California Supreme Court Decides Break Period Premiums Are Wages

By: JML Law | May 10, 2022.
California Supreme Court Decides Break Period Premiums Are Wages

Employees in California are, in many ways, relatively fortunate when compared to workers in other states. California lawmakers routinely prioritize the rights of employees. While some employers believe this to be unfair, at JML Law, we believe protecting workers is essential. Thus, we are always pleased to learn of new developments that stand to benefit California’s workforce to an even greater extent in the future.

One such development involves a recent decision the California Supreme Court issued in the case of Naranjo et al. v. Spectrum Security Services, Inc. Although this decision was only issued a few short weeks before this blog is being published, there is strong reason to believe that it will yield significant long-term benefits for workers throughout the state.

Understanding Unpaid Wage Penalties in California

In virtually all states, if an employer fails to pay employees wages they have earned, said employees can enlist the help of an attorney to recover the wages that have not been sufficiently paid.

California takes this principle a step further. For example, if an employer fails to pay wages in California, the affected employee might not merely recover their unpaid wages, but also additional compensation in the form of penalties. An employer may have to specifically pay “waiting time” penalties and “wage statement” penalties. Wage statement penalties are incurred by employers when failure to pay employees wages they have earned results in said employee’s pay stubs being inaccurate.

Understanding Meal & Rest Break Premiums in California

California law also requires that employers provide workers with meal break periods and rest breaks. During these breaks, employees must not be required to perform any work-related tasks. If an employer fails to provide such breaks, they must pay a penalty known as a premium.

Historically, premiums paid to employees when breaks have been denied have not been legally considered to qualify as wages. That means they did not need to be included on pay stubs. More significantly, as far as employers were concerned, it meant that the penalties related to unpaid wages mentioned above would not be triggered if premiums were not paid in a timely manner or if they were not included in employee pay statements. The California Supreme Court’s recent decision should change that.

How the Recent California Supreme Court Decision Affects Break Period Premiums

Per the California Supreme Court’s decision in Naranjo et al. v. Spectrum Security Services, Inc., going forward, premiums for break periods that have not been provided to employees will be considered wages. Again, as a result, penalties associated with unpaid wages and inaccurate pay reporting will apply to unpaid premiums and premiums that are not accurately reported on pay stubs.

Because this is a new development, it’s likely some employers will not immediately comply with the change. Contact a Los Angeles employment law attorney at JML Law if you believe your employer deserves to be penalized for non-compliance. These issues are complicated, and you need proper legal representation to maximize your odds of recovering any compensation for which you may be eligible. Learn more about what we can do for you by contacting us online to schedule your free consultation.

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