On February 16, 2011, in United Parcel Service, Inc. v. Superior Court, the California Court of Appeal held that Labor Code section 226.7 entitles employees to recover up to two additional hours of pay for meal period and rest period violations on a single work day, one for failure to provide a meal period and another for failure to authorize and permit a rest period.

 Labor Code Section 226.7

The plaintiffs sued United Parcel Service, Inc. (“UPS”), alleging they were not provided meal and rest breaks in accordance with California law. Plaintiffs sought compensation pursuant to Labor Code section 226.7, which provides:

(a) No employer shall require an employee to work during any meal or rest period mandated by an applicable order of the Industrial Welfare Commission.

(b) If an employer fails to provide an employee a meal period or rest period in accordance with an applicable order of the Industrial Welfare Commission, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each work day that the meal or rest period is not provided.

Case Background

UPS sought a pretrial determination from the trial court on the number of daily payments recoverable under Labor Code section 226.7. UPS argued that section 226.7 allowed only one premium payment per day, while the plaintiffs argued that up to two premium payments were allowed per day. The trial court, relying on Marlo v. United Parcel Service, Inc., a California federal district court case, agreed with the plaintiffs. UPS thereafter filed a request for appellate review.

The Appeal

To resolve the issue presented, the Court of Appeal had to determine if the California Legislature intended one or two premium payments per day under section 226.7. Because no published decision of a California court had addressed this issue, the Court of Appeal referred to and analyzed the Marlo court’s decision.

Because section 226.7 refers to “applicable order[s] of the Industrial Welfare Commission,” the Marlo court referred to the text of the IWC wage order, which includes separate remedies sections for meal break and rest break violations, implying two separate payments per day are allowed. The Marlo court, however, found the structure of the wage order inconclusive in deciphering the Legislature’s intent because only the portions of section 226.7 explaining when violations occur refer to the IWC wage orders. The portions that dictate what an employer must pay, on the other hand, do not reference the IWC wage orders. Ultimately, although the Marlo court found the legislative history inconclusive, it found that allowing an employee to recover an additional hour of pay for both meal and rest break violations was not contrary to the “work day” language in section 226.7.

The Court of Appeal agreed with the Marlo court, but found the language of the Wage Order determinative. The court noted that the Legislature originally introduced AB 2509, the bill that would eventually become section 226.7, at the same time the IWC adopted its two separate remedy provisions for meal and rest break violations. Moreover, section 226.7’s legislative history indicated that revisions to AB 2509’s remedies were intended to track the IWC wage orders. Finally, AB 2509’s author indicated that the bill codified the “actions of the IWC.” Based on this legislative history, the court concluded that “there can be no doubt that the Legislature was aware of the IWC wage orders in enacting section 226.7.”

As a result, the court found the IWC Wage Orders’ provision of separate remedies for violations of meal period and rest period requirements controlled, and held that up to two additional hours of pay per work day are recoverable under section 226.7.

What United Parcel Service Means For Employers

Because of the court’s holding that section 226.7 permits the recovery of up to two additional hours of pay per work day for missed meal and rest breaks, it is essential that employers remain vigilant in providing both meal and rest breaks. Otherwise employers may face double exposure in cases involving claims for both meal and rest break violations