Tamara L. Harper
Hoefflin & Associates, ALC

The current state of the law is unclear in an already complex area regarding meal breaks and rest periods for the California employer.  In looking to the recent federal court caseⁱ, there is even more confusion as it conflicts with California statutory law.  While Federal law is shifting in favor of the employer, California law has swung the pendulum towards the employee. 

The United States District Court for the Northern District of California in 2007 refused to hold that employers must ensure its employees take meal and rest breaks and reasoned that the employer must simply offer the meal breaks and the law should not force employers to actively ensure employees are taking their breaksⁱⁱ.  This ruling shifts the burden to the employee to not only show that he or she was not taking meal breaks regardless of the reason, but to establish that he or she was forced to forego his or her meal breaks.

The federal court continued in 2008 to reject plaintiff class certification and claims that Labor Code §512 and applicable wage orders mandate that employers ensure meal breaks are actually taken.ⁱⁱⁱ  The Brown court reasoned that the word, “provide” in Labor Code §512 did not “suggest any obligation to ensure that employees take advantage of what is made available to them.^iv”

The statute of limitations has now been increased in California for an employee to assert a claim against an employer for the failure to provide meal breaks and rest periods since the one additional hour of pay for missed meal and rest break periods has been classified as a wage or premium pay^v.  The failure of the employer to provide these breaks and rest periods can carry substantial liability for the payment to back wages and penalties owed to employees. 

The California Supreme Court has accepted review of the recent appellate decision in this area and will most likely set forth a set of guidelines or factors that employers can follow to aid in the navigation through the rolling surf of meal breaks and rest periods^vi.  Prior California law mandated that an employer must ensure that employees are taking their meal breaks and rest periods and imposed certain obligations and restrictions for each.  The prudent course of action recommended by counsel was to have the employee certify each time card submitted by signing a statement that they acknowledged and agreed that they were provided and took their meal and rest break periods.  If a period was missed, the employer was instructed to pay the one hour wage penalty in the same pay period.  This frequently was the only defense to a labor board claim or wage and hour litigation, as most employers do not keep evidence of clocked time in and clocked time out for meal break and rest break periods.

The Appellate Court has recently determined that an employer simply must provide and allow the meal breaks and rest periods^vii.  The Brinker court followed the reasoning of the Starbucks and Brown court that the California meal period obligations are imposed upon the employer so as to disallow an employer from forcing employees to work through meal breaks and not ensure the breaks are actually taken, but simply made available.  This case effectively changes the Labor Board’s conclusion in employment audits and hearings that employers have an affirmative obligation to ensure workers are relieved of all duty during meal and rest breaks. 

The Brinker court distinguishes the facts before it from cases in which the employer knew that employees were not taking meal and rest periods; did nothing to address the situation which deprived workers from their breaks; had no policy for meal breaks; and required employees to be on call at all times.^viii

The Brinker court made several favorable rulings for a California employer.  Under its holdings, an employer need only authorize and permit meal and rest break periods, each individual employee situation is unique and must be evaluated on a case by case basis, and class certification is denied.  This ruling precluded the plaintiffs from moving forward as a class since the purported meal and rest break violations were unique to each particular employee’s situation.  The Brinker case was accepted for review by the California Supreme Court in August 2008 and has not yet been set for hearing on its docket.

The determination in California that must be made by an employer is whether or not it must ensure the employee is taking the meal and rest break period time, or must provide and allow the opportunity.  The conflict of the cases, Labor Code, and Wage Orders, require each employer to specifically interpret the language of Labor Code §512 and the Wage Orders applicable to it.  The query then turns upon how to record such events; how long to keep such records in light of the extension of the time period for an employee to sue an employer (one year to three years); and what documentation can an employer provide to defend itself against employee claims for the failure to provide meal breaks and rest periods.

If the Supreme Court holds that the employer’s burden is lessened to a standard that it simply must be shown that meal and rest break periods were provided and allowed and holds to the strict interpretation of Labor Code §512, as the Brinker Court did, the defenses to such employee litigation or wage and hour law board complaints are broadened.  An employee manual with policies and procedures regarding meal and rest break periods will be key to a successful defense.  An employer who routinely sets forth a schedule of meal and rest break periods may provide further defense to show that the meal and rest break periods were afforded to the employees.

Until the California Supreme Court hears the Brinker case, and sets forth a test for employers to follow, there are strategies that can be implemented immediately to limit risk and exposure to employee labor lawsuits.

Until California law is clear, employers with employees in California need to make sure employees take meal and rest breaks.  One way to ensure such is to pre-print the following statement upon on all timecards, “I hereby certify that I have taken all meal and rest breaks for the above pay period.”

