CalChamber Webinar: Avoiding Meal and Rest Break Traps

CalChamber

Led by:
Sarah Woolston, JD
Bianca Saad, JD
Matthew Roberts, JD

*Should not be taken as legal advice. Consult a qualified attorney about any matter of legal significance. Information current as of May 18, 2023.*

What is Premium Pay?

Additional pay given to an employee under specific circumstances. Triggered by meal and rest break infractions. Premium Pay falls under wages, not penalties, and must be included in wage statements. However, it does not trigger overtime.

Premium Pay is one additional hour of pay at the employees’ regular rate of pay. This is not just an employees’ hourly rate, but must include all forms of pay, in addition to: commissions, nondiscretionary bonuses, piece-work earnings, and values of meals & lodging.

Meal Breaks

• • If working more than 5 hours, a non-exempt employee must be given an unpaid, off-duty 30-minute meal break.
  • Meal break must start no later than the end of the 5^th hour of work, i.e., 4 hours and 59 minutes into their shift.
  • 2^nd meal break required if shift is longer than 10 hours.
• Employees must be free to leave the premises.
• Employees must be relieved of all duty (can’t be asked questions, can’t be on stand-by – absolutely no interruptions!)
• Employees should not be discouraged from leaving the premises or taking their meal break.
• Employers must relinquish control of employees’ activities.

Meal period FAQs: https://www.dir.ca.gov/dlse/faq_mealperiods.htm

Calculating Meal Break
For an employee starting at 8:00am, they need to take their meal break no later than 12:59pm.

Meal Break Waiver

• If an employee has a shift of 6 hours or less, they can waive their meal break.
• Mutual consent between employee and employer.
• Waiver is revocable; employee can cancel the meal break waiver.

Meal Waiver – 2^nd Meal

Employee can waive, but not if the 1st meal was waived.
Same guidelines as 1^st meal waiver apply.

It is best to have a waiver in writing. While it’s not necessary to do it daily, it’s best to have a waiver on file for every waived meal period.

• Written waivers are recommended over waivers on a time clock. The argument could be made the employee checked it off accidentally, didn’t know what it meant, or was even coerced when on a time clock.
• Meal waivers can be agreed to upon hiring but can be argued against.
  • Quarterly waivers acceptable, but daily or for every meal waived, better.
• Waivers can be verbal, but again, it is best to have in writing.

On-Duty Meal Breaks
There are some instances where on-duty meal breaks are allowed and do not need a meal waiver.

They are only allowed if:

• The nature of work prevents employees from being relieved.
• Both employee & employer agree in writing.
• Meal break is paid.
• Employee can revoke on-duty meal break agreement at any time in writing.

There are Industry exceptions and wage orders should be reviewed. https://www.dir.ca.gov/iwc/wageorderindustries.htm

Rest Breaks
Rest breaks are required when employees work more than 3 ½ hours.

10 minutes “net” rest time for every 4 hours.

• Should be in the middle of each work period. One break on either side of meal break.
  • Cannot combine rest breaks!
• Break is paid and off duty.
• Employer must relinquish control and relieve employee of all duties.
• Employee cannot remain “on call,” even if they don’t perform any work.
• Rest break cannot be waived.
• Rest break begins once the employee reaches an area appropriate to rest.
  • If an employee needs to travel to a particular place, like a break room, the rest break doesn’t start until they reach that location.
• Some wage orders allow employers to require employees to remain on premises. Consult your wage orders and legal counsel. However, if not in your wage orders, it is unlawful to have a policy requiring employees to remain on premises

Piece-Rate and Commissioned Employees

• Must be compensated separately for rest breaks.
• Piece-rate employees should be paid whichever is higher – employee’s average hourly rate or the applicable minimum wage (whichever is higher from local or state)
• Commissioned employees must be paid at least minimum wage.
• Consult legal counsel.

Consult wage orders for Industry exceptions.

Important to demonstrate employee is taking rest break.

• Good to add onto time sheet.

Policies and Practices

Policy
Important to draft a compliant meal and rest break policy that has a starting point and carries weight. Its significance should be stressed.

It should:

• Require employees to timely take all meal and rest breaks.
• Prohibit employees from working during those meal and rest breaks.
• Stress importance of accurately completing timecards.
• Make sure they know to report any errors to their supervisor or HR.

Categories/Topics to consider including in a policy:

• Specific rules regarding meal and rest breaks
• # of breaks authorized
• Timing and length of breaks
• How to record breaks
• Rules for remote and traveling workers
• Discipline policy for failing to follow policies
  • Employers still need to pay premium wage even if employees fail to follow policy.
  • Include disciplinary measures for:
    • Simply failing to abide by the meal and rest breaks policy.
    • Falsifying, destroying, modifying or removing/replacing timecards.
    • Late or early recording of breaks
    • Recording another employee’s breaks
  • Disciplinary measures would also apply to supervisors.

