Employer’s Failure To Include Premium Pay On Wage Statements For “On Duty” Meal And Rest Periods Did Not Trigger Penalties Because Premium Pay Is A Statutory Remedy For An Employer’s Conduct – Not An Amount “Earned” By The Employee.
A certified class of former and current non-exempt employees brought a lawsuit against their employer for meal break violations in Naranjo v. Spectrum Security Services, Inc., Case No. B256232 (2nd Dist., Div. 4 September 26, 2019) (published). They sought premium wages, Labor Code §§ 203 (waiting time penalties) and 226 (itemized wage statement penalties) derivative remedies, and attorney fees. We focus on the attorney fees issues involved in this case.
The employees were/are officers for a security company responsible for taking temporary custody of federal prisoners and ICE detainees for offsite travel for medical treatment, court appearances and other appointments. Two such officers jointly provide continuous supervision until the prisoner/detainee is returned to his/her custodial location. The officers are not permitted to leave the room or building where the prisoner/detainee is located, and are required to remain “on duty” during meal breaks.
With respect to one sub-class of the employee class members, employer had failed to: (1) provide an off-duty meal period; (2) obtain a mutually agreed-upon waiver if one hour or less would end the work shift; or (3) obtain written agreement to an on-duty meal period for shifts lasting longer than five hours. This entitled these sub-class members to premium pay under Labor Code section 226.7 (an additional one hour of pay for each day an off-duty meal period is not provided without waiver or written agreement described above) – something the employer had failed to pay.
The parties stipulated that the sub-class was owed $1,393,314 in premium pay during a second trial phase in this action. The third phase of trial, a bench trial, dealt with the employees’ requests for Labor Code §§ 203 and 226 penalties and attorney fees. The section 203 requests were denied. However, the trial court determined the sub-class was entitled to the section 226 penalties as the premium pay had not been reflected in the employees’ wage statements. The parties stipulated to $399,950 for the section 226 penalties. Based on the employees’ section 226 win, the trial court awarded attorney fees pursuant to section 226(e). Employer appealed.
The 2/4 DCA reversed the trial court’s finding on the section 226 penalties because the penalties are triggered by an omission from the wage statement of “wages earned.” Here, the premium pay served as a statutory remedy for an employer’s conduct. The premium pay is not an amount the employee has “earned.” Because the section 226 penalties were reversed, so too were the attorney fees awarded under section 226(e). The award of attorney fees was contingent upon the award of section 226 penalties.
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