Employers cannot impede, discourage or dissuade employees from taking rest or meal break periods.  It is the employer’s responsibility to track employee’s work hours and to maintain all records, even if using an outside payroll or administrative agency.  If it is learned that an employee has not been afforded the opportunity to take the meal break or rest break period, it is recommended that within the same pay period, the employee be paid a penalty wage in the amount of one hour at their regular hourly wage rate and record such upon their paycheck. 

The key to a successful defense against an employee’s labor board claim or wage and hour litigation is to document thoroughly and contemporaneously.  If a meal or rest break period is missed and an employer pays the penalty for such within the same payroll period as part of a self audit process, have the employee sign for receipt of the paycheck and acknowledge the payment of the penalty.  Timecards are vital to an employment litigation defense.  An employer cannot rely upon an outsourcing payroll company to ensure its compliance.  Not only do most outsourced payroll company contracts contain disclaimers that they are not able to give legal advice, they will not defend the employer in a lawsuit, and most importantly, they will not be the employer named in a lawsuit nor audited by the Department of Labor or Department of Labor Standards Enforcement.  An employer must take its own action to ensure the company and its assets are protected from liability.

It is ultimately the employer’s responsibility to ensure that it is in compliance with California law and that any vendors that it may use for payroll reporting is also in compliance as it relates to their employees.  It is the employer who bears the ultimate responsibility and liability.

Policies regarding meal periods and rest periods for non-exempt employees are regulated by state wage and hour laws. An employer’s handbook should briefly describe applicable meal and rest period policies.  An employee may waive their thirty minute meal period for every five hours of work if the day's work will be completed in no more than six hours, provided the employer and the employee mutually consent.  When working no more than twelve hours in a workday, employees may also waive the second of two thirty minute meal periods if the first meal period was taken. Employees may revoke on-duty meal agreements at any time.  In California, employers generally do not need to pay employees for meal periods of thirty minutes or longer.  

California law requires employers to grant a ten minute rest period for every four hours of work in a day or major fraction thereof.  Since employees are paid for rest periods, employers are able to impose greater restrictions on employee activity during breaks than during meal periods.  For example while employees must be free to leave the work premises for meal break periods, an employer may disallow leaving the work premises for rest break periods.
California employers must provide at least a thirty minute unpaid lunch break to employees who work more than five hours per day, and two – ten minute rest breaks to employees working between six to ten hours per day. Employees working more or less hours in a day are subject to the rest period rules as defined with the Industrial Welfare Commission orders.  Each employer should not only be familiar with, but also is required to post the Industrial Welfare Commission (IWC) Wage Orders for their industry or trade.  California IWC Wage Orders can be downloaded and printed by employers at no cost via the internet^ix. 

Employees must be free of duties and free to leave worksite for lunch break.  An employee who eats in the break room, but must get up to greet customers, continue to answer the phones or sign for mail deliveries, is not free to leave the worksite.  The employer would be obligated to pay a one hour penalty for each missed break period or meal period in this scenario.  If it is a regular practice or policy to have employees take their meal period in the kitchen or break room and continue any work duties or require training during this period of time, an employer is subjecting itself to a class action by all of its employees. 

An employer should perform frequent self audits of payroll practices and distribute an updated Employment Manual to all employees annually.  In the event that it is determined an employee did not take a meal or rest break, the employer must pay one additional hour of pay at the regular rate to the employee as a penalty for each workday the employer does not provide the meal break.  Additionally, it is a misdemeanor to not allow the lunch break.

In order to minimize potential liability and preserve and protect company assets, employers should conduct ongoing self audits to ensure the following procedures and policies are in place: establish and communicate clear policies to employees regarding meals and rest periods; train supervisors to make sure employees get all meal and rest periods that the law and applicable IWC Wage Orders require; require all employees to record meal and rest breaks on their time sheets or other time records; inform employees that failure to record breaks will result in disciplinary action; pay any penalty for a missed meal and rest period in the payroll period in which it occurred to assure adequate record keeping; properly classify employees as exempt or non-exempt; keep time sheets and other time and payroll records on file for a minimum of four years; and periodically audit meal and rest break practices, overtime policies and practices, and time clock, time card and payroll practices.

Tamara L. Harper advises and defends companies in employment/labor compliance, formation, corporate regulation, commercial leasing, business sale and acquisition, capitalization, and intellectual property rights in order to provide peace of mind to business entrepreneurs who desire to protect their assets, ideas, and wealth.  She frequently counsels companies and writes articles showing how to limit liability exposure, register and defend intellectual property, and hold property in trust.

© 2009 Tamara L. Harper
Tamara L. Harper, Esq,
Hoefflin & Associates,
A Law Corporation
2659 Townsgate Road, Suite 232
Westlake Village, California 91361
805-497-8605
tharper@hoefflinlaw.com