As you probably know, California law requires employers to provide meal and rest periods to employees. For each work day in which a meal or rest period is not provided, the employer is required to pay one additional hour of pay at the employee’s regular hourly rate. While not terribly burdensome in isolation, the cost to employers for missed meal and rest periods can skyrocket if a class action lawsuit is brought on behalf of a significant number of employees who claim they were denied meal and rest periods over a long period of time.

Employer Requirements For Providing Meal And Rest Periods
Until recently, the law was unclear as to whether these payments were considered wages or penalties. The distinction is important because, if considered penalties, employees may only seek compensation for one year of missed meal and rest periods. If considered wages, employees may seek compensation for three years. The California Supreme Court recently ruled that such payments are considered wages, thus allowing employees to seek compensation for three years of lost meal and rest periods.

Pursuant to Division of Labor Standards Enforcement (DLSE) regulations, employees are entitled to an unpaid 30-minute, duty-free meal period after working for five hours, and a paid 10-minute rest period for each four hours of work. Furthermore, it is the responsibility of employers to actively ensure that employees are taking their required meal and rest periods, and are not working through them. Based on the potential liability regarding meal and rest periods, employers must not only actively ensure breaks are taken, but should keep accurate time records for all employees. In fact, employers are required to keep all time records, including records of meal periods, for a minimum of three years.

Payments For Missed Meals And Rest Periods Are Considered Wages And Subject To A Three Year Statute Of Limitations
In Murphy v. Kenneth Cole Productions Inc., the plaintiff was a store manager in a Kenneth Cole Productions retail clothing store. Murphy’s primary responsibilities were to make sales, receive or transfer products, process markdowns, and clean. Often, Murphy would eat lunch while continuing to work. Murphy regularly worked nine to ten hour days in which he was only able to take an uninterrupted, duty-free meal period once every two weeks. Murphy resigned after approximately two years of work. Subsequently, he filed a wage claim with the California Labor Commissioner for unpaid overtime and waiting time penalties, claiming that he was improperly classified as an exempt employee.

The Labor Commissioner issued a decision in Murphy’s favor. Murphy then asserted additional claims for lost meal and rest periods. The trial court ruled that the payments for meal and rest periods were wages and thus applied the three-year statute of limitations. The Court of Appeal reversed the decision, reasoning that the payments were penalties and thus subject to the one year statute of limitations. However, the California Supreme Court agreed with the trial court that payments for lost meal and rest periods were considered wages with a corresponding three-year period to bring such claims. The Court reasoned that the statute’s plain language, administrative and legislative history, and the purpose of the remedy all pointed to the conclusion that the additional hour of pay constituted a wage and not a penalty.

The Court compared payments for lost meal and rest periods to payments for overtime, and suggested that such payments have a dual-purpose remedy. The primary purpose of payments for missed meal and rest periods is to compensate employees. The secondary purpose is to serve as an incentive for employers to comply with labor standards. Since the main purpose of such payments is to compensate employees, the money should be defined as wages and is thus subject to the three year statute of limitations. Moreover, the Court explained that because employers are required to keep all time records for a minimum of three years, employers should have the appropriate evidence to defend against missed meal and rest period claims.

What This Means For You
The best defense against potential missed meal and rest period lawsuits is to proactively ensure that employees take the appropriate meal and rest breaks. Additionally, it is essential that employers keep detailed time records for their employees, including meals taken, for a minimum of three years. These preventative measures may discourage employees from filing such lawsuits altogether and, at the least, will allow you to defend yourself if such a lawsuit occurs.