The court also confirmed that its decision will apply retroactively to meal and rest break violation premium payments previously made or owed.The “Regular Rate” Issue in FerraUnder California Labor Code section 226.7(c), employers must pay employees one additional hour of premium pay at their “regular rate of compensation” for meal and rest break violations.Under California Labor Code section 510(a), employers must compensate employees for overtime hours worked at premium rates based on the employee’s “regular rate of pay,” which is a term long understood to encompass not only hourly wages but also other nondiscretionary earnings, such as shift differentials, piece-rate and incentive compensation, and nondiscretionary bonuses.Central to the parties’ dispute in Ferra was whether the term “regular rate of compensation” as used in section 226.7(c) for meal and rest break violation premium pay has a meaning that is the same as or different from the term “regular rate of pay” as used in section 510(a) for overtime premium pay. The California Supreme Court granted review to resolve whether the California Legislature intended the two terms to be synonymous.Factual Background and Procedural History in FerraThe plaintiff in Ferra was a bartender at the defendant employer’s hotel property.

Overturning the California Court of Appeal, the California Supreme Court held that premiums paid for missed meal and rest breaks must include all nondiscretionary pay, not just hourly wages.California Labor Code section 510(a) requires employers to pay employees premium pay for overtime hours, calculated as a multiple of the employee’s “regular rate of pay,” which must include not only hourly wages but also other nondiscretionary payments. California Labor Code section 226.7(c) requires employers to pay employees “one additional hour of pay at the employee’s regular rate of compensation” if an hourly employee is not provided with a compliant meal, rest, or recovery period.

In addition, they must be compensated at 2 times the regular rate of pay for hours worked in excess of 12 hours in a workday and after the first 8 hours worked on the seventh consecutive workday in a workweek. (Cal. Labor Code, § 510(a) ("Section 510").)Plaintiffs Donald Sullivan, Deanna Evich and Richard Burkow worked for California-based software company Oracle as "Instructors," training Oracle customers on Oracle products.

BackgroundCalifornia Labor Code section 226.7 requires an employer that fails to provide an employee with a required meal, rest, or recovery period to pay the employee an additional hour of pay “at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided” (emphasis added). California Labor Code section 510 requires an employer to pay overtime at either one and one-half or twice the employee’s “regular rate of pay” when the employee works more than a specified number of hours in a workday or workweek.The Supreme Court of California previously clarified that section 510’s “regular rate of pay” calculation includes additional compensation beyond the employee’s straight-time rate of pay, such as split-shift differentials, commissions, and nondiscretionary bonuses; however, California case law had not previously defined the meaning of section 226.7’s “regular rate of compensation” calculation before the Court of Appeal’s decision in Ferra.The Ferra plaintiff, an hourly employee of Loews Hollywood Hotel, LLC, brought a putative class action alleging, in part, that Loews had improperly calculated meal and rest period premiums required by Labor Code section 226.7.

Morales v. 22nd Dist. Agricultural Ass’n, 1 Cal. App. 5th 504 (2016)Jose Luis Morales and 177 other similarly situated plaintiffs sued their employer under Cal. Labor Code § 510 and the federal Fair Labor Standards Act (“FLSA”) for failure to pay them overtime. Plaintiffs’ employer is a California agency that owns and manages the Del Mar Fairgrounds and the Del Mar Horsepark.

The California Supreme Court affirmed the judgment of the Court of Appeal, holding that Serrano III permits a trial court to calculate an attorney's fee award from a class action common fund as a percentage of the fund, while using the lodestar-multiplier method as a cross-check on the selected percentage. In this case, the trial court did not abuse its discretion by cross-checking the reasonableness of the percentage award by calculating a lodestar fee and approving a multiplier over the lodestar of 2.03 to 2.13.Del Mar Fairgrounds/Horsepark Employees Are Exempt From Overtime Under The Amusement ExemptionMorales v. 22nd Dist. Agricultural Ass'n, 1 Cal. App. 5th 504 (2016) Jose Luis Morales and 177 other similarly situated plaintiffs sued their employer under Cal. Labor Code § 510 and the federal Fair Labor Standards Act ("FLSA") for failure to pay them overtime. Plaintiffs' employer is a California agency that owns and manages the Del Mar Fairgrounds and the Del Mar Horsepark.

