Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour and Labor Code Class Actions (22nd Edition) 39 Waiting time penalty liability could not arise from meal period violations, as such penalties only arise from failure to pay wages.213 Arguably, no additional $100-per-pay-period penalty would be recoverable under the Labor Code Private Attorneys General Act of 2004 (“PAGA”).214 The employee would not be entitled to prejudgment interest under Labor Code section 218.6.215 In 2007, in a decision that surprised many in the wage and hour community, Murphy v. Kenneth Cole, the California Supreme Court held unanimously that Section 226.7 provides for “a wage or premium pay” rather than a penalty.216 Although the decision definitively decided that the statute of limitations on a Section 226.7 claim is three years, the decision left open several other issues. First, does premium pay under Section 226.7 constitute restitution under the Unfair Competition Law, thereby extending the limitations period for recovery of premium pay to four years?217 And are employers liable for waiting time penalties under Section 203 if they do not pay all meal and rest premium pay at termination, and penalties under Section 226, if they do not list unpaid, but owed, premium pay on wage statements? In 2022, the California Supreme Court in Naranjo v. Spectrum Security Services, Inc.218 dealt a blow to employers by holding that meal and rest period premium payments are, indeed, subject to the final pay timing requirements of Labor Code section 203, as well as the wage statement reporting requirements of Labor Code section 226(e).219 Thus, plaintiffs pursuing meal and rest break claims can also pursue derivative claims seeking waiting time and wage statement penalties, and the settlement value of such claims will increase. C. Meaning of “Provide” a Meal Period Following the Supreme Court’s ruling in Murphy v. Kenneth Cole, the most hotly debated issue in meal period law was whether the employer complies with its duty to “provide” a meal period by making the meal period available 213 Lab. Code § 203 (penalties recovered for failure to pay promptly all wages owed to employees who quit or are discharged). 214 Lab. Code § 2698, et seq., discussed below in Section XII. But see Caliber Bodyworks v. Superior Court, 134 Cal. App. 4th 365, 377 (2005) (suggesting that penalties recoverable by individuals independent of PAGA are not civil penalties, which would allow recovery of a separate civil penalty for violations of Labor Code section 226.7 even if the one-hour-ofpay requirement is a penalty). 215 Cf. Lab. Code § 218.6 (statutory pre-judgment interest recoverable in action for wages). 216 Murphy v. Kenneth Cole Prods., 40 Cal. 4th 1094 (2007). 217 This question remains unresolved. Employers can argue that meal and rest premiums should not be recoverable as restitution under the UCL, because the employee did not perform labor to earn the premiums, and thus has no “ownership interest” in the premiums. See Pineda v. Bank of America, 50 Cal. 4th 1389, 1401-02 (2010) (“permitting recovery of [Labor Code] penalties via the UCL would not ‘restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest.’”). 218 13 Cal. 5th 93 (2022). 219 Id. at 102.
RkJQdWJsaXNoZXIy OTkwMTQ4