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New ruling clarifies payment calculations for missed meal and rest breaks in California

On Behalf of | Aug 26, 2021 | Wage & Hour Law

In California, workers are generally entitled to compensation for non-compliant meal and rest breaks. That means, if your employer fails to provide you with required meal and rest breaks that are free of work duties, you are entitled to compensation for those missed breaks.

However, there has been debate about the legal language used to calculate compensation for missed breaks. Recently, the California Supreme Court clarified how that pay should be calculated.

Pay for missed breaks may be based on more than hourly wages

In the case of Ferra v. Loews Hollywood Hotel, LLC, the California Supreme Court ruled that, to compensate for non-compliant meal and rest breaks, employers must pay workers based on their “regular rate of compensation.” Specifically, the Court clarified that the “regular rate of compensation” is not necessarily the hourly wage alone. The Court defined the regular rate of compensation as the sum of a worker’s hourly wages, plus other payments, such as bonus incentives. The plaintiff in the case filed a class action lawsuit alleging that her employer failed to take into account a quarterly bonus when calculating her payments for missed meal and rest breaks. The California Supreme Court agreed.

The ruling applies retroactively

Although the ruling was made on July 15, it can be applied to other wage and hour law violations that occurred before this date. Therefore, companies may need to provide additional compensation to their employees to avoid being subject to legal action. Furthermore, employees may want to keep an eye on their paychecks to ensure that they are being compensated properly in future pay periods. A California employment law attorney can help you determine if your employer is in compliance with the Court’s ruling.

Keep in mind also that the problem might not be isolated and that other employees may be affected. Please see our overview of employment class actions to learn more.

If you have not been compensated properly by your employer, you may have grounds for legal action against the company. In the event that your claim is successful, you may receive significant back pay and other forms of financial compensation. Pay stubs, tax returns or other documents may be used to show that you were not paid for all the hours that you worked during a given week, month or year.