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April 06, 2006
Meal Period Remedy 'Penalty or Wage'

Under the California Labor Code, any employee you don't provide with a required meal or rest break must be given one additional hour of pay for each missed meal or rest break­and pay for time the employee worked during that period. But a controversy has emerged over whether this remedy is a penalty or just wages. To recover a penalty, an employee must file a claim within 1 year­but an employee has 3, and sometimes 4, years to lodge a claim for back wages. Plus, a penalty, unlike wages, isn't subject to income tax withholding.

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Several California appellate courts have come down on opposite sides of the controversy. Two courts have recently ruled that the remedy is a penalty, and one said it is actually a form of wages. The Division of Labor Standards Enforcement, in the proposed­and now lapsed­meal period regulation it issued last year, sided with the 'penalty' proponents.

Because of the conflict, the California Supreme Court has now agreed to review one of the appellate court decisions (Murphy v. Kenneth Cole Prods. Inc., Calif. Court of Appeal (1st Dist.), No. A107219 (2005) (review granted)). We'll keep you posted. In the meantime, the REST PERIODS section of HR.BLR.com has details on your meal and rest period obligations.

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