Give 'em a Break:
Why Employers Must Reassess Meal and Rest Period Policies
Following Murphy v. Kenneth Cole
By Roger M. Mason, Esq. & Christopher J. Olson,
Esq.
The California Labor Code provides that all employers,
no matter how small, must provide unpaid meal periods
and paid rest breaks in accordance with the applicable
Industrial Welfare Commission Wage Order. Under
Industrial Welfare Commission Wage Order No. 4-2001, an
employee must receive one thirty (30) minute meal break
for lunch if their work period is more than five hours,
and one ten (10) minute rest break per four hours of work.
Labor Code §226.7 states that an employer may not
require an employee to work during a meal or rest period. In
the event that an employee works through a meal period,
this time will be considered an "on duty" period
and counted as time worked. An “on duty” meal
period is only permissible when the nature of the work
prevents an employee from being relieved of all duties
and both the employer and employee agree to an "on
duty" meal period in writing.
Moreover, Labor Code §226.7 provides that an employee
is entitled to one additional hour of pay for each violation
of the Industrial Welfare Commission Wage Order, i.e.,
each day when a rest or meal period is not provided.
The Division of Labor Standards Enforcement has recognized
a critical distinction between an employer’s duties
with respect to meal and rest periods. An employer
has an affirmative responsibility to ensure that workers
are actually relieved of all duties, are not performing
work, and are free to leave the employer’s premises
during their meal period. On the other hand, an
employer will not incur liability under Labor Code §226.7
as long as it authorizes and permits its employees to
take a rest break, regardless of whether they actually
do so.
Unpaid meal and rest periods have become the subject
of numerous lawsuits, including large class actions. Due
to the severe punishment for these violations, these lawsuits
can mean huge financial losses for employers.
A key way the legislature limits the potentially unmitigated
costs defendants can face in litigation is by enacting
a statute of limitation for a particular cause of action
(legal claim). Statutes of limitation bar claimants
from filing a lawsuit after a certain period of time has
passed since the alleged wrongful conduct. For example,
the statute of limitations for breach of a written contract
is four (4) years. Thus, a plaintiff must file a
lawsuit within four years of the date of the breach; otherwise
the action is time-barred.
Labor Code violations are often ongoing. In these
cases, the fact that a plaintiff filed a lawsuit within
the applicable statute of limitations does not open the
door for the plaintiff to allege violations for an unlimited
period of time. The applicable statute of limitations
will limit a plaintiff’s allegations to a certain
time period. For example, the statute
of limitations for failure to pay overtime wages is three
(3) years. If a plaintiff filed a lawsuit against
his employer for failure to pay overtime wages in April
2007, he or she could only recover for unpaid overtime
from April 2004 to present, regardless of how far back
the overtime violations go.
Allegations of failure to provide meal and rest periods
are another example of potentially ongoing violations
that are limited by a statute of limitations. Prior
to the California Supreme Court’s decision in Murphy
v. Kenneth Cole, 40 Cal. 4th 1094 (2007), courts
and attorneys alike interpreted the remedy for violations
of Labor Code §226.7 to be a penalty subject to a
one-year statute of limitations (C.C.P. §340). However,
in Murphy v. Kenneth Cole, decided on April 16,
2007, the Court ruled that the "additional hour
of pay" constituted a wage or premium pay, subject
to the three-year statute of limitations that covers
payment of wages (CCP §338).
The Court further held that those wage claims can be
brought for the first time at trial, even if they had
not been raised before the Labor Commissioner.
Suffice it to say, the additional two years now applicable
under the wage and premium pay statute of limitations
provided for in Murphy v. Kenneth Cole will significantly
increase damages available to plaintiffs who bring claims
of meal and rest period violations and will severely impact
settlement negotiations.Now is the time to review your
policy on meal and rest breaks and take preventative measures
to ensure compliance with the Labor Code and avoid costly
litigation down the road.
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