Executive Summary: After a years-long battle, the California Supreme Court finally issued a ruling defining what it means for an employer to provide a rest break to non-exempt employees under California law: rest breaks cannot be “on-duty” or “on-call,” as employers must relieve their employees of all duties and relinquish any control over how employees spend their break time. This includes a prohibition against requiring employees to keep work cell phones, pagers, and walkie talkies on during breaks, but it may also prohibit other policies such as requiring employees to stay on the premises during breaks or single/limited staffing models.

In Augustus v. ABM Security Services, Inc., the plaintiffs were security guards who sued their employer for, among other things, failing to provide completely off-duty rest breaks, claiming that as a company policy and practice they were required to keep their pagers and walkie talkies on during their rest breaks in case of emergencies or to address the needs of ABM’s clientele. After granting class certification, the trial court granted summary judgment in the plaintiffs’ favor, finding ABM liable and awarding the plaintiffs approximately $90 million. However, the Court of Appeal reversed, reasoning that state law does not require rest periods to be “off duty” and that simply being “on call” does not constitute actual work. The plaintiffs appealed to the California Supreme Court.

Reviewing the legislative history of California Labor Code section 266.7 and the Industrial Welfare Commission’s applicable Wage Order regarding rest breaks, the California Supreme Court first looked at whether state law requires employers to authorize off-duty rest periods—meaning, time during which an employee is relieved from all work-related duties and free from the employer’s control. Revisiting the standard regarding off-duty meal periods in Brinker Restaurant v. Superior Court (2012) 53 Cal. 4th 1004, and drawing on the common understanding of the term “rest period” (that a reasonable person would interpret “rest period” to mean an interval of time free from labor, work, or any other employment-related duties), the Supreme Court concluded that such an understanding is consistent with Labor Code section 226.7 and the Wage Order. The Supreme Court also noted that unlike meal periods (for which employees can agree to an “on-duty” meal period and receive extra pay), there is no language in California law expressly permitting on-duty rest breaks. Thus it logically follows that all rest breaks must be off-duty—to require employees to take on-duty rest breaks would be requiring them to work for free, because the employee would be receiving the same amount of pay as they would during an “off-duty” rest break. Accordingly, during rest periods, employers must relieve employees of all duties and relinquish control over how employees spend their time.

The California Supreme Court next addressed whether an employer satisfies its obligation to provide an “off-duty” rest break when the employer requires its employees to remain on call. Noting that neither Labor Code section 226.7 nor the Wage Order expressly provides for “on-call” rest breaks, the Supreme Court found that compelling an employee to remain tethered to particular locations or work-related communication devices does not rationally comport with the obligation to relieve employees of all work duties and employer control during 10-minute rest periods, because, as was determined in resolving the first question, a rest period means an interval of time free from labor, work, or any other employment-related duties—to be freed from employer control over how the employee spends his or her time. Specifically with respect to ABM’s circumstances, requiring an employee to remain tethered to a radio or pager and be able to respond to calls immediately during rest breaks prevents the employee from taking a short walk, pumping breast milk, calling to arrange child care, and fulfilling other personal necessities that they cannot do during their work time.

Even though this ruling is unfavorable to employers, the California Supreme Court did hold that employers are not without options if the needs of the business require an employee to work during a rest break: employers may (a) provide employees with another rest period to replace one that was interrupted, or (b) pay the premium pay of one hour at the employee’s regular rate under Labor Code section 226.7 and the Wage Order.

Employers' Bottom Line:

In California, employers are required to provide duty-free rest breaks to their employees during which all control must be relinquished, such that employees are free to spend their rest breaks as they choose—including turning off communication devices and leaving the premises. The decision will likely have an impact on employers who operate on single or limited staffing models (e.g., one clerk per store), because it may require either adding more employees to payroll to ensure coverage or temporarily shutting down operations during rest breaks. The decision makes the law more onerous for employers because of a likely increase in paying premiums for missed rest breaks, likely forcing employers to change policies and practices and to pay more attention to whether and how their employees are actually taking their breaks.