Important Disclaimer

March 2006

Are California Employers Personally Liable For Meal and Rest Break Violations?
Prepared By: Melissa C. Marsh

In 2006, there have been major developments in California regarding meal and rest period laws and the remedies afforded to employees. Pursuant to California Labor Code §§ 512(a) and 226.7, an employer must provide a 30-minute meal break to employees who work more than five hours per day and a second 30-minute meal break to those working more than ten hours per day. The California Industrial Welfare Commission also requires a ten minute rest break every four hours or fraction thereof worked. But now it appears that the courts cannot agree whether employees have only one year or up to four years to seek compensation for missed meal and rest breaks. In 2006, three separate California appellate courts have weighed in on the issue, each with differing opinions.

California Labor Code § 226.7(b) provides that "no employer shall require any employee to work during any meal or rest period" required by law and that if an employer fails to provide either the required meal or rest break, the employer "shall pay the employee one additional hour of pay at the employee's regular rate of compensation for each work day that the meal or rest period is not provided." The courts, however, cannot seem to agree whether the one hour remedy should be considered a penalty or a wage. This distinction is important because if characterized as a "wage" the employee may sue for up to four years of payments; however, if characterized as a "penalty", the employee may only sue for up to one year of payments.

The split of opinion began in December of 2005 with the First District Court of Appeal's decision in Murphy v. Kenneth Cole (2005) 134 Cal.App.4th 728 and the Second District Court of Appeal's decision in Mills v. Superior Court (Bed, Bath & Beyond) (2006) 06 C.D.O.S. 837, in which the Appellate Courts held that Labor Code § 226.7(b) one hour pay remedy is a "penalty" pursuant to which the employee may only sue for up to one year. In other words, an employee's claim of meal and rest break violations must be raised within one year of the violation. The clear split of opinion occurred when the Fourth District Court of Appeal disagreed. In National Steel and Shipbuilding Co. (NASSCO) v. Superior Court, 06 C.D.O.S. 636, the court held that the additional hour of pay remedy is a "penalty against the employer in the form of a wage to the employee" and is consequently subject to a three year statute of limitation. In other words, an employee's claim of meal and rest break violations must be raised within three years of the violation thus entitling the employee to seek up to three years of payments. The Forth District Appellate Court in National Steel and Shipbuilding Co. additionally held that such an aggrieved employee may also claim and recover restitution under California Business & Professions Code § 17203 which provides for a four year statute of limitation. Consequently, the decision in National Steel and Shipbuilding Co. effectively expands the potential liability of California employers to four years.

On February 22, 2006, the California Supreme Court granted review in Murphy v. Kenneth Cole Productions, Inc., 134 Cal. App.4th 728 which should dispense with the conflict and provide a definitive ruling on the extent of California employers' liability for meal and rest break violations. Until we know whether a claim under Labor Code § 226.7 is governed by a one or three year statute of limitations, California employers should advise all employees of their right to meal and rest breaks, train supervisors to make sure their employees take the mandatory 30 minute meal breaks and 10 minute rest breaks, and maintain all employee time records for a minimum of four years.

© Melissa C. Marsh 2006 All Rights Reserved.

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