California 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 that 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.