CA Supreme Court Rules on Meal and Rest Breaks for Employees

Under California’s wage and hour laws, employees must be provided with 30-minute meal breaks when they work for five hours unless their shifts are only six hours. If they work for 10 hours, they must be provided with two meal breaks. Employees can voluntarily waive the first meal break, but employers cannot pressure them to do so. If an employer violates the meal break rules, the employee must be paid for the time he or she actually worked as well as one hour of premium pay at the employee’s regular rate. In Donohue v. AMN Services, LLC, Cal. S.Ct. Case No. S253677, the California Supreme Court considered whether rounding time for meal periods is appropriate under California’s wage and hour laws.^[1]

Factual and Procedural Background

Kennedy Donohue was employed as a nurse recruiter for AMN Services, a health care staffing company that recruits nurses for temporary contract work, from Sept. 2012 to Feb. 2014. Donohue worked in the company’s San Diego office. While she did not have set shifts, AMN expected her to work eight hours per day. AMN had a company policy that employees were to be given a 30-minute, uninterrupted break that started at the end of the employees’ fifth working hours. The policy also stated that employees were relieved of their job duties during these breaks and that supervisors should not discourage them from taking their breaks.

During this time, AMN used Team Time, a time-tracking software that employees logged in and out of on their work computers. Employees would clock in at the beginning of their shifts, clock out at the start of their breaks, clock in at the end of their breaks, and clock out at the end of the workday. If they forgot to log in, they could ask their supervisors to manually adjust their entries. The software rounded the times to the nearest 10-minute increments. For example, if an employee clocked out for lunch at 12:03 and clocked back in at 12:25, Team Time would record that the employee clocked out at 12 and back in at 12;30, reporting a 30-minute lunch break instead of 22 minutes. The way that the software worked meant that employees might end up starting their breaks after the end of the fifth hour, depending on the times of arrival and when they clocked out.

Team Time was also used by AMN to track when employees did not take breaks, and the company would then pay them premium wages for the missed break times. Employees who skipped breaks, took short breaks, or took breaks later than the end of their fifth hour would choose an option from a drop-down menu prompting them to select the reason. Employees who reported voluntarily taking shorter breaks or delayed breaks were not paid a premium for the missed break time. Employees had to turn in this information each pay period and had to sign certifications that their time entries were accurate.

To check for delayed or short breaks, AMN relied on the rounded times reported by Team Time. Because of the rounding, employees would not be prompted to report meal period violations when breaks were late or short but reported incorrectly as occurring at the prescribed times and for the prescribed lengths by the software.

Donohue filed a class-action lawsuit against AMN in April 2014, alleging wage and hour violations and other claims. She argued that AMN’s use of Team Time meant that employees were denied compliant meal breaks and premium pay for breaks that were noncompliant.

Donohue testified that the culture at AMN discouraged employees from taking breaks. She also submitted expert witness testimony that AMN’s use of Team Time resulted in more than 40,000 short breaks for which class members were not paid premium wages and more than 6,600 delayed breaks for a total value of more than $802,000 during the class period.

AMN filed a motion for summary judgment or summary adjudication. The company argued that there was no uniform policy of denying breaks to employees. It also argued that Donohue did not argue in her complaint that the rounding had resulted in break violations. The company submitted declarations from 40 class members in support. AMN’s expert stated that the rounding meant that employees were sometimes paid for a few extra minutes or for a few fewer minutes and that it evened out. AMN’s expert did not account for lost premium wages but stated that the rounding likely resulted in the class being paid for 85 extra hours during the class period.

The court denied Donohue’s summary adjudication motion and granted AMN’s summary judgment motion. It found that AMN’s rounding of time complied with California law and that Donohue had presented insufficient evidence of a policy of discouraging meal breaks. On appeal, the California Court of Appeal affirmed the trial court’s judgment that it was proper for AMN to round meal break times. Donohue filed an appeal with the California Supreme Court.

