Is Your Employer Paying You Properly for Missed Meal and Rest Breaks? Only If it Includes Nondiscretionary Pay in Your Regular Rate of Compensation.

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The California Supreme Court has clarified that employers must include both hourly wages and all nondiscretionary payments when calculating the regular rate of pay for the purposes of compensating employees for missed meal and rest periods. See Ferra v. Loews Hollywood Hotel, LLC (2021) 11 Cal.5th 858. The Court further held that this decision applies retroactively. Read on to see whether your employer might have been paying you the wrong rate for your missed meal and rest periods.

In Ferra, the issue was whether the defendant had properly calculated the amount of pay that was owed to employees who did not receive proper meal or rest periods. Under California law, when an employer does not provide an employee with a meal or rest period, as required by law, the employer must pay the employee one additional hour of pay “at the employee’s regular rate of compensation.” See Cal Lab. Code § 226.7(c). Loews Hollywood Hotel interpreted that phrase narrowly, and paid its employees for missed meal and rest periods according to their base hourly rate. It did not include any “nondiscretionary pay” in that calculation.

On review, the California Supreme Court noted that “nondiscretionary pay” included pay that was owed to an employee pursuant to a contract, agreement, or promise, so long as it was not determined at the sole discretion of the employer. In other words, where certain types of pay must be made in a certain amount if the employee accomplishes certain things, they are nondiscretionary under the law. Typically, nondiscretionary pay includes payments for meeting certain goals, such as attendance, timeliness, or productivity.

The Court then considered the history of Section 226.7, and concluded that “regular rate of pay” in that statute had the same meaning as the term “regular rate of pay” in Section 510(a). Accordingly, it includes not only hourly pay but also any nondiscretionary payments for work performed by the employee. This is consistent with the general proposition that California’s labor laws are to be liberally construed in favor of workers. See, e.g., Alvarado v. Dart Container Corp. (2018) 4 Cal.5th 542. 562.

Do you receive any type of nondiscretionary payments above and beyond your hourly rate, such as attendance or productivity bonuses? If so, your employer may be failing to pay you properly for your missed meal and rest periods. Please feel free to call the experienced attorneys at Hunter Pyle Law to find out if you may have a case. We can be reached at (510) 444-4400 or at inquire@hunterpylelaw.com.

Truck Drivers Lose California Meal and Rest Breaks under Federal Court Ruling

Our country’s economy is built on the backs of truck drivers, whose demanding trips keep them on the road and away from their families while allowing Americans to receive goods from across the world in a matter of days. In spite of this service they provide, truck drivers engaged in interstate commerce do not enjoy all of the rights and protections afforded to other workers. For instance, truck drivers are generally not entitled to overtime. And after a recent decision from the Ninth Circuit, California truck drivers will now also be denied the meal and rest periods guaranteed to other employees under California law.

 

Meal and Rest Breaks: Federal Law v. California Law

 

In 2011, the Federal Motor Carrier Safety Administration (“FMCSA”) revised its federal hours-of-service regulations to require most drivers of property-carrying commercial motor vehicles working more than eight hours to take one 30-minute break during the first eight hours of a shift. Drivers had flexibility, though, in determining when that break would occur.

 

These federal regulations were far less generous to drivers than California law, which provides for multiple meal and rest periods each shift, and which penalizes employers who fail to provide these shifts to their employees.

 

California’s Wage Order 9-2001, which applies to “all persons employed in the transportation industry,” guarantees employees working than five hours a day a “meal period of not less than 30 minutes.” Employees are entitled to a second meal break of not less than 30 minutes when working more than 10 hours in a day.

 

Wage Order 9-2001 also guarantees California transportation industry employees to 10-minute rest breaks for every four hours worked throughout the day. “[I]nsofar as practicable [these breaks] shall be in the middle of each work period.”

 

Finally, employers who fail to provide a meal or rest break must pay the employee one additional hour of pay at the employee’s regular rate of compensation for each day the meal or rest period is not provided.

