Case Updates
Supreme Court of California rules on statute of limitations for mandatory meal or rest period liability
April 16, 2007
The Supreme Court of California ruled that the one-hour of additional pay due employees under California’s Labor Code for each day they are not provided with a meal or rest period constitutes a wage rather than a penalty, thus subjecting employers to a three-year statute of limitations (which may be extended to a four year statute of limitations under California’s unfair business practices laws).
U.S. Chamber files amicus brief
October 17, 2006
NCLC filed an amicus brief regarding the proper interpretation of California Labor Code Section 226.7, which provides in part, that if an employer fails to provide an employee a meal period or rest period, it shall pay the employee one additional hour of pay at the employee’s regular rate of compensation. The issue before the California Supreme Court is the characterization of the nature of the statutory payments and whether they should be treated as a penalty -- with a one year statute of limitations -- or as damages or wages, with a three or four year statute of limitations. California courts of appeals have adopted inconsistent holdings in cases relating to this issue. The split of authority has made it virtually impossible for employers to predict with certainty what statute of limitations will be applied, and NCLC urged the California Supreme Court to uphold the ruling that the payment be treated as a penalty with a one year statute of limitations.