The California Supreme Court affirmed the judgment of the Court of Appeal, holding that Serrano III permits a trial court to calculate an attorney's fee award from a class action common fund as a percentage of the fund, while using the lodestar-multiplier method as a cross-check on the selected percentage. In this case, the trial court did not abuse its discretion by cross-checking the reasonableness of the percentage award by calculating a lodestar fee and approving a multiplier over the lodestar of 2.03 to 2.13.Del Mar Fairgrounds/Horsepark Employees Are Exempt From Overtime Under The Amusement ExemptionMorales v. 22nd Dist. Agricultural Ass'n, 1 Cal. App. 5th 504 (2016)Jose Luis Morales and 177 other similarly situated plaintiffs sued their employer under Cal. Labor Code § 510 and the federal Fair Labor Standards Act ("FLSA") for failure to pay them overtime. Plaintiffs' employer is a California agency that owns and manages the Del Mar Fairgrounds and the Del Mar Horsepark.

Under federal law, and in neighboring states, employers and employees are allowed to adopt flexible work schedules such as four 10-hour days per week. However, California Labor Code section 510 requires employers to pay non-unionized employees overtime for any work in excess of eight hours in one workday – regardless of the number of hours worked in a week. This of course discourages employers from agreeing to flexible work schedules involving work in excess of eight hours per day.

not separated by at least 10 hours.If an employee agrees in writing to work shifts not separated by at least 10 hours, the employer must compensate the employee with premium pay for all hours in the second shift.If an overtime premium is paid for a shift, then is Predictability Pay due?Under the ordinance, employers shall provide predictability pay when a covered employee has agreed to a change in their work schedule after the advance notice requirements under the ordinance.The employee is entitled to one additional hour of pay at their regular rate for each change to a scheduled date, time, or location that does not result in a loss of time to the employee or does not result in additional work time that exceeds 15 minutes. An employee is entitled to one-half of the employee’s regular rate of pay for the time the employee does not work if the employer reduced the employee’s work time listed by at least 15 minutes.However, for any hours that the employer pays an overtime premium under California Labor Code section 510, the employer does not need to provide predictability pay.The Office of Wage Standards will also publish rules and regulations and a required posting for the ordinance.

otice of the employee’s work schedule by either: posting the work schedule in an accessible location visible to all employees; ortransmitting the work schedule electronically or through another method reasonably calculated to provide actual notice to the employee. Further, employees must provide written notice (which includes electronic communication) to an employee for any subsequent changes to the work schedule. Employees have the right to decline any hours, shifts, or work location changes not included in the work schedule. If an employee consents to work hours or shift changes not included in the work schedule, the consent must be voluntary and in writing.Current employees receive priority for additional work: Employers are required to offer current employees additional hours of work prior to hiring a new employee or temporary worker or using a staffing agency if: at least one employee is qualified to do the work; andthe additional work hours would not result in overtime under California Labor Code § 510. Employers must make this offer either in writing or by posting the offer in an accessible location visible to all employees at least 72 hours before hiring a new employee or engaging a staffing agency or temporary worker. Employees have 48 hours to accept the offer of additional hours in writing. If you receive written confirmation from all employees during the 72-hour waiting period stating that they are not interested in accepting the additional hours of work, you may immediately proceed with hiring new employees or retaining a contractor, temporary service or staffing agency. If more current employees accept the offer to work than hours are available, you may assign the hours using a fair and equitable distribution method (or as specified in the forthcoming rules and regulations). An employee who accepts the offer for additional hours is not entitled to predictability pay (see below) for those hours if it results in a schedule change.Predictability pay: Employers must provide