IR #2004-17
Wednesday, December 10, 2004

Dean Fryer

Meal and Rest Period Rules for California Workers Clarified by the State Department of Industrial Relations

SAN FRANCISCO - The California Division of Labor Standards Enforcement (DLSE), a division of the Department of Industrial Relations (DIR) today filed regulations with the Office of Administrative Law that will provide workers more flexibility in taking meal and rest periods and clarify penalty assessments paid to workers by noncompliant employers.

"The penalty issue has been of increasing concern because conflicting interpretations of the statutory language have resulted in costly litigation, including class action suits in the courts over whether the award is a penalty or a wage," said John Rea, acting director of DIR. "The emergency regulations that the DLSE has filed today are intended to alleviate any further confusion."

Until now, the (DLSE) had enforced a staff opinion letter that deemed the "one-hour of pay" (required as an award to the employee for the employer's failure to abide by the law) to be wages, rather than a penalty. However, the history of Labor Code section 226.7 clearly indicates that the payment was meant to be a penalty.

As a penalty, the payment is subject to a one-year statute of limitations. "This should result in speedier resolution of these claims. Because the payment to the employee is considered a penalty under the new regulations, it is not subject to income tax withholding as it would be if it were deemed to be a wage," Rea said.

Further, the employee wage tax liability has been on the entire amount even if attorneys' fees consumed a considerable portion of the award.

The second area of law clarified by the new regulations relates to the time parameters in which meal periods can be taken.

In prior opinion letters, DLSE staff interpreted the Labor Code and the Industrial Welfare Commission (IWC) Orders to require an employer to start the employee 30-minute meal period before the end of the fifth hour after the start of the workday. This interpretation has resulted in the imposition of penalties on employers even in cases where the employee's meal period was scheduled to begin, for example, five minutes after the fifth hour of the workday. As a result, employers often force employees to take meal periods within those constraints, even when the employee has no desire to stop work in order to eat or rest at such specific times.

"DLSE advised that this interpretation was based on a literal application of the language contained in the IWC Orders, without reference to the statutory intent," Rea said. "Labor Code 512(a) and (b) gave the IWC the specific authority to address meal periods which begin after the sixth hour, but not for meal periods occurring prior to the sixth hour" he added, "and as the State entity charged with enforcing Labor Code provisions, DLSE has the authority to interpret the provisions dealing with meal periods which occur between the beginning and the sixth hour of the workday."

Under the new regulations an employer will be deemed to have provided a meal period to an employee in accordance with the Labor Code Section 512 if the employer makes the meal period available to the employee and affords the employee the opportunity to take it; posts the applicable order of the Industrial Welfare Commission; and maintains accurate time records for covered employees, as required by the posted Order. A further section of the regulation invites the employer to document that meal periods have been provided in accordance with Section 512, by informing employees of the circumstances under which they are entitled to a meal period and having them acknowledge in writing that they understand those rights.

"Overall, DLSE's new regulations governing meal periods will allow more flexibility for both employers and employees," Rea said, "This change will come as a great relief to workers and employers in many industries where the lack of flexibility has had negative consequences on earned income and scheduling abilities."

The Office of Administrative Law has ten days in which to review the regulations filed today. If approved, they are slated to become effective on December 20, 2004. A copy of these emergency regulations can be found on the DIR website at