In the most important Employment Law case of the year, the California Supreme Court recently held that the “additional hour of pay” for employees missing meal and break periods is a wage and not a penalty, thus falling under the three-year statute of limitations instead of the one-year statute of limitations.
This morning, in Murphy v. Kenneth Cole Productions, the California Supreme Court handed down a landmark ruling in what many legal experts say is the hottest employment law case of the year. Unfortunately, the Court’s ruling is unfavorable for California employers.
Revisiting the ground rules governing lawsuits over missed break periods, the Court ruled that the “additional hour of pay” due employees who work through meal and rest periods constitutes a wage and not a penalty according to “[Labor Code] section 226.7’s plain language, the administrative and legislative history, and the compensatory purpose of the remedy”. The result of this is instead of the one-year statute of limitations governing penalty claims, employees seeking back pay for missed meal and rest periods are now entitled to a three-year statute of limitations.
This difference in classification now makes employers potentially liable for millions of dollars more in back pay and damages in wage claims cases.
The Supreme Court’s ruling upholds the plaintiff’s award of $64,000 for unpaid overtime, missed meal and rest periods and penalties, as well as attorney’s fees of $62,000. This case comes on the heels of a $115 million award against Wal-Mart in an earlier meal break case.
If you would like a copy of the case or for more information on employer liability, feel free to contact Kyle D. Kring of Kring & Chung, LLP.