Are You Paying the Correct Amount of Premium Pay?

A restaurant owner, with staffing issues, recently asked me, “What am I required to pay to an employee who had to work through two breaks and their meal period in a very busy eight-hour workday?” 

My answer was, “You owe your employee one hour of premium/penalty pay for the two missed rest periods and another hour of premium/penalty pay for the missed meal period.  And, remember to use the ‘regular rate’ of pay when calculating that payment.”  

The owner was confused—so I broke the answer down to the basics:    

Meal Periods

Employers must provide California employees with uninterrupted meal periods. (California Labor Code section 512.)

• Employees who work more than five hours are entitled to a 30-minute, uninterrupted, unpaid meal break unless the employee has signed a meal period waiver and the employee’s shift is no more than six hours.
• A second 30-minute, uninterrupted, unpaid meal break is due to an employee who works more than ten hours unless the employee has waived their meal break, they took the first meal break, and their shift is no more than 12 hours.

Rest Breaks

Employers must provide California employees with uninterrupted, paid rest breaks (California Code of Regulations title 8, section 11090) as follows:

• One ten-minute rest break per four hours worked (or major fraction thereof). However, the employee is not entitled to a rest break when their total shift is fewer than three and a half hours.

Recovery Breaks

Let’s not forget about those employees working outdoors who are entitled to take a recovery break to cool down and prevent heat illness.

• Employees are allowed and encouraged to take a preventative cool-down rest in the shade for a period of no less than five minutes at a time when they feel the need to do so to protect themselves from overheating. Such access to shade must be permitted at all times.
• The employer may not require an employee to be on-call during rest and recovery breaks.
• Find more information on these heat illness requirements.

Penalty Pay/Premium Pay

When meal, rest, or recovery breaks are denied or interrupted due to the employer (e.g., work demands, supervisor pressure, etc.), California workers are entitled to premium pay, which is basically a penalty payment made by the employer. Here are some reminders:

• Premium pay is equal to one additional hour of pay—one hour for all meal period violations, and one hour for all rest period violations.
• Section 45.2.8 of the DLSE Manual states: “No matter how many meal periods (rest period penalties are separate) are missed, only one meal period premium is imposed each day.”
• Premium pay is calculated at the employee’s regular rate of pay, not just the base hourly rate.
• Employers often confuse the regular rate of pay with the base hourly rate of pay an employee earns. In fact, the regular rate of pay factors in other forms of compensation, such as non-discretionary bonuses and commissions, and therefore, may actually be higher than an employee’s normal base pay. 
• Premium pay constitutes wages. Therefore, premium pay needs to be included on wage statements, and timely paid out on the final paycheck.

Wage and hour issues can be tricky, especially when math is involved! CEA members may call us with questions at 800.399.5331.