Policy should be included in employee handbook or as a standalone policy.

• Have employees sign an acknowledgement.

Practices

• Considering scheduling specific meal and rest breaks for employees, especially remote workers.
  • There is software available that can notify/remind employees.
• Require employees to notify supervisor/HR if they did not receive a compliant meal or rest break, as well as the cause of the violation.
• Discipline employees that do not abide by the policy.
  • Employers still need to pay premium wage when violation occurs.
• Periodically remind employees of policy.

Do Not Round Meal Breaks!

• You cannot have a policy that allows “rounding” for any meal breaks.
  • Example: Employee punches out at 11:04am and punches back in at 11:28am. Timekeeping system rounds to the nearest 10^th minute, thus 11:04am becomes 11:00am and 11:28am becomes 11:30am, creating the appearance of a 30-minute meal break. This is unlawful.

Supervisor Training

• Educate supervisors on their obligations:
  • Providing meal and rest breaks; not discouraging employees from taking their allotted breaks
  • Not interrupting meal and rest breaks
  • Not rounding times on timesheets
• Train supervisors on how to effectively enforce policies.
• Train supervisors to maintain accurate records.
• Discipline supervisors who fail to enforce policies and break them.

Important to find out what is causing an employee to not follow policy and take the needed steps to resolve it. But, if they are able to take timely meal and rest breaks and just didn’t, possible disciplinary action include verbal warnings and write-ups.

Be consistent!
Issues are usually resolved after a few warnings. Employees will realize employer is serious about policy and won’t want to jeopardize their employment.

Remember, no matter the cause, once a violation occurs, premium pay is triggered and must be paid.

Recordkeeping

• Timekeeping records are the first piece of evidence the courts and Labor Commission review to determine if a violation occurred.
• Maintain accurate records for meals; consider tracking rest breaks as well.
• Require employees to complete and verify timecards, including start & end times of meal breaks.
• Ensure records accurately reflect meal period start and end times. Remember, no rounding.
• Review timecards for violations.
• Premium pay must be included on wage statements for any violations to show compliance.

Affirmation Statement
Employers should consider adding an “affirmation statement” to timecards for employee to verify:

• They accurately recorded their breaks;
• They had the opportunity to take their breaks, or
• They did not have the opportunity to take all their breaks.

This signed affirmation statement confirming the accuracy of time records does not automatically absolve the employer of any liability for unpaid time, but it helps employer show they did their job to provide employee their required breaks, however, the employee did not do so or failed to follow policy.

A working lunch is not a compliant meal break, even if employer pays for lunch.

Premium Pay

Premium Pay is owed to an employee if a meal or rest break is missed.

Maximum amount owed in one day is 2 hours of premium pay.

• 1 hour for a missed meal break (whether 1 or 2 breaks)
• 1 hour for a missed rest break (whether 1 or 2 breaks)

Not always just an employee’s hourly rate of pay.

• Hours paid, but not worked are not included (i.e., vacation, sick leave)
• Must include all forms of pay in addition to hourly earnings:
  • Commissions
  • Nondiscretionary bonuses
  • Piece-work earnings
  • Value of meals and lodgings

Premium pay is a wage, not a penalty, and must be included in wage statement.

• Does not trigger overtime pay.

Make sure to include premium pay in the same pay period the meal & rest break violations occurred.

• Failure to pay timely can result in waiting time penalties.

Premium pay is owed if the employer:

• Doesn’t relieve employee of all duties;
• Doesn’t relinquish control of employees’ activities;
• Doesn’t allow employee a reasonable opportunity to take an uninterrupted 30-min meal break;
• Doesn’t allow employee to take their 10-min rest break(s); or
• Impedes or discourages employees from taking meal/rest breaks.

Meal break violations include:

• Not providing a break at all;
• Providing a late break – after the 5^th or 10^th hour worked; or
• Providing a short break (less than 30 mins).

If an employee misses a meal break or takes a short break, they must be paid for all hours worked, including any overtime, PLUS the premium pay owed for the violation.

If the employer provides a “bona fide relief from duty” and “relinquished control,” while also did not discourage or coerce the employee from taking a meal break, and the employee freely chooses to continue working, then the employer is not liable for a meal period violation and premium pay is not owed.

• However, proving this can be challenging. Employer should consider whether to pay the premium and discipline employee instead.
• If the employer knows that the employee continues to work during their meal period, they still owe compensation for the time worked.