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The Perils of California's 10 Minute Rest Break Law!

 

Who knew 10 minutes might be so costly?

 

 

The perils of California’s 10 minute rest break law!

By Ted Horton-Billard and Robert del Palacio

 

Imagine you’re a California business owner with a number of employees on the books working four (4) to eight (8) hours per day.  One particular employee’s performance has been lacking over a period of time and you appropriately dismiss the employee from his position. Months pass and you haven’t given the dismissal a second thought; that is until you are served with a lawsuit in which the former employee now claims he was never provided with his ten (10) minute rest breaks.  You read on and see the former employee is asking for a ridiculous sum in alleged unpaid wages and the penalties seem excessive, to say the least.

 

Whether the former employee’s claims are true or not, without proof the employee was, in fact, provided each and every one of his/her required ten (10) minute rest breaks, your business is at risk.  Seem too far-fetched?  Can’t happen to you? Then consider that lawsuits for unpaid wages have been steadily increasing since 2000.  These lawsuits have continued to grow since the Brinker case (see infra.).  And the numbers are nothing short of remarkable. 

                                                                                                                                                                                                                                                                                                                                                                    [1]

In 2012, a California Court, in a case captioned Brinker Restaurant Corp. v. Superior Court, sought to clarify the law regarding an employer’s responsibility to provide employees with appropriate rest periods.[2]  This, in turn, led to numerous lawsuits and settlements between employers and employees who had allegedly been deprived of meal and rest breaks. Settlements have been in the millions of dollars in favor of the employees[3] In the 2014 case of Gravina v. City of Los Angeles, the settlement totaled $26 million dollars.[4]  Got your attention yet?  Wait, it gets worse!

 

California law requires that rest periods be provided to employees as follows:

 

(1) One 10 minute rest period is provided for every 4 hours worked or major fraction thereof;

(2) The rest period begins once the employee arrives at the break area;

(3) The employer must relinquish control over the employee during the rest period; and

(4) The 10 minute break must be uninterrupted.[5]

 

As noted above, an employee is to receive a ten (10) minute rest period for “every four hours of work or major fraction thereof.”[6]  A “major fraction” is defined as anything more than two (2) hours of work.[7]  Accordingly, an employer is required to provide the following:

 

  • Employees who work less than 3.5 hours receive zero rest periods;
  • Employees who works 3.5 – 6 hours receives one rest period;
  • Employees who work 6 – 10 hours receives two rest periods; and
  • Employees who work 10 – 14 hours receives three rest periods.[8]

 

When an employee leaves the work area to take a rest period, the 10 minutes begins once the employee arrives at the break area.[9]  This rule has been established in order to ensure that employees receive the full ten (10) minute break and do not lose time traveling to and from the break area.[10]  

 

Once the employee has arrived at the break area, the employer is expected to relieve its employee of all duties and relinquished control over their activities.  One caveat here, employers are permitted to require the employee to remain on the work premises.[11]  While the employee is on his/her break, the rest period must remain uninterrupted for its entirety.[12]

So now here is where it starts getting scary.  It an employee claims any of these rules have been violated, that employee may make a claim against his/her employer going back as far as (3) three years.[13]  In other words, employees have up to three years to file a claim for recovery of unpaid wages due to an employer’s failure to provide appropriate rest periods.[14]

 

The financial consequences to a business can be devastating if the employer is unable to prove full compliance with the law.  For every workday an employee misses a rest period, the employee is owed one additional one (1) hour of pay at his/her regular hourly rate.[15]  Also, for every workday an employee misses a meal period, the employee is owed one (1) additional hour of pay at his/her regular hourly rate.[16]  This means an employee can collect two (2) hours of additional pay in a single day for missed rest and meal periods.[17]   These extra hours of work are called “premium pay.”[18]  These premium pay periods are considered wages earned by the employee.[19] 

 

For example, suppose an employee works full time for one year and earns an average income of $38,920 annually ($19.19 per hour) for 250 workdays (excludes weekends and 10 holidays).  If each day that employee was on the job he/she missed one or more rest periods, the employee has “earned” one additional hour of premium pay per day.  Thus, over the course of one year, that business would arguably be liable to that employee for $4,797.50 in premium pay for the unpaid wages.  Again, this is for a single employee over one year’s worth of work.  The number climbs to $14,392.50 for a period of three years.  And, the amount grows further as the number of employees making claims increases. 

