All Employers with CA Employees
May 23, 2022
Contact HR On-Call
In Naranjo v. Spectrum Security Services, Inc., the California Supreme Court stated that meal and rest premiums can be the basis for waiting time penalties and inaccurate wage statements. Meal and rest premiums are required to be paid when nonexempt employees do not take the statutorily required meal or rest periods. The Court stated that meal and rest premiums are wages, and therefore subject to derivative wage and hour claims.
There, an employee claimed the employer failed to provide the required meal and rest periods, subjecting the employer to pay meal and rest premiums. As part of his claim, the employee sought waiting time penalties for failure to pay the premiums and wage statement violations for failing to properly identify wages earned.
The Court reasoned that the premiums are intended to provide compensation for the missed meal or rest period as a legal remedy, and wages for the work the employee performed during the meal or rest period. Further, the Court confirmed prior precedent that wage statements must include wages earned, not just wages actually paid. Having identified the premiums as wages, the Court then linked payment deficiencies to remedies for failure to pay or properly document the earnings.
Notably, the Court reinforced its prior ruling in Murphy v. Kenneth Cole Productions, Inc., stating that meal and rest premiums are akin to overtime premiums. The portion of Murphy that excludes meal and rest premiums from the regular rate of pay seemingly remains intact. Employers should review this ruling with legal counsel for guidance on how it may impact their business.
- Separately list meal and rest premiums on wage statements.
- Consider adding an acknowledgment that employees have received premium pay.
- Evaluate timekeeping and payroll practices to ensure meal and rest premiums are accounted for.
- Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2022 ManagEase