Break Premiums Ruled Wages, Must Be Reflected on Pay Stubs

If an employee misses one or more off-duty meal breaks by the press of a day’s work, California Labor Code 226.7  requires the employer to pay an additional one-hour “break premium.” The same is true for any day that work demands cause an employee to miss one or more off-duty rest breaks.

Until recently, courts have treated these premiums as penalties not subject to certain wage laws. That changed with the California Supreme Court’s May 23, 2022 decision in Naranjo v. Spectrum Security Services, Inc. The court concluded that missed break premiums:

• Are wages;
• Must be included on wage statements required under Labor Code 226;
• If not included, are subject to penalties under Labor Code 226(e) for incomplete or inaccurate wage statements; and
• Subject an employer to waiting time penalties under Labor Code 203 if not timely paid on employment termination.

Violations of Labor Code 203 must be “willful” and violations of Labor Code 226 must be “knowing and intentional” to trigger respective penalties. Thus, in theory, a company that can establish its management was unaware of breaks missed by production demands could defeat such claims.  In practice however, such claimed unawareness can be a tough sell against an employee’s assertions that work kept her or him from one or many full meal or rest periods.
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Take-Away:  Employers should:

• Issue California-compliant meal and rest break policies and encourage workers to take advantage;
• Adopt a protocol to obtain regular written confirmations of no such missed periods;
• Encourage employees to promptly report in writing any breaks missed;
• Document the resolution of such claimed missed periods, promptly paying the premium owing;
• Ensure payroll personnel, including any outside vendor, includes such premiums in pay stubs; and
• Ensure all unpaid break premiums are included in an employee’s final pay.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Please: Document Workplace Meal Breaks: Require Employees to Clock Out and Back In on Their Meals (June
• Square Meal Is The Deal: California Supreme Court Prohibits Meal Break Time Rounding (April 1, 2021)
• Required Meal Periods and Rest Breaks Revisited: Off-Duty Time During a California Work Day (April 12, 2018)

Helena Kobrin
June 3, 2022