 

International Brotherhood of Teamsters, Local 2785 v FMCSA

In 2018, at the behest of trucking industry groups, the FMCSA considered whether California’s meal and rest break laws were preempted by the FMCSA’s federal hours-of-service regulations. The FMCSA had previously determined in 2008 that they were not.

 

This time, however, the agency concluded that federal law preempted California’s meal and rest break laws. The FMCSA determined that because the California rules generally required employers to grant commercial truck drivers more breaks, at greater frequency, they were more stringent than federal law and “caused an unreasonable burden on interstate commerce.” The California Labor Commissioner challenged this determination.

 

On January 15, 2021, the Ninth Circuit upheld the FMCSA’s determination that California’s meal and rest break laws were preempted by the federal hours-of-service regulations. International Brotherhood of Teamsters, Local 2785 v. Federal Motor Carrier Safety Administration, — F.3d —- , 2021 WL 139728 (9th Cir. 2021).

 

The Ninth Circuit determined the FMCSA had express authority from Congress to make preemption determinations and that its decision was not arbitrary and capricious. The Court pointed to a factual record that showed that the California rules negatively impacted the efficient operation of interstate logistics and resulted in lost productivity.

 

Takeaway

As a result of the Ninth Circuit’s decision in International Brotherhood of Teamsters, Local 2785, truck drivers are unable to enjoy the same meal and rest break protections that California law affords to other employees.

 

This is a blow to truck drivers everywhere, since, as the Ninth Circuit noted, 50% of the nation’s total container-cargo volume enter this country through California’s three major ports. However, drivers should keep on eye on the FMCSA during the Biden administration, as it’s possible the agency may choose to revisit its decision on California meal and rest breaks.

My Company Owes Me Wages.  Can I Sue My Boss Individually For Them?

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In California, employees can sue certain individuals for money that their employers owe them.  But a recent decision by the California Supreme Court limits the avenues for that type of recovery.

First, the good news:  California Labor Code section 558.1 allows “person[s] acting on behalf of an employer” to be held liable as the employer for violating any provision regulating minimum wages or hours and days of work in any of the Industrial Welfare Commission wage orders.  This section also applies to the following Labor Code sections:  203 (failure to pay wages due at the time of termination); 226 (failure to provide proper wage statements); 226.7 (failure to provide meal and rest breaks); 1193.6 (failure to pay minimum wage); 1194 (failure to pay minimum wage) and 2802 (failure to reimburse for business expenses). (more…)

Which Wage and Hour Laws Apply to California Public Employees?

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Wage and hour laws require that employers pay minimum wages and overtime wages, provide meal and rest breaks, and pay all wages immediately upon termination of employment, among many other things. Public employees often wonder whether they are covered by these laws, or whether such basic protections do not apply to them.  The answer in California, in true lawyerly fashion, is, “it depends.”  This post will attempt to sort out which wage and hour laws apply to public employees and which, unfortunately, do not. (more…)

Court Holds that Teachers at a Jewish Synagogue are not Exempt from Employment Laws under the Ministerial Exception

Employment laws provide workers with important protections, such as minimum and overtime wages, the right to be free from harassment or discrimination, and workers’ compensation. In certain situations, these laws conflict with The United States Constitution’s prohibition against governmental interference with the free exercise of religion. Specifically, the “ministerial exception” exempts individuals that are classified as “ministers” from various employment laws.

In Su v. Temple, 2nd Appellate Dist., Case No. B275426 (filed March 8, 2019) (“Su”), an appellate court analyzed whether the ministerial exception exempted preschool teachers, employed by a Jewish synagogue, from wage and hour laws.

Facts of the Case

In Su, the Plaintiff was a preschool teacher employed by defendant, Stephen S. Wise Temple (“Temple”). The Temple is a Reform Jewish synagogue that operated an on-site preschool and employed approximately 40 preschool teachers.

