Augustus v. ABM Security Services

coffee breakCalifornia Labor Code section 226.7 provides that employees are entitled to receive premium wages in the form of one additional hour of pay at the employee’s regular rate of pay for a missed meal or rest break.

An employee who works more than three and one-half hours per day must be permitted to take a paid 10-minute rest period — during which the employee shall not be required “to work” — per every four hours of work or major fraction thereof.  An employee who works at least five hours must also be given a 30-minute unpaid meal break, during which the employee must be “relieved of all duty” if the meal period is not to be counted as time worked.

As the California Supreme Court recognized in Augustus v. ABM Security Services (2016), employers how cannot provide the required meal or rest breaks to employees have various options to comply with the law.  The Court stated:

Several options nonetheless remain available to employers who find it especially burdensome to relieve their employees of all duties during rest periods — including the duty to remain on call. Employers may (a) provide employees with another rest period to replace one that was interrupted, or (b) pay the premium pay set forth in Wage Order 4, subdivision 12(B) and section 226.7. (See Brinker, supra, 53 Cal.4th at p. 1039.)

As recognized by the Supreme Court, employers may consider voluntarily paying premium wages when it is questionable if an employee did not receive a compliant break or if they in fact missed the break.  Here are five issues employers should understand about the option of paying premium pay voluntarily1.

1. Employers potentially only owe two premium pay hours for each day worked.

The court in United Parcel Service, Inc. v. Superior Court (2011) concluded that the employer is liable up to two hours of premium wages – one hour for a missed meal break and one hour for a missed rest break – per day.  Even if the employee missed two rest breaks and one meal break in one day of work, the employee would only be entitled to one hour of premium pay for the missed rest breaks, and one hour of pay for the missed meal break, for a total of two hours of premium pay for that day.

2. Voluntarily making premium payments establishes that employer has effective open door policy.

By paying premium pay to employees who are not able to take breaks or complain that they have not been able to take breaks establishes that the company has an effective complaint procedure employees should utilize when any problems arise.  This presents an effective argument against any claims by employees after-the-fact that they were unable to take their breaks, and assert claims against the employer well after their employment ended.

3. Voluntary payment reduces potential liability.

The premium pay mentioned above is the penalty that is provided to the employee if they miss any of their required breaks.  Therefore, if the employer voluntarily pays the premium when the employee did not receive proper breaks, this will reduce the total potential liability owed to employees if sued.

4. Establishes that employer understands its legal obligations.

In making premium payments to employees who are arguably not able to take meal and or a rest break, establishes to any governmental agency or a plaintiff’s counsel that the company understands it obligations under the law and treats the obligations seriously.

5. If paid, it should be listed separately on employees’ paystubs to record payments.

It goes without saying that if the employer is taking this affirmative step, it needs to record the payments in a manner that makes it clear to the employee that the premium pay is being paid when breaks are missed.  In addition, the employer needs to have a record to establish all premium paid that could possibly be asserted by an employee has been paid out.

In speaking to a few groups of California employers this week, a common question kept coming up about what are the essential Booksemployment policies California employers must have?  While there are more than five, this week’s Friday’s Five starts with what I consider to be critical policies that every California must have in place.

1. At-will policy

Under California law, it is presumed that all employment is terminable at-will. California Labor Code section 2922 provides: “An employment, having no specified term, may be terminated at the will of either party on notice to the other.” The at-will doctrine means that the employment relationship can be terminated by either party at any time, with or without cause, and with or without advanced notice. There are some major exceptions to this rule, but generally California law recognizes that employers and employees may, at any time, and for any legal reason, terminate the employment relationship.

2. Anti-harassment, discrimination and retaliation policy

California’s Fair Employment and Housing Council published new regulations pertaining to anti-discrimination and anti-harassment requirements effective April 1, 2016.  Employers need to review and potentially update their policies in order to meet the new requirements.  The full text of the regulations can be obtained here.

3. Timekeeping policy

California law requires employers to track start and stop times for hourly, non-exempt employees. The law also requires employer to track the start and stop times for the employee’s thirty minute meal periods. The time system needs to be accurate, and the employer needs to be involved in the installation and setup of the system. Do not simply use the default settings for the hardware and software. Understand what the system is tracking and how it is recording the data. Since the statute of limitations for California wage and hour violations can extent back four years, it is recommended that employers take steps to keep these records at least four years.  Employers should also have a complaint procedure in place and regularly communicate the policy to employees in order to establish an effective way to remedy any issues.

4. Meal and rest break policy

As I’ve written about many times previously, employers must have a compliant meal and rest break policy.  Indeed, given the California Supreme Court’s ruling in Augustus v. ABM Security Services in December 2016, employers should review their rest beak policy to ensure it complies with this ruling.

5. Paid sick leave policy

Many local governments in Southern California have passed laws increasing the minimum wage and amount of paid sick leave that must be provided to employees.  Employers must ensure they are complying with the law that provides the most benefits to employees.  Here is a brief summary of some of the local laws in Southern California:

State/City Minimum Wage Paid Sick Leave
1) California $10/hr January 1, 2016; $10.50 January 1, 2017; $11/hr January 1, 2018; $12/hr January 1, 2019; $13/hr January 1, 2020; $14/hr January 1, 2021; $15/hr January 2022* Current: 3 days or 24 hours
2) Los Angeles – City (click here for more information about Los Angeles City’s minimum wage and paid sick leave laws) July 1, 2016: $10.50/hr; July 1, 2017 $12; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00 * (click here for more information about Los Angeles’s minimum wage ordinance) July 1, 2016: 48 hours*
3) Los Angeles – County (applies to unincorporated cities in LA County) Same as LA City (see above) No specific requirement – state law applies
4) San Diego City July 2016: $10.50 (date not set yet – likely effective in first half of July 2016); January 1, 2017 $11.50; January 1, 2019 $11.82; January 1, 2020 $12.15; January 1, 2021 $12.49; January 1, 2022 $12.84 5 paid sick days
5) Santa Monica (click here for Santa Monica’s website for details of the law) $10.50 July 1, 2016; July 1, 2017 $12.00; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00* January 1, 2017: 32 hours for small businesses, 40 hours for large businesses; January 1, 2018: 40 hours for small business, 72 hours for large businesses*
*Employers with 25 or fewer employees the implementation is delayed one year.

Happy Memorial day weekend!

Welcome to another Friday’s Five video.  In this video I discuss five things every California employer needs to know about meal and rest breaks.  The items consists of a some reminders, but also new court decisions issued in December 2016 and the first quarter of 2017.  This is always a topic employers need to continually pay attention to in California.

Here are links to articles I’ve published as referenced in the video:
Timing requirements for meal and rest breaks

Rest break requirements when employees still subject to recall by employer

Commissioned and piece rate employees must be compensated separately for rest breaks

Happy Friday.  As always, please let me know if you have any suggestions for topics for future posts.

Quick video on the five things California employers need to pay attention to in 2017.

(Sorry for the wind noise in the video.)

I briefly discuss the following five issues:

1) Augustus v. ABM Security Services: A new California Supreme Court decision about whether rest breaks during which security guards were required to monitor a pager for a call actually counts as a rest break under California law.  Short answer: No.  The Court held that the guards had to be completely relieved of all duties during the rest break.  I’ll write more about this decision in the coming weeks.

2) Local ordinances banning criminal history inquiries, such as Los Angeles’ new prohibitions staring in 2017.

3) Local paid sick leave requirements (such as San Diego and Los Angeles).

4) Local minimum wage ordinances.

5) Arbitration agreements and class action waivers.

Happy holidays!