 

Oh, and let’s not forget the penalties which may be imposed on the employer, in addition to the above premium wages due, for failing to comply with the law.  Like the unpaid wages, the penalties can be substantial too.  Consider the following:

 

California Division of Labor Standards Enforcement (Including Public Works)

FY 2014-2015 Results by Industry

 

 

Total Inspections

2,994

Total Citations Issued

2,488

 

 

 

 

 

Industry

Inspections

# of Citations

Penalties Assessed

Penalties Collected

Agriculture

234

99

$1,150,194.65

$413,618.62

Auto Repair

234

256

$3,343,571.37

$631,125.58

Car wash

260

318

$3,777,328.92

$493,488.89

Construction

527

357

$2,124,665.98

$713,064.98

Garment

128

151

$1,370,181.94

$147,798.13

Restaurant

502

528

$5,623,614.25

$1,546,119.32

Retail

150

135

$1,065,457.13

$368,712.52

Other 2

959

644

$13,589,059.83

$3,538,744.38

Subtotals

2,994

2,488

$32,044,074.07

$7,852,672.42

 

 

LESS citations dismissed/modified 3

<$13,016,351.36>

Subtotals

2,994

2,488

$19,027,722.71

$7,852,672.42

PLUS Public Works 4

2,006

479

$20,052,916.27 5

$4,247,453.74

 

 

 

 

 

TOTALS

5,000

2,967

$39,080,638.98

$12,100,126.16[20]

           

 

A California employer who fails to provide their employees with the appropriate rest periods is subject to a wage claim with (1) the state agency (California Labor Commissioner’s Office, Division of Labor Standards Enforcement (DSLE)) or a federal agency (U.S. Department of Labor, Wage and Hour Division enforcing the Fair Labor Standards Act), or a lawsuit in state or federal court.[21]  Generally, employees cannot pursue more than one form of relief and must decide which forum they choose.[22] 

 

Focusing on a claim with the DSLE, there are several benefits to this approach.  First, it can be less expensive and quicker than filing a lawsuit.  Second, the DSLE can require employers to produce documents as a court can in a lawsuit.  And third, the DLSE can require employers to pay the resulting penalties from the wage claim process as in a lawsuit.[23] The primary drawback of filing a claim with the DSLE is the employee generally cannot recover attorney fees for a wage claim with the DSLE which is sometimes possible in a lawsuit.[24]  Regardless of the forum the employee chooses for recovery, the employer may be subject additional penalties such as waiting time penalties, wage statement violation penalties, and penalties for violating payday laws.[25] 

 

But fear not, there is still hope for California employers.  That hope may be found in accurate, comprehensive and complete timekeeping records along with appropriate document retention policies.  No matter how big or small your business, if you have employees it is critical that your business always be ready to prove its full compliance with all wage and hour laws. 

 

A good start for smaller businesses is just using timesheets. An employee’s timesheet should reflect the number of hours worked along with all taken or missed rest periods.[26]  As such, appropriate timesheets should provide adequate space for the employee to acknowledge that rest periods were provided and taken (or missed, and why).  This serves dual purposes which protect employers from future litigation while also alerting management to an employee’s missed rest periods so further remedial action may be taken.

 

Larger businesses, with more employees, would be wise to consider technology based solutions for recording and maintaining accurate and complete timekeeping records. Such solutions offer easier retention and storage options too.  And, if your business is using a payroll service, many of the larger services offer technology based solutions which interface with their payroll software making recordkeeping a breeze. 

 

Another way employers may protect themselves against future wage and hour litigation is through the use of written policies and procedures.  Such policies and procedures should clearly and unequivocally inform employees that rest periods are provided and to be taken as per the number of hours worked in a day.  These established policies should be distributed to employees so they are aware of their responsibility to take rest periods when due and to promptly report any missed rest periods to their supervisor.   

