The California Court of Appeal, in a blow to employers, recently rejected UPS’s contention, in UPS, Inc. v. State of California, that state law only required one additional hour of pay when an employee missed both meal and rest breaks in the same day. Instead, the court held that California Labor Code Section 226.7 (“Section 226.7”) requires employers to pay employees who miss both a meal and rest period on the same day two additional hours of pay per day, one hour for failure to provide a meal period and another hour for failure to provide a rest period. Although the court admitted that Section 226.7 is susceptible to two alternative interpretations—one allowing a single premium payment for each work day and another permitting two payments for each work day—the court concluded it was more reasonable to construe the statute as allowing for two premium payments per work day, one payment for the failure to provide one or more meal periods and another payment for the failure to provide one or more rest periods. The decision marks the first time that a state appellate court has weighed in on the interpretation of Section 226.7 in a published opinion and potentially exposes employers to significant liability for missed meal and rest periods. In the wake of this decision, all California employers should review their policies and procedures to ensure that employees are receiving their required meal and rest breaks.