CA Supreme Court Interprets Break Premium Pay Requirement To Give Employees Higher Pay

In Ferra v. Loews Hollywood Hotel, LLC, the California Supreme Court concluded that when an employer fails to provide an employee with a compliant rest or meal break, the employee is entitled to a premium payment of one hour of pay at the employee’s “regular rate of pay,” as opposed to an hour of pay at the agreed upon base hourly or straight-time rate of pay. In doing so, the Court sought to maximize protections for employees by requiring employers to factor bonuses and other non-discretionary compensation into the break premium rate of pay. Otherwise, the Court claimed, employers would be incentivized to depress employees’ hourly wages in favor of non-hourly incentive compensation.