Hill, Farrer & Burrill LLP

California Supreme Court Increases Potential Liability for Meal and Rest Period Premiums

On July 15, 2021, the California Supreme Court issued its decision in Ferra v. Loews Hollywood Hotel, LLC, holding that employers must pay premium payments to employees for missed meal, rest, and recovery breaks at the employee’s “regular rate of pay” rather than at their base hourly rate.  This holding aligns the formula for calculating meal period and rest break premium payments with the formula for calculating overtime payments under California law.

The “regular rate of pay” includes all non-discretionary incentive payments, such as bonuses and commissions.  This rate has been used to calculate overtime rates for workers who are paid both a guaranteed hourly rate and performance-based incentive bonuses, or piecework earnings.  Read more→