©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 307 employer’s argument that Augustus implied on-premises rest periods were legal as “more persuasive and accurate” than employee’s argument to the contrary). 283 Lab. Code § 226.7(a). 284 Lab. Code § 226.7(b). 285 Lab. Code § 226.7(d). 286 AB 2605, 2018 bill adding Lab. Code § 226.75. This urgency bill took effect immediately upon Governor Brown’s signing of the bill into law on September 20, 2018, and was set to expire January 1, 2021. AB 2605 was a direct response to Augustus v. ABM Security Services. 287 AB 2479, 2020 bill extending, past January 1, 2021 and until January 1, 2026, the exemption in Labor Code § 226.75 that applies to rest periods for specified employees who hold safety-sensitive positions at petroleum facilities, to the extent they must carry and monitor communication devices and respond to emergencies, or remain on the employer’s premises to monitor the premises and respond to emergencies. 288 AB 1512, 2020 bill amending Lab. Code § 226.7 to create, till January 1, 2027, a rest-break exemption for the security industry. The employer must be a registered private patrol operator and the affected security officer employees must be registered under the Private Security Services Act. A later, uninterrupted rest period would qualify as a compliant rest period. If a security officer cannot take an uninterrupted rest period of at least 10 minutes for every four hours worked (or major fraction thereof), the officer must be paid one additional hour of pay at the base hourly rate. AB 1512, like AB 2605, was a direct response to Augustus v. ABM Security Services. Labor Code section 226.7(f) now provides: “(1) An employee employed in the security services industry as a security officer who is registered pursuant to the Private Security Services Act (Chapter 11.5 (commencing with Section 7580) of Division 3 of the Business and Professions Code) and who is employed by a private patrol operator registered pursuant to that chapter, may be required to remain on the premises during rest periods and to remain on call, and carry and monitor a communication device during rest periods. If a security officer’s rest period is interrupted, the security officer shall be permitted to restart the rest period anew as soon as practicable. The security officer’s employer satisfies that rest period obligation if the security officer is then able to take an uninterrupted rest period. If on any workday a security officer is not permitted to take an uninterrupted rest period of at least 10 minutes for every four hours worked or major fraction thereof, then the security officer shall be paid one additional hour of pay at the employee’s regular base hourly rate of compensation. “(2) For purposes of this subdivision, the term “interrupted” means any time a security officer is called upon to return to performing the active duties of the security officer’s post prior to completing the rest period, and does not include simply being on the premises, remaining on call and alert, monitoring a radio or other communication device, or all of these actions. “(3) This subdivision only applies to an employee specified in paragraph (1) if both of the following conditions are satisfied: “(A) The employee is covered by a valid collective bargaining agreement. “(B) The valid collective bargaining agreement expressly provides for the wages, hours of work, and working conditions of employees, and expressly provides for rest periods for those employees, final and binding arbitration of disputes concerning application of its rest period provisions, premium wage rates for all overtime hours worked, and a regular hourly rate of pay of not less than one dollar more than the state minimum wage rate.” 289 Thurman v. Bayshore Transit Mgmt., Inc., 203 Cal. App. 4th 1112, 1152-53 (2012) (section 558 sets forth civil penalties for denied rest breaks); Brewer v. Premier Golf Props., LP, 168 Cal. App. 4th 1243, 1253-54 (2008) (section 558 establishes civil penalties for employers violating meal- and rest-break requirements). 290 Sanchez v. Martinez, No. C083268, 2020 WL 5494239 (Cal. Ct. App. Sept. 11, 2020). 291 Lab. Code § 226.7(c). See IWC Wage Orders § 11(D) (meal periods), § 12(B) (rest periods). See also Lab. Code § 558(a) (civil penalty for violating IWC Wage Order). 292 United Parcel Serv. Wage & Hour Cases, 196 Cal. App. 4th 57, 69 (2011) (affirming trial court order that up to two premium payments are allowable per work day; “we believe it is more reasonable to construe [section 226.7] as permitting up to two premium payments per workday—one for failure to provide one or more meal periods, and another for failure to provide one or more rest periods.”). 293 Lab. Code § 226.7(e). 294 See, e.g., Mills v. Superior Court, 135 Cal. App. 4th 1547 (2006) (recognizing penal nature of meal-period pay); Murphy v. Kenneth Cole Prods., Inc., 134 Cal. App. 4th 728 (2005) (same), rev’d, 40 Cal. 4th 1094 (2007); Caliber Bodyworks, Inc. v. Superior Court, 134 Cal. App. 4th 365, 380 n.16 (2005) (same). 295 Hartwig v. Orchard Commercial, Inc. (June 17, 2005), effectively overruled by the California Supreme Court’s Murphy’s decision, discussed in text. The Labor Commissioner on occasion has designated an Order, Decision or Award as a Precedent Decision. See Gov’t Code § 11425.60. The Hartwig decision was the first to receive that special status. The Hartwig opinion fully reviewed the wage v. penalty issue and concluded that the additional hour of pay is indeed a penalty. The Murphy decision, however, makes Hartwig a dead letter. 296 Murphy v. Kenneth Cole Prods., 40 Cal. 4th 1094, 1099-1110 (2007) (affirming judgment to employee; “We conclude that the remedy provided in Labor Code section 226.7 constitutes a wage or premium pay and is governed by a three-year statute of limitations”). 297 Id. at 1103. 298 Bus. & Prof. Code § 17200. 299 Naranjo v. Spectrum Security Services, Inc., No. 258966 (Cal. May 23, 2022). 300 In a May 29, 2015 advice memorandum (which “may not be used or cited as precedent”), the IRS Office of Chief Counsel indicated that while section 203 (“waiting time”) penalties are not taxable as wages, section 226.7 payments may be: “[As to] … meal and rest period
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