Rest periods must be separately compensated

Safeway paid its truck drivers on what it called a piece rate basis. Pay was based on (1) mileage rates that varied by number of miles driven, time of day, and location, (2) fixed rates for certain tasks, (3) an hourly rate for a predetermined amount of minutes for other tasks, and (4) an hourly rate for delays beyond the driver's control. Its collective bargaining agreement with the drivers' union provided for two rest periods for every eight or ten hour shift.

The California wage orders require employers to "authorize and permit" nonexempt employees to take a 10-minute rest period for every four hours worked. The rest periods "shall be counted as hours worked for which there shall be no deduction from wages." See section 12 of Wage Order No. 7-2001. Safeway authorized and permitted the drivers to take rest periods, and claimed that its compensation system included pay for the rest periods.

The Third District Court of Appeal in Sacramento ruled that Safeway's system violated the applicable wage order, and directed the trial court to certify a class action and determine the damages payable to the drivers. In a piece rate system, rest periods must be separately compensated. Bluford v. Safeway Stores, Inc., Case No. C066074 (May 8, 2013).

The Brinker Meal Period Decision

California Supreme Court

The California Supreme Court has handed down its long anticipated ruling in Brinker Restaurant Corp. v. Superior Court, Case No. S166350. Applying rules of construction and common sense, the Court ruled that employers need not force their employees to take a meal break:

"An employer's duty with respect to meal breaks under both [Labor Code] section 512, subdivision (a) and Wage Order No. 5 is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.  What will suffice may vary from industry to industry ... On the other hand, the employer is not obligated to police meal breaks and ensure no work thereafter is performed.  Bona fide relief from duty and the relinquishing of control satisfies the employer's obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay." The law requires a first meal period no later than the end of an employee's fifth hour of work, and a second meal period no later than the end of an employee's 10th hour of work.

The Court also put to rest any question there may have been about the separate rest period entitlement: "Employees are entitled to 10 minutes' rest for shifts from three and one-half to six hours in length, 20 minutes for shifts of more than six hours up to 10 hours, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on."

What does the decision mean for employers?

Because the Supreme Court has foreclosed the argument that the lack of a record of a meal period within the first five hours of employment automatically makes the employer liable for a meal period violation, the decision should limit the circumstances in which class action certification is appropriate for such claims. In the absence of an employer policy that violates the meal period, each individual employee would have to prove that he or she was prevented from taking a meal break. But, in the case before it, the Court did not rule out a class action, leaving it to the Superior Court to determine, in light of the conclusions reached in the decision, whether common issues predominated over individual ones.

Further, the Supreme Court's decision does not read the meal period requirement out of California law. Employers must still ensure that all their non-exempt employees are completely relieved of duty for 30 minutes by the end of the first five hours of work.

What should employers do?

Now that the Supreme Court has conclusively determined the extent of the employer's obligation with respect to meal periods, employers should review their policies and practices to make sure that they are in compliance.

1. Employers should make sure that all supervisors and managers are informed of the legal requirement recited in the Supreme Court's opinion, and that any violations will result in discipline.

2. Employers should review their employee handbooks to make sure that it informs employees of their right to 30 duty free minutes by the end of their fifth hour of work. The acknowledgment of receipt of the handbook should contain a separate initialed acknowledgment of the employer's policy to provide meal periods.

3. Employers should make sure that their timekeeping systems accurately record meal periods. Section 7 of the California wage orders requires employers to maintain accurate records of meal periods.

4. Employers should consider encouraging employees to take their meals away from the work location. This will avoid claims that an employee was not relieved of all duty because someone asked a work-related question, or requested performance of a work duty.

5. Employers should self-assess the one-hour of premium pay imposed by California Labor Code section 226.7, if they need an employee or group of employees to work without a meal period. Although the Labor Code and wage orders permit employees to give written waivers "when the nature of the work prevents an employee from being relieved of all duty," such waivers are revocable at the employee's option and may be subject to challenge for having been coerced.

Meal Or Rest Period Violation Premium

As a general rule, California employers must allow their employees two 10-minute rest periods and a 30-minute meal period during a regular work day. If the employer does not do so, under Labor Code section 226.7, it "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." A recent case against United Parcel Service decided that an employee may recover up to two premium payments per work day -- one for any meal period violation and one for any rest period violation.

In United Parcel Service, Inc. v Superior Court, No. B227190 (Feb. 16, 2011), UPS argued that the phrase "for each work day" meant that only one premium payment was due for any work day, no matter how many violations there were. The Second District Court of Appeal disagreed, holding that the phrase "meal or rest period" authorized an award of one premium payment per work day for any meal period violations, and an award of an additional premium payment per work day for any rest period violations. In a case brought by a single employee, the consequences of the ruling would be insignificant, an award of two hours of pay as opposed to one hour of pay. But, in a wage and hour class action, the numbers will add up.

The Court subsequently granted rehearing, and then issued a new opinion on June 2, 2011, adhering to its view that the Labor Code authorized one premium payment per work day for meal period violations, and another for rest period violations. The new opinion is available here.

To reduce liability, employers should monitor compliance with the meal and rest period rules. If a violation is discovered, the employer should consider self-assessing the premium payment. If it does not, any employees who do not receive their breaks will have four years within which to assert their claims, during which time interest will accrue. For any employee who quits or is fired, the employer will also be subject to additional waiting time penalties under Labor Code section 203 for not paying wages on time. That is because the California Supreme Court ruled in 2007 that premium pay under section 226.7 constitutes wages. See Murphy v. Kenneth Cole Productions, Inc., 40 Cal.4th 1094, 155 P.3d 284 (2007).