 

Finally, employers should seek to protect themselves by providing their supervisors and managers with appropriate human resources training.  Their training should include the legal requirements for rest periods and the potential consequences of missed rest periods for the business.[27]  Periodic training should take place, as needed, to ensure company policies and all applicable laws are understood and being followed.  Documentation of such training should be maintained to demonstrate the business has sought to comply with all wage and hour laws.

 

Despite an employer’s best efforts, however, employees may still miss rest periods from time to time.  In order to effectively manage such contingencies, an employer should set up a separate line item on the paystub to document that the employee was paid the appropriate amount of money for that missed rest period.[28]  Although this places an additional financial burden on the business, it helps protect against future unpaid wage claims against the business.

 

Ultimately it boils down to this, wage and hour claims are dangerous, but avoidable when precautions are taken.  Employers have several ways to protect themselves against wage and hour claims.  First, be educated about all wage and hour laws. Second, maintain accurate and complete timekeeping records. Third, implement an appropriate records retention policy.  Fourth, use written policies and procedures to help educate employees and establish compliance.  And fifth, provide appropriate, documented training to your supervisors and managers.

 

And finally, when in doubt get professional help!  Wading through the minefields of employment law without the proper professional guidance is ill-advised, and frankly, much too risky an undertaking for any sane business person.  If you would like to learn more about this, or any other business and/or legal matters, please do not hesitate to contact our firm, THB Consulting Services, at www.thbconsultingservices.com and schedule a free consultation.      

 

[1] http://www.wagehourlitigation.com/overtime/another-year-another-high/

[2] Brinker Restaurant Corp. v. Superior Court, 273 P.3d 513 (Cal. 2012); Employer’s Responsibilities for Employee Meal Period Breaks, http://michellawyers.com/employers-responsibilities-for-employee-meal-period-breaks/

[3] http://www.nera.com/content/dam/nera/publications/2015/PUB_Wage_and_Hour_Settlements_0715.pdf, Figure 15

[4] Gravina v. City of Los Angeles, No. BC356014

[5] An Employer’s Guide to California Meal and Rest Break Requirements, http://www.constangy.com/communications-714.html; HR’s Record Keeping Obligations, http://www.barthattorneys.com/Publications/HRs-Record-Keeping-Obligations.aspx; Employer’s Responsibilities for Employee Meal Period Breaks, http://michellawyers.com/employers-responsibilities-for-employee-meal-period-breaks/

[6] Meal & Rest Break​s In California, https://www.calchamber.com/california-employment-law/Pages/meal-and-rest-breaks.asp

[7] HR’s Record Keeping Obligations, http://www.barthattorneys.com/Publications/HRs-Record-Keeping-Obligations.aspx

[8] An Employer’s Guide to California Meal and Rest Break Requirements, http://www.constangy.com/communications-714.html

[9] Meal and Rest Period Policies in California, https://www.calrest.org/staff/meal-and-rest-period-policies-california

[10] Id.

[11] Id.

[12] Id.

[13] HR’s Record Keeping Obligations, http://www.barthattorneys.com/Publications/HRs-Record-Keeping-Obligations.aspx

[14] Id.

[15] California Labor Code §226.7

[16] http://www.nolo.com/legal-encyclopedia/penalties-wage-violations-california.html

[17] Id.

[18] An Employer’s Guide to California Meal and Rest Break Requirements, http://www.constangy.com/communications-714.html

[19] HR’s Record Keeping Obligations, http://www.barthattorneys.com/Publications/HRs-Record-Keeping-Obligations.aspx

[20] https://www.dir.ca.gov/dlse/BOFE_LegReport2015.pdf

[21] https://www.worklawyers.net/how-to-file-wage-claim-california-dlse/

[22] Id.

[23] Id.

[24] Id.

[25] http://www.nolo.com/legal-encyclopedia/penalties-wage-violations-california.html

[26] HR’s Record Keeping Obligations, http://www.barthattorneys.com/Publications/HRs-Record-Keeping-Obligations.aspx

[27] An Employer’s Guide to California Meal and Rest Break Requirements, http://www.constangy.com/communications-714.html

[28] Id.

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