The California Supreme Court ruled in Naranjo v. Spectrum Security Services, Inc. that meal and rest premiums are considered wages, imposing specific pay responsibilities for employers throughout the state.
The Naranjo court made clear how important it is for employers to have a well-documented policy providing meal and rest breaks. Premium pay for missed breaks must now be reported on wage statements and paid out accordingly, per California Labor Code §§ 203 and 226.
Additionally, the Naranjo court ruled that employers must pay a seven percent (7%) prejudgment interest rate for break premium payment claims under the California Constitution.
Finally, it is important to note that the Naranjo holding is limited to wage statement and final payment obligations. As of now, it is unclear whether meal and rest premiums are considered wages in other contexts, but it would not be surprising if that designation was extended elsewhere in future cases.