Webinar: California Break Law Compliance

What You'll Gain:
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• Expert advice to avoid legal pitfalls, premium pays, and costly fines.
• Proven strategies for tracking and verifying employee breaks.
• A first-hand look at Timeero’s California Breaks Tracking feature for streamlined compliance.
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About Amber S. Healy

Ms. Healy is a key figure at Atkinson, Andelson, Loya, Ruud & Romo—a full-service law firm with over 200 attorneys across nine California offices— leading the firm’s Complex Litigation Team. She specializes in defending employers in various lawsuits, from class action to single-plaintiff cases, with remarkable expertise in wage and hour laws, including meal and rest break violations.
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About Barima Kwarteng

Barima has led Timeero from its inception to becoming a go-to SaaS solution that helps employers seamlessly track time, locations, and mileage and manage their workforce. Offering features tailor-made for California employers, Timeero isn't just another tracking app—it's a comprehensive solution that ensures compliance and efficiency.
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Understanding California's Lunch Break Laws: An Employment Lawyer Weighs In
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On the 27th of October, Amber S. Healy joined Barima Kwarteng, CEO and Founder of Timeero, for a live webinar on California Breaks Law compliance to discuss the break requirements, common traps, and the high costs of non-compliance.

Ms. Healey also shared some best practices to mitigate the risk of individual meal and rest break claims, class action, and PAGA claims.
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This written piece offers a comprehensive overview of the California Meal Break Law explained by an employment lawyer.‍

Challenges With the California Lunch Break Law

According to Ms. Amber Healy, California's regulations regarding meal and rest periods make compliance very difficult. And the courts have made it even more complicated.

“Usually, in a lawsuit, it is the person suing who bears the burden to prove that they have a valid claim. But in the context of meal and rest break claims, if you're an employer and your records show non-compliant meal periods or your policy for rest breaks is not valid or has a "has to remain on the premises" type language in it, the burden shifts to the employer to prove that what the employee is alleging is wrong.”

This situation is unique to employment cases and is a very difficult burden for employers to overcome.

So, let’s see how the California Meal Break Law is explained by an employment lawyer.

Rest Break Requirements
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• Employees earn a paid 10-minute rest break for every 4-hour work period or a major portion.
  
• Rest breaks must be uninterrupted, and employees must be able to leave the premises if they want to.
  
• Time spent removing protective gear, like masks or vests, doesn't count toward the break. This can be challenging in manufacturing environments where Personal Protective Equipment is mandatory.
• If your facility is large, consider the time it takes for an employee to exit the work area. For example, Ikea faced a lawsuit for not accounting for the time it took for employees to leave the store premises.
  

Unpaid Meal Break Requirements
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• Any employee working more than 5 hours in a day must be granted a 30-minute, uninterrupted meal break. The break is usually unpaid, but it must be completely uninterrupted.
• An employee can voluntarily choose to waive their first meal period, but only if they complete their workday within 6 hours. This waiver must be documented.
• If the workday exceeds 6 hours by even a minute, it results in a meal period violation, and penalties apply.
• For workdays longer than 10 hours, a second 30-minute meal break is required. Employees can waive this second meal period if their shift won’t exceed 12 hours and they've had a compliant first meal period
• Even if an employer grants employees a paid meal break, they still need to follow all the other requirements and pay the additional hour of pay if the meal period is skipped or used non-compliantly.

“The issue with meal and rest breaks and many other wage and hour issues is that they're really a hair-trigger liability. That means you could have made an honest mistake. You could have made every effort to comply. You could have been trying and still got it wrong or not realized that you had employees taking mail periods at, you know, 5.2 hours rather than before the fifth hour of work. And as a result of that, these are lawsuits that are really employees sue first and then ask questions later.”

How Private Claims & Agency Actions Shape California Lunch Break Law Compliance?
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In California, wage and hour laws are primarily enforced through two channels: private civil lawsuits and administrative agencies. Private lawsuits often take the form of class actions or Private Attorney Generals Act (PAGA) claims, the latter being unique to California.

On the administrative side, there are federal and state agencies—the Department of Labor handles federal law. In contrast, the Division of Labor Standards Enforcement, or the Labor Commissioner, handles state-specific laws, such as meal and rest break requirements.

In 2021, the Department of Labor assisted nearly 200,000 workers nationwide, with about 9% of those cases coming from California. The agency recovered over $230 million in back wages and initiated approximately 25,000 compliance actions involving audits and potential penalties. DOL's focus often targets low-wage, high-violation industries like construction and food services, providing cues to private attorneys about which sectors might be ripe for wage and hour lawsuits.

