©2024 Seyfarth Shaw LLP www.seyfarth.com 2024 Cal-Peculiarities | 233 7.10.3 Attorney fees Attorney fees denied for meal and rest break claims. In 2020, the Court of Appeal held that claims for failure to provide meal and rest breaks are not claims “brought for the nonpayment of wages” within Labor Code section 218.5, which entitles the prevailing party to reasonable attorney fees. The Court of Appeal explained that the remedy for failure to provide meal or rest breaks is an additional hour of pay—often described in the case law as “premium wages”—but that does not turn a lawsuit for denied meal or rest breaks into a lawsuit for nonpayment of wages. Further, the plaintiff was not entitled to attorney fees under section 203 (for waiting-time penalties) or section 226 (for wage-statement penalties), either, because actions for failure to provide meal or rest breaks do not entitle employees to pursue derivative penalties under those sections.318 7.10.4 Further issues involving the “one additional hour of pay” Extra hour of pay must be paid at the regular rate of pay. Until 2021, there was an open debate whether the additional hour of pay for noncompliant breaks must be paid at the usual hourly rate or regular rate of pay. Although Labor Code section 226.7(c) specifies a particular way to measure the extra hour of pay—the employee’s “regular rate of compensation”—plaintiffs argued that the proper measure is the “regular rate” used for overtime-pay purposes. The “regular rate” often will be higher than the usual hourly wage (as, for example, when an employee during a relevant workweek works some hours subject to a shift premium). At other times the “regular rate” will be lower than the usual hourly wage (as, for example, when an employee during a workweek gets a “controlled standby” wage, set at a low rate). Proponents of “usual hourly rate” cited the Legislature’s decision not to adopt the “regular rate” term of art, while choosing instead to adopt the phrase “regular rate of compensation.” The DLSE seemed to have agreed.319 Then, in 2021, the California Supreme Court dealt yet another blow to employers, in Ferra v. Loews Hollywood Hotel. Ferra decided that the extra hour of pay must be paid at the regular rate of pay; that is, the employer must calculate extra hour of pay the same way the employer would calculate the regular rate for overtime purposes.320 Then, pouring salt into the employer wound it had just created, the Supreme Court held that its Ferra decision applies retroactively.321 Must the pay be recorded in wage statements? Is the extra hour of pay something that employers must record in the wage statement (see § 16.3)? One might think not, as the extra hour of pay is not truly wages “earned” and does not represent “hours worked,” and thus logically does not fall within a category of the items that the wage statement must include. Indeed, in 2019, the Court of Appeal held in Naranjo v. Spectrum Security Services, Inc., that “unpaid premium wages for meal break violations do not entitle employees to additional remedies” under section 226 if their “pay statements during the course of the violations include the wages earned for on-duty meal breaks, but not the unpaid premium wages.”322 But then the California Supreme Court struck again. Its 2022 decision in Naranjo held that both paid and unpaid meal premium pay must be reported as “wages earned.” (See § 16.3.) 7.11 Suitable Seats and Comfortable Temperatures Most California Wage Orders require employers to provide employees “with suitable seats when the nature of the work reasonably permits the use of seats.”323 The relevant provision has two independent parts: sections 14(A) and 14(B). Section 14(A) requires that seats be provided when the nature of the work reasonably permits, while section 14(B) requires that seats be placed nearby for use when the employees “are not engaged in the active duties of their employment.” The Wage Order does not authorize any monetary remedy, but a Labor Code provision forbids employment conditions prohibited by a Wage Order,324 and the PAGA statute empowers employees who experience Labor
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