The Temple’s preschool program contained both secular and religious components. For the secular component, preschool teachers spent time engaging students in activities, such as games, books, science, and the promotion of reading, writing, and math readiness. Teachers also developed students’ social skills, assisted with toilet use, and supervised meals and snacks.

The religious component introduced students to Jewish life, religious ritual, and Judaic observance. The preschool teachers taught religious concepts, celebrated Jewish holidays, observed weekly Shabbat, and introduced students to Jewish values. The preschool’s purpose was to create a positive sense of Jewish identity and develop favorable attitudes towards Judaism.

The teachers were not required to follow the Temple’s philosophy or practice the Jewish faith. Furthermore, the teachers were not required to have theological training, be educated about Judaism, or be proficient in Hebrew. Last, the teachers were not ordained as religious leaders and did not hold themselves out as ministers of the faith.

The Temple did not require the preschool teachers to undergo theological study. Any guidance related to the practice of Judaism was provided by the Temple’s rabbis or administrators trained in Jewish education. The Temple provided the teachers with reading materials that included explanations of Jewish holidays, symbols, and Hebrew vocabulary.

Procedural History

In September 2013, the California Labor Commissioner brought an action on behalf of the preschool teachers against the Temple for various wage and hour violations, including failure to provide meal and rest breaks, and failure to pay overtime. The Temple filed a motion for summary judgment and asserted that the teachers were exempt from wage and hour laws due to the “ministerial exception” articulated by the United States Supreme Court in Hosanna-Tabor Evangelical v. E.E.O.C. (2012) 565 U.S. 171 (“Hosanna-Tabor”).

The trial court granted summary judgment and concluded that the preschool teachers were ministers under the ministerial exception. It reasoned that the exception is not limited to heads of religious congregations because prior cases recognized that teachers could serve ministerial functions. The Labor Commissioner appealed the trial court’s ruling.

Appellate Court’s Ruling

On appeal, the Second District Court of Appeal analyzed the preschool teachers’ circumstances under the Hosanna-Tabor factors and held that the teachers were not ministers.

To explain its ruling, the appellate court described the purpose of the ministerial exception. In Hosanna-Tabor the defendant, a church, fired a teacher who threatened to initiate a lawsuit for disability discrimination. The church claimed that the teacher was not suitable for carrying out its message, because her threat of legal action violated a core belief that disputes should be resolved internally. After her termination, the teacher filed a complaint with the Equal Employment Opportunity Commission (“EEOC”). This led to the EEOC suing the church for employment discrimination.

As a defense, the church argued that a law forcing a religious group to retain an unwanted messenger of the faith is governmental interference with the free exercise of religion. The United States Supreme Court held that the teacher qualified as a minister under the ministerial exception because she was someone “whose functions are essential to the independence of…[a] religious group.” Hosanna-Tabor, supra, 565 U.S. at p. 200. To reach this conclusion, the United States Supreme Court identified the following factors:

The appellate court analyzed the preschool teachers’ circumstances under the Hosanna-Tabor factors. After doing so, the appellate court reached the following conclusions. First, the Temple did not identify the preschool teachers as ministers. The teachers were not required to practice the Jewish faith, given a religious title, or recognized as spiritual leaders.

Second, the Temple did not require the preschool teachers to attend formal Jewish training or education. In contrast, the plaintiff in Hosanna-Tabor was required to take college-level courses on faith-based subjects and pass an oral examination administered by a faculty committee.

Third, none of the preschool teachers identified themselves as ministers. The plaintiff in Hosanna-Tabor held herself out as a minister by “accepting the formal call to religious service” and claiming housing allowances were only available to those employed in the exercise of the ministry.

Under the fourth factor, the appellate court found that the preschool teachers’ duties reflected a role in conveying the Temple’s message and carrying out its mission. The teachers were responsible for implementing religious curriculum, such as teaching Jewish rituals, values, leading children in prayers, celebrating Jewish holidays, and participating in weekly Shabbat services. Thus, they served a role in transmitting Jewish religion and practice to future generations.

