California Supreme Court Decision Related to Meal and Rest Period Premium Calculations
Last week, in Ferra v. Loews Hollywood Hotel, LLC, the California Supreme Court held that meal and rest period premiums must be paid at the “regular rate of pay,” rather than the employee’s base rate of pay. Meal and rest break premiums are the hour of penalty pay which employers have to pay when an employee does not receive a full rest or meal period as required by law. An employee’s regular rate of pay encompasses hourly earnings, salary, piecework earnings, commissions, non-discretionary bonuses, etcetera, and it is typically used to calculate overtime rates. Employers should check their practices to ensure that they are calculating meal period premiums, rest break premiums, and overtime using the regular rate of pay. For more information on regular rate of pay, we’ve included a link to the Department of Industrial Relations’ FAQs here.
Please note that this decision applies retroactively. We understand that this can be troubling, so if you have any questions, please reach out to the experts at Young, Cohen & Durrett, LLP at (916) 569-1700.
IMPORTANT REMINDER about State-Mandated Employer Retirement Plans for Almost All Employers
In 2016, the California Legislature passed a law requiring employers with five or more employees to offer a retirement plan to their employees, whether that be a company retirement plan or the newly created state-run program. The state-run program is called CalSavers, and employers can use it at no cost. Though this law became effective in 2020, the deadline before penalties can start being assessed got pushed back to June 2022 for businesses with between five and 49 employees. We just wanted to remind employers to make sure they are compliant with this law. For more information, check out the CalSavers website here. If you have questions about this law or how to meet its requirements, reach out to the experts at Young, Cohen & Durrett, LLP at (916) 569-1700.