‍“And that matters because when the administrative agencies say: hey, we see that construction has a huge problem here, because as you can see from this chart, almost $33 million then back wages were collected from construction companies by the Department of Labor. So that tells the private attorneys working in this area of wage and hour - hey, construction companies have a problem, let's target them.

‍‍We also can look at food services. A really high number there, with $27 million. So these are things that kind of tip-off also the private attorneys of what industries they might wanna target, getting clients from.”

‍Unlike the federal Department of Labor, which is quite transparent with its data, the California Labor Commissioner's Office is less forthcoming. Still, you can find some crucial details on the webinar recording.

‍PRO TIP: The DOL has also developed a timekeeping app, available for download by employees. This app allows workers to independently track their hours and calculate their due wages, thereby flagging discrepancies with their actual pay. Employers should be aware of this app, as the DOL retains the data and could trigger further investigations.

How Do Wage and Hour Lawsuits, Especially Those Involving Meal and Rest Breaks, Get Really Expensive for California Employers?
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“The way that the labor code is set up, I call it a pyramid scheme. And the top of the pyramid is the unpaid wages.”

‍So, how can a mistake in a timekeeping system that started at $130,000 in unpaid wages end up being about $2.5 to over $4 million?

To explain how wage and hour lawsuits involving meal and rest breaks turn out so expensive, Ms. Healy gave a very concrete example of a 75-person crew with an average $25 hourly rate. Unfortunately for the employer, the crew used an auto-deduct for 30-minute breaks.

Two days a week, the employees are only taking twenty-minute meal periods, but they're being auto-deducted half hours. So, there is a 10-minute break time differential there.

The Core Issue: Class Action for Unpaid Wages
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Here is an example of the calculation following the California Meal Break Law, explained by employment lawyer Amber S. Healy.
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• Number of Non-Exempt Employees: 75
• Work Weeks per Year: 52
• Years Under Consideration: 4

The total number of work weeks for the entire crew over the four years is calculated as:
75 employees × 52 (weeks/year) ×4 (years) =15,600 work weeks
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• Unpaid Time per Week: 10 minutes twice a week = 20 minutes
• Unpaid Time in Hours: 20 minutes/week×15,600 work weeks / 60 minutes/hour = 5,200 hours

To find the total unpaid wages, we need to multiply the unpaid time in hours by the hourly wage rate of $25: 5,200 hours x  $25/hour = $130,000

‍However, unpaid wages are just the tip of the iceberg when it comes to employers’s costs under California Law.

Additional Penalties and Costs
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When a California Lunch Break Law is explained by an employment lawyer, all the risks and costs attached to non-compliance are much easier to understand.

So, apart from the class-action lawsuits, employers may be subject to other additional penalties and costs.
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• Wage Statement Violation: Assuming 50 employees are affected, the claim for wage statement violation is set at $200,000.
• Waiting Time Penalties: For separated employees who weren't paid their full wages, penalties are due. Assuming 30 employees are affected, the penalties amount to $180,000.
• Meal Period Premiums: Meal period premiums are calculated twice weekly for 15,600 work weeks, resulting in $780,000.

To this sum, you can add potential rest and PAGA claims, as well as attorney’s fees.

PAGA Claims: A Legal Minefield for California Employers
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And if you are running a business in California and still unfamiliar with PAGA claims - consider yourself lucky.

Enacted in 2004, PAGA is a legal framework unique to California. It allows California employees to initiate a representative action, a specific type of lawsuit, to recover civil penalties for labor code violations. Previously, only the state could recover these penalties. A key aspect to note is the one-year look-back period for PAGA cases.

Under PAGA, private plaintiffs and their attorneys act as substitutes for the state, taking on the role of enforcing California labor laws. Once a claim is successful, 75% of the recovered amount goes to the state of California, while the remaining 25% is distributed among the affected employees.

Initiating a PAGA lawsuit involves a crucial first step: filing a letter with the California Labor and Workforce Development Agency (LWDA). This agency is not just a regulatory body but a significant revenue generator for the state. For instance, in 2019 alone, the LWDA raised $88 million from PAGA cases with minimal expenditure.
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The records of PAGA letters are easily available online in the searchable database.

“Meal and rest break claims continue to be very highly litigated. They are a sweet spot for the plaintiffs' bar. In particular, meal periods, because they are recorded, and they are off the clock. And it is a records-based claim. So, the attorneys who are suing companies don't need to talk to anybody to be able to determine if there's a meal break issue. They just need to look at the records frequently.”

Employment Attorney’s Tips to Mitigate Risks Related to California Lunch Break Laws
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“You have to demonstrate as the employer all of the efforts that you made to comply with the law: communication, policies that are compliant - all of those things are going to go really far in mitigating, not eliminating, but mitigating exposure that you would have in a PAGA case.”