Based on an analysis of the aforementioned factors, the appellate court held that the ministerial exception did not apply to the Temple’s preschool teachers. Therefore, the teachers were not exempt from wage and hour laws.

Conclusion

After reaching its conclusion, the appellate court emphasized an important point regarding the ministerial exception. The factors articulated in Hosanna-Tabor are not a rigid formula for determining the application of the ministerial exception. The analysis is based on a totality of whether an employee is sufficiently central to a religious institution’s mission to require exemption from generally applicable employment laws.

If you have questions about whether you are protected by to California or federal employment laws, please feel to contact Hunter Pyle Law at (510) 444-4400 or inquire@hunterpylelaw.com.

 

On-Call Rest Periods Not Permitted in California

California’s Wage Orders provide as follows:

Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof. However, a rest period need not be authorized for employees whose total daily work time is less than three and one-half (31/2) hours. Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages.

The Wage Orders require employers to pay the employee for one (1) hour of pay at the employee’s regular rate of compensation for each workday that the rest period is not provided and for an additional hour of pay at the employee’s regular rate of compensation for each workday that a meal period is not provided.  See also California Labor Code Section 226.7.

In a recent case addressing an employer’s obligation to relieve its employees of all duties during a rest period, the California Supreme Court held that “employers must relieve their employees of all duties and relinquish any control over how employees spend their break time.”  Augustus v. ABM Sec. Servs., Inc. (Mar. 15, 2017) 2 Cal.5th 257, 260.  The Court clarified that an employers’ obligation to relieve an employee of all duties applied not only to meal periods, but also to rest periods.  Id. at 265.  (more…)

Rest Periods Must be Separately Compensated for Commissioned Employees

In Vaquero v. Stoneledge Furniture LLC (Feb. 28, 2017, B269657) __ Cal.App.4th __ (“Slip Op.”), the Court of Appeal explained that an employer’s obligation to separately compensate employees for rest periods extends to employees who are paid on a commission basis. This decision is in accord with other Court of Appeal decisions that require employers to separately compensate rest periods for employees who are paid on a piece-rate basis. (See Bluford v. Safeway Stores, Inc. (2013) 216 Cal.App.4th 864; Gonzalez v. Downtown L.A. Motors, LP (2013) 215 Cal.App.4th 36; see also Labor Code § 226.2.)

In Vaquero, the court analyzed IWC Wage Order No. 7, which applies to the Mercantile Industry, including retail and wholesale salespeople. Section 12 of Wage Order No. 7 says that employees must receive 10 minutes of rest time for every four hours worked, or major fraction thereof, which must be counted as hours worked for which there shall be no deduction from wages.

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Rest Period Pay and Overtime Premiums for Piece-Rate Workers

A complicated and developing area of California wage and hour law involves how to calculate wages and premium pay for piece-rate workers. In this post, we will explain the calculations for rest period wages and overtime premiums for piece-rate workers.

Many California workers are compensated on what is known as a “piece-rate” basis. Piece-rate means that a worker’s pay is based on a specific amount paid for completing a particular task or making a particular piece of goods. This could include truck drivers who are paid based on the number or type of loads delivered, factory workers who are paid based on the number of widgets completed, or construction workers, such as plumbers or electricians, who are paid based on the number of installations they do.

Even though piece-rate workers are not paid by the hour, they are still entitled to the protections provided by the California Labor Code. These protections include overtime premium pay for more than eight hours of work in a day or 40 hours in a week, meal periods before the end of fifth hour of work, separate compensation for required rest periods, and wage statements showing, among other things, the number of pieces completed, the applicable piece rates, and overtime and rest period pay.

But if someone is paid by the piece, how is their hourly wage calculated for the purpose of determining the amount of wages for paid rest periods and overtime premiums?

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Can California Employers Combine Rest Breaks into One Break?

