September 17, 2021

Volume XI, Number 260

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September 16, 2021

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September 15, 2021

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September 14, 2021

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California Employers Must Pay Meal and Rest Break Premiums at a Higher Rate Than the Base Hourly Rate

On July 15, 2021, the Supreme Court of California issued a long-awaited decision in Ferra v. Loews Hollywood Hotel, LLC. The Court reversed the trial and appellate court holdings and concluded that California employers must pay meal and rest break premiums at the employee’s higher, blended regular rate rather than the base hourly rate.

Compensation that must be factored into the “regular rate” includes all nondiscretionary payments, such as piecework earnings, commissions, nondiscretionary bonuses, salary and hourly earnings. Other types of payments that are excluded from the regular rate of pay include discretionary bonuses, expense reimbursements, payments for periods of non-work (e.g., vacation, illness) and gifts for special occasions.

The Court’s ruling is a stark departure from existing rulings on this issue—including the October 9, 2019, appellate court ruling, which held that meal and rest break premiums should be paid at the lower base hourly rate. Additionally, and importantly, the Court ruled that this decision does apply retroactively.

California employers with non-exempt employees should review their payroll settings to confirm the rate at which they are currently paying meal and rest breaks and make proper adjustments if needed.

© 2021 McDermott Will & EmeryNational Law Review, Volume XI, Number 197
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About this Author

Christopher A. Braham Attorney Employment Litigation McDermott Will Emery Los Angeles
Partner

Christopher A. Braham focuses his practice on employment litigation and counseling.

Christopher represents employers in all stages of employment litigation, including in putative class action, single and multi-plaintiff lawsuits concerning claims for meal and rest period violations, failure to pay wages and bonuses, off-the-clock work, misclassification, discrimination, retaliation, wrongful termination and misappropriation of trade secrets. Christopher advocates for clients in state and federal courts and administrative agencies, including in...

310-788-6008
Partner

Yesenia M. Gallegos focuses her labor and employment practice on a wide range of matters, including restrictive covenants, wage and hour law, discrimination and harassment claims, executive employment agreements, leaves of absence, employee terminations and reductions in force. Yesenia represents employers in employment litigation—including class actions—pending in both state and federal court. She also represents employers in actions against former employees in trade-secret and embezzlement actions that require immediate restraining orders, injunctions and/or liens.

310-788-4199
Elvira Kras Attorney Litigation McDermott Will Emery Los Angeles
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A litigator with a depth of trial experience, Elvira focuses her practice on employment and traditional labor matters. She prosecutes and defends trade secret, whistleblower and restrictive covenant claims, advocates for management in disputes before the National Labor Relations Board and in collective bargaining negotiations and obtains favorable results for clients faced with wage and hour class and representative actions as well as harassment, discrimination and retaliation lawsuits.

Drawing on the lessons learned from her litigation practice...

310-788-4102
Maria Rodriguez Employment Lawyer McDermott Will Emery Law Firm
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Maria C. Rodriguez advises US and international corporations with regard to employment law compliance and mergers and acquisitions; and defends employment cases and class action litigation. She is a trusted advisor to clients helping them avoid or resolve disputes and protect resources through proactive and strategic planning. She is experienced working with clients in the sports, media and entertainment, technology, food and restaurant, airline, transportation and distribution, health care and fashion industries.

 

She advises on and defends against class, collective,...

310-788-1586
Michelle S. Strowhiro
Partner

Michelle S. Strowhiro is an employment advisor and litigator. She provides trusted counsel to US and international companies on all aspects of employment law compliance. Michelle partners with clients to establish and maintain their strong and lawful employment policies and practices; manage their employee relationships from hire to termination; conduct workplace investigations; administer leaves and other workplace accommodations; and resolve disputes. She provides manager and employee trainings on management and sexual harassment. She regularly prepares and negotiates...

310-788-1571
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