Why it matters
What happens when California’s Labor Code and wage orders collide? Considering Section 11(D) of Wage Order 5 as applied to meal periods for healthcare employees in the context of Sections 512(a) and 516 of the Labor Code, a state appellate court held that the workers cannot waive their statutory right to a second meal period when they work more than 12 hours per day. State labor law requires that employees who work more than 10 hours in a workday must receive two 30-minute meal periods, although Section 11(D) permits employees to waive the second break if the workday is not longer than 12 hours and the first period was not waived. Three former hospital employees filed a putative class action claiming that the two provisions were in conflict and that the Labor Code trumped, mandating pay for their missed meal breaks. A trial court sided with the hospital but the appellate panel reversed, holding that the more permissive wage order was partially invalid and finding that retroactive application on the issue was appropriate. Employers in the healthcare industry would be well served to review their policies on meal periods and update them in light of the decision; in addition, those employers that make use of meal period waiver agreements should check to make sure the second meal period is not waived for shifts of more than 12 hours.
Three healthcare employees filed suit against Orange Coast Memorial Medical Center, seeking to represent a class of workers that waived their rights to a second meal period on days they worked shifts of more than 12 hours.
California Labor Code Section 512(a) provides: “An employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.”
Section 516 adds: “Except as provided in Section 512, the [IWC] may adopt or amend working condition orders with respect to break periods, meal periods, and days of rest for any workers in California consistent with the health and welfare of those workers.”
The plaintiffs argued that Section 11(D) of the Industrial Welfare Commission’s (IWC) Wage Order 5—which states: “Notwithstanding any other provision of this order, employees in the health care industry who work shifts in excess of eight (8) total hours in a workday may voluntarily waive their right to one of their two meal periods”—operates in conflict with the Labor Code.
The wage order sanctions second meal period waivers for healthcare employees who work shifts of more than 12 hours, the workers said, but the Labor Code permits such waivers only if the total hours worked is no more than 12 hours.
Alternatively, the hospital told the court that it utilized valid meal period waivers in compliance with state law.
But the appellate panel disagreed, reversing summary judgment for the hospital.
When the validity of an IWC wage order is conceded, courts will provide extraordinary deference. However, when the validity of a wage order is challenged, no such deference is due, the court said.
By creating an additional exception for healthcare workers to waive a second meal period even in shifts of more than 12 hours, the IWC exceeded its authority with Wage Order 5, the panel said. The wage order conflicts with the Labor Code, specifically Section 512(a), which limits second period meal waivers to shifts of 12 hours or less.
Such an additional exemption might be implied from clear legislative intent, but a review of the legislative history of Sections 512 and 516 turned up nothing to support the IWC’s stance in Wage Order 5, the panel said, citing language from the California Supreme Court’s 2012 decision in Brinker Restaurant Corp. v. Superior Court that “as to the majority of its 2001 wage orders, the IWC did not intend to impose a different meal period requirement than that spelled out in section 512.”
“We see nothing in this legislative history to support the hospital’s argument the additional regulatory exception embodied in section 11(D) for shifts longer than 12 hours is consistent with the Legislature’s intent,” the panel wrote. “To the contrary, everything in this legislative history evidences the intent to prohibit the IWC from amending its wage orders in ways that conflict with meal period requirements in Section 512, including the proviso second meal periods may be waived only if the total hours worked is less than 12 hours.”
The court rejected the hospital’s contention that Section 512 and Wage Order 5 were not in conflict and that the wage order was “final and conclusive for all purposes,” language which referred to the IWC’s purposes. Brinker itself did not confirm the validity of second meal period waivers, the court added, as that decision did not decide the current issue.
The broad powers of the IWC do not extend to the creation of additional exemptions from the meal period requirement beyond those provided by the legislature, the panel wrote, concluding that the IWC exceeded its authority and declaring that Wage Order 5 is partially invalid to the extent it authorizes healthcare workers to waive their second meal periods on shifts longer than 12 hours.
As for retroactive application, the panel said the issue should be litigated on remand—with one exception. “[E]mployers in this state have been on clear notice, pursuant to sections 512(a) and 516, they were required to provide health care workers with a second meal period when they worked more than 12 hours in a day,” the court wrote.
Despite recognizing a reluctance to punish employers for conduct “apparently authorized by the IWC,” the panel said employers have received the benefit of employees working without the statutorily mandated second meal periods and “there is nothing unfair about requiring hospitals to compensate them for that time.”
Therefore, the plaintiffs were entitled to seek premium pay pursuant to Section 226.7 of the Labor Code for any failure by the hospital to provide mandatory second meal periods within the three-year statute of limitation period.
To read the opinion in Gerard v. Orange Coast Memorial Medical Center, click here.