Issues

1. Whether rounding meal periods is appropriate, and
2. Whether records showing non-compliant meal breaks raise a rebuttable presumption of violations of meal breaks.

The California Supreme Court accepted the case to consider whether rounding meal periods complied with California’s wage and hour laws. It also evaluated whether a rebuttable presumption of meal break violations was created by time records showing non-compliant meal breaks.
Rule: Employers must provide employees with 30-minute breaks after they work for five hours unless the employees work for six hours and waive their breaks. Employers must compensate employees for non-compliant breaks by paying them one additional hour at their regular rates.

Under Cal. Lab. Code § 512(a), California employers must provide their employees with at least a 30-minute break once the employees have worked for five hours.^[2] However, this break can be waived by the employees and employers if the employees only work for six hours. If an employee works for 10 hours, he or she must be offered a second meal break of 30 minutes. If the employee works no more than 12 hours, the second meal break may be waived by the employee and employer only if the first break was not also waived. Whenever there is a meal break violation, the employer must compensate the employee for the delayed, shortened, or missed break by paying him or her an additional hour of time at the worker’s regular rate of pay.

Analysis

The Supreme Court began with an analysis of whether the practice of rounding time for meal breaks, which is commonly used for calculating wages, is proper under California wage and hour law.^[3] The court stated it was not considering whether AMN’s policy resulted in a failure to pay employees for all of the hours worked but instead whether it resulted in a failure of the company to pay premium wages for missed, delayed, or short meal breaks.

The court noted that California’s wage and hour laws are controlled by both the California Labor Code and orders from the Industrial Welfare Commission or IWC. The IWC’s wage orders are accorded the same weight as the state’s statutes and must be given separate consideration. The Labor Code and the IWC’s wage orders are construed liberally to best protect the interests of workers.

Under IWC Wage Order No. 4, employers that do not provide employees with a 30-minute meal break after they have worked for five hours must consider the time as time worked and pay them.^[4] Meal period violations are not considered to have occurred when employees voluntarily work through a meal period. However, employers must not have formal policies under which employees feel pressured to work through meal breaks.

Under the IWC and the Labor Code, minor violations of meal breaks trigger the requirement to pay premium pay. Employers must pay employees both the premium pay for an hour as well as for any time the employees actually worked during their meal periods. In considering the practice of rounding time for meal periods, the California Supreme Court found that it didn’t comply with the provisions of the IWC and the Labor Code because it could allow minor violations without the payment of premium pay. It found that rounding time for meal periods did not comply with the requirements of California law.

The court then considered whether a rebuttable presumption that meal period violations have occurred is created when time records indicate non-compliant meal breaks. The court found that when a worker has worked for five hours, and the time records do not show any meal breaks, a rebuttable presumption is created. The employer will then have the burden of proving that the employee waived the meal period as an affirmative defense. The court likewise found that time records that show short or delayed meal breaks create the rebuttable presumption and shift the burden of proof to the employers.

Conclusion

The California Supreme Court found that AMN improperly used rounding for meal periods and that a rebuttable presumption was created by the time records. The case was remanded to the trial court. It stated that AMN must provide prima facie evidence that one of the elements of the cause of action could not be proven to renew its summary adjudication motion. It also ordered that if Donohue renewed her summary adjudication motion, she would need to present time records showing non-compliant meal periods to create the rebuttable presumption. The burden would then shift to AMN to prove that the non-compliant meal periods were voluntary.

Talk to an Experienced Employment Lawyer

If your employer has failed to provide you with meal breaks that comply with the law or to compensate you when breaks were not provided, you may be entitled to recover damages. Contact an attorney at Steven M. Sweat, APC to request a free consultation by calling 866-966-5240.

Sources

[1] Donohue v. AMN Services, LLC

[2] California Code, Labor Code – LAB § 512

[3] Wage and Hour Claims

[4] IWC Wage Order No. 4