One common source of PAGA penalties occurs when employers fail to authorize and permit the rest breaks that are required under California law.   When this happens, workers can recover one hour of pay at their regular hourly rate for each day they are deprived of one or more rest breaks.  They can also seek penalties under PAGA, as well as their attorney’s fees.

A recent decision by the Second District of the California Court of Appeal clarifies the timing of rest breaks, and whether rest breaks can be combined into a single break.  Rodriguez v. E.M.E., Inc. (2016) 246 Cal.App.4th 1027 involved a class action brought by workers who paint metal parts manufactured in machine shops.  The workers worked eight hour shifts, so they were entitled to two ten minute rest breaks.  EME, the employer, required the workers to take their two rest breaks in one combined break that lasted 20 minutes.

The court looked closely at the language of Wage Order No. 1-2001, which provides as follows:

Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period.

The court also considered the holding in the seminal case of Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004.  There, the California Supreme Court held that employers could deviate from the preferred course of providing rest breaks in the middle of each work period “where practical considerations render in infeasible.”  The Rodriguez court also noted this critical language from Brinker:

As a general matter, one rest break should fall on either side of the meal break.  Shorter or longer shifts and other factors may alter this general rule.

Id. at 1032.

One of the critical questions resolved by Rodriguez is what the phrase “insofar as practicable” means.  The court interpreted that phrase narrowly, holding that an employer could depart from the preferred schedule only where it could meet two requirements:

  1. Departing from the preferred schedule of two rest breaks, with one on either side of the meal break, would not unduly affect employee welfare; and
  2. The departure is tailored to alleviate a material burden that would otherwise be imposed on the employer.

The court then turned to the evidence submitted by the parties.  If found that a single declaration submitted by the plaintiff was sufficient to defeat the employer’s motion for summary judgment.  This was somewhat surprising, given that the employer had submitted a large amount of evidence in support of its motion.

The court then turned to the question of whether the term “work period” meant the two work periods that fall on either side of the meal break under the preferred schedule, or something else.  The defendant, along with various employer-side legal organizations, argued that the term “work period” means the entire shift, and that an employer’s only obligation was to ensure that during the entire shift, the meal and rest breaks divide the shift into approximately equal work periods.

The court rejected the defendant’s argument.  Instead, it held that in an eight hour shift with a single meal break, the preferred schedule requires the provision of two rest breaks, with one in the middle of each of the work periods that fall either side of the meal break.

Last, the court considered the issue of under what circumstances an employer can combine two or more rest breaks into one longer rest break.  The court noted only one situation where that type of combination was permissible:  when an employer’s business requires shifts in which the meal break must be taken soon after the workers start their shifts.  (One example of this type of situation might be in a restaurant where the waitstaff eat their meals before the rush of customers makes it impossible to take breaks.)

Rodriguez thus establishes that employers that choose to depart from the standard meal and rest break schedule must be two relative stringent requirements.  Otherwise they will face significant liability under California’s wage and hour laws.

If you have questions about the meal or rest breaks at work, please feel free to contact Hunter Pyle Law for a free consultation.  We can be reached at inquire@hunterpylelaw.com or 510.444.4400.

The Timing of Rest Breaks: Before or After Meal Breaks, and Can a Company Combine Breaks into One Long Break?

Two questions have bedevilled practitioners representing workers in California ever since the California Supreme Court issued Brinker Restaurant Corp. v. Superior Court in 2012:  In a shift that qualifies for two rest breaks and one meal break, are employers required to provide one rest break before the meal break Gear-and-Gavel_dark-blueand the other one after?  And, on a related note, can an employer combine multiple rest breaks into one long rest break?

In Rodriguez v. E.M.E., Inc. (April 22, 2016), the employees worked eight hour shifts.  The defendant provided them with one meal break and one 20 minute rest break that fell either before or after the meal break.  The Second District Court of Appeal used this scenario to provide some critical guidance with respect to when and how employers must schedule rest breaks. (more…)