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A recent California Supreme Court decision on meal, rest, and recovery period violations could have major implications for many of the state’s employers — including hospitals.
Under current law, an employee who does not receive a meal, rest, or recovery period is owed “one additional hour of pay at the employee’s regular rate of compensation.” For many labor attorneys, this was interpreted to mean an additional hour of pay at the employee’s base pay rate — that is, the employee’s hourly pay rate, not including overtime compensation or bonuses. However, under a recent California Supreme Court decision, this is no longer permissible.
On July 15, the court ruled unanimously in Ferra v. Loews that the requirement of an additional hour of compensation at the employee’s “regular rate of compensation” has the same meaning as “regular rate of pay,” requiring the inclusion of overtime and bonuses with the employee’s base pay rate. As this ruling is retroactive, hospitals that compensate missed meal, rest, and recovery periods solely based on the employee’s base pay rate are out of compliance with the law and may face significant legal liability.
CHA encourages all hospitals to review their pay practices to ensure they are in full compliance with the law and to reach out to their California labor law counsel with any questions.