‍So, what are the best practices for meal and rest breaks under California Labor Laws?

• Establish a Meal and Rest Break Policy. Your handbooks and postings that communicate the meal and rest break requirements to your employees should be clear, and they should be consistent, and you should follow them.
• Employer’s compliant written policies and practices have to match one another. Your mid-level managers need to know and understand the policies and make sure that the practices that they're doing with their team, their crew, or the people who are working that day are consistent.
• If there are many non-compliance occurrences, it becomes a disciplinary issue. Discuss it with your employees. If it is that they're choosing to do it, they're violating policy, and you have to write them up for that. And counsel them to comply with the policies.
• Regularly remind, reinforce, and discuss meal period requirements with employees. You need to have systems in place so that your employees know that they can come to you and easily report any meal or rest period issues they may be having, and always encourage them to do so.
• If you have a meal waiver with an employee, put it in writing. The waiver must clearly state that it is signed voluntarily and that an employee can revoke it at any time. Also, take preventive measures so your employees stay within the hard six and 12-hour workday mark. If an employee works even a second more, you must pay a penalty.
• In California, you can mitigate the risk by having arbitration agreements, as they are always litigated in the courts. The arbitration agreement may also help you mitigate PAGA, as the judge who is overseeing the case does have the right to reduce penalties under the law.
• Pay meal break premiums using the regular rate of pay and list them separately on the wage statements.

“There was a case back in 2015 involving Safeway. A big company, a sophisticated enterprise. They had a division that was part of the class action lawsuit where they had never paid a meal break premium. And it went up to the Court of Appeal, and the Court of Appeal said: Oh, there's one explanation for this. Safeway is perfect—human perfection. The court went on to say how human perfection is very rare and basically said that that'd be ridiculous. That they were perfect and no one ever took a late or short meal period was ridiculous.”

What About Best Timekeeping Practices?

• A timekeeping system should be set up so that it automatically triggers a report and hopefully automatically triggers payment for late, short, or missed meal periods.
• Time rounding practices are not permitted in California regarding meal periods. If you have a timekeeping system rounding your meal periods, stop doing that. You need your meal periods to be precise to the minute. So, if someone is clocking out at 12.01 to take their meal, it should reflect that they're clocking out at 12.01.
• California rest break law does not require you to keep track of rest breaks. But if you are recording and keeping track of people taking their rest breaks, you must also ensure they're taking compliant rest breaks and paying rest break premiums.
• If you are using a lockout feature, you want to make sure that you have protocols in place to allow employees to report times when they went back to work and were not able to clock back in due to a lockout. The lockout feature requires very clear and consistent communication about how to report when there are deviations.

“Auto-deducts are permissible, but a big no-no in my mind if you want to avoid being sued. And if you are doing an auto deduction, you still need to record the start and stop times of people's meal periods. So I would say if you're doing an auto deduct, you're running in a very high-risk category. So that's like in the red area of risk.”

How Can Timeero Help My Business Comply With California Lunch Break Law?

During the webinar, Barima Kwarteng, the CEO and founder of Timeero, presented how this software can benefit California employers.

Besides a comprehensive suite of features, like time, location, mileage tracking, and scheduling, Timeero offers a reliable California Break Tracking feature to help companies avoid legal and financial trouble.
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California Break Tracker allows employees to track rest and meal breaks easily, following state-specific laws and with no time rounding, using the Timeero app on their mobile devices.
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To keep employees on track and enforce meal and rest break policy, Timeero lets you set automated reminders based on work hours.
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Every workday, before clocking out from work, employees who are assigned to the California Break policy will need to attest to their breaks using Daily Sign-off forms.
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Using Timeero, admins can see who's taking breaks and even the reasons why some might not be. The non-compliance triggers an alert letting you calculate and pay the premium in a timely manner and opens up the space for important conversations about compliance.
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In the case of potential litigation or a lawsuit, you will be armed with evidence.

For those who need more control over their labor costs, Timeero offers a lockout feature, preventing employees from clocking back to work before the shift ends. However, employers opting for this functionality must take all measures to build mechanisms that employees can use to report the earlier end of their break periods.

Barima Kwarteng also announced the features in the development phase that will be available soon. Those features include Daily Sign-offs with employee signatures and automatic calculation of premium pay for missed breaks.

Besides a solid Meal and Rest Break Policy, all these efforts aim to make compliance easier, more efficient, and scalable compared to traditional methods like pen and paper.

Disclaimer: California Meal Break Compliance webinar materials are for informational purposes only. None of the information should be relied on as law. If you have a specific issue in your organization or company, you should work with your council, or feel free to contact an employment attorney.

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