On July 15, 2021, in Ferra v. Loews Hollywood Hotel, LLC, the California Supreme Court held that, when an employer is obligated to pay a meal or rest period premium for failing to provide a compliant meal or rest period, that premium must be paid at the “regular rate of pay,” as that term of art is generally used for overtime purposes, rather than the employee’s base rate of pay. The “regular rate of pay” generally takes into account all nondiscretionary forms of wages, including hourly pay, shift differentials, piece-rate, commissions and incentive/production bonuses, among other forms.
 
In reliance on a number of federal decisions, many employers in California have understandably paid these meal or rest period premiums based on employees’ base rates of pay. The California Supreme Court has now made clear that such a practice does not comply with the Labor Code.

Leave a Reply

Your email address will not be published.