest period is not provided.”
Effective in 2001, the statute has been the subject of varying interpretations concerning the number of premium pay amounts that may be due for violations in a single day. One interpretation argued that the law authorizes only one premium payment per work day, regardless of the number or type of break periods not provided in a day. A second interpretation looked at meal and rest periods separately, with two premium payments possible per day: one for the failure to provide a meal period, with a second possible for any failure to provide any rest period. A third interpretation— argued by employees in some cases—has sought imposition of a separate premium pay amount for each meal or rest period violation. In administrative cases, the California Labor Commissioner has followed the second view, allowing recovery of separate amounts for meal and rest periods.
Until United Parcel Service, no California court ruled on this significant issue in a published decision. In this case, the employer focused on the statute’s use of “work day” to argue only one hour of premium pay could be imposed for each day, regardless of the number or type of violations. The employees, on the other hand, emphasized the law’s use of the disjunctive “or” to argue that meal and rest periods should be treated separately, with recovery of separate premium pay amounts for any meal period violations and for rest period violations in a day.
The court acknowledged that “the interpretations advanced by the parties are both reasonable, depending on the words that are the focus of the argument.” Ultimately, looking at the law’s legislative history and the wage orders, the court sided with the employees’ interpretation. The wage orders address meal and rest periods separately, with separate premium pay amounts for violations. Subsequent legislative history indicated that the Legislature intended to codify that same scheme. Thus, the court concluded that “we believe it is more reasonable to construe the statute as permitting up to two premium payments per work day—one for failure to provide one or more meal periods, and another for failure to provide one or more rest periods.”
Before this decision, federal courts applying California law reached different conclusions. The court heavily discussed and followed Marlo v. United Parcel Service, Inc., a decision from a federal court in Los Angeles. Corder v. Houston’s Restaurants, Inc., an earlier decision out of the same federal court, looked at the law’s plain language to hold that the law allows for recovery of a single premium pay amount per day. The state court did not cite or discuss Corder. However, as a state court decision interpreting California law, federal and state courts most likely will follow the new decision in United Parcel Service.
Because of the significance of the issue, this decision may attract review from the California Supreme Court. That court has reviewed—and currently is reviewing—other significant issues concerning California’s meal and rest period requirements. In 2007, the California Supreme Court held that section 226.7(b) provides for wages rather than a penalty, allowing for a three- or four-year statute of limitations rather than a one-year period. Currently, in Brinker Restaurant Corp. v. Superior Court, the California Supreme Court is reviewing several meal and rest period issues. The main issue there is whether an employer’s obligation to provide a meal period requires only that a meal period be made available, or whether the employer also must ensure that an employee takes the meal period. Brinker Restaurant is fully briefed, but no hearing date has been scheduled.