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Premium Payments Calculated Like Overtime, California Supreme Court Says—and Retroactively
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CA Supreme Court Rules Employers to Recalculate Wages After Bonuses
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Last week, in
Donohue v. AMN Services, LLC, the California Supreme Court handed down a very important, if unsurprising, decision regarding wage and hour class actions. There are three critically important takeaways for employers:
An employer
cannot round employee meal period punches only exact time will work, as any non-compliance (even as minor as one minute) will trigger liability to pay a meal period premium.
Rounding the start time of an employee’s shift is also functionally prohibited because of the potential that it will result in an employee starting his or her meal period after the end of the fifth hour, resulting in a violation of section 512 of the Labor Code and the applicable IWC Wage Orders.
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Update February 10, 2021: This blog has been updated to reflect current guidance about California meal and rest break laws.
On September 26, 2019, California’s Second District Court of Appeals in
Gustavo Naranjo, et al. v. Spectrum Security Services, Inc. held that unpaid premium wages for meal break violations do not entitle employees to additional remedies under the California Labor Code for inaccurate wage statements or waiting time penalties.
By limiting employees’ ability to bring derivative inaccurate wage statement and unpaid wage claims, the decision immediately decreases employers’ overall exposure for Labor Code penalties, class counsel’s attorneys’ fees, and civil penalties under the Private Attorneys General Act (PAGA).