Last week, the Schwarzenegger administration proposed immediately implementing new regulations that would create a safe harbor for employers from meal and rest period rule violations.  To justify immediate implementation, the Division of Labor Standards Enforcement ("DLSE") had classified the draft regulations as "emergency" measures.  After receiving a high volume of calls protesting immediate implementation, the Schwarzenegger administration changed course and is now pursuing permanent implementation through the normal process, including a period of public comment in early February.

The proposed regulation would be a major step in the effort to reduce class action lawsuits in the area of Wage and Hour law because it endeavors to protect employers who are being targeted by class action lawsuits for even small infractions of the meal and rest period rules.  If adopted, the proposed effect of the new regulations is three-fold.  First, the new rule would create a safe harbor from alleged meal and rest break violations if employers give employees notice of rights to breaks and receive signed acknowledgements from their employees that they understand those rights.  Second, the new rule would provide more flexibility in scheduling meal breaks by allowing them to begin as late as the end of the fifth hour of work.  Third, by redefining violation awards as penalties, rather than wages, the new rule would reduce the statute of limitations from three years to one year for employees to bring a claim for violation of the meal and rest period rules. 

Traditionally, the DLSE found that employers violated meal break rules if their employees failed to take the breaks despite the employer’s encouragement.   Employers bore the obligation to ensure that employees actually took breaks.  Under the new rule, employers are presumed to be in compliance if they inform employees of their entitlement to meal periods and obtain a written acknowledgement from the employee that he or she understands those rights.  The new regulations do not address the degree to which the employer must interfere with exercise of the meal period before a violation will be deemed to have occurred, regardless of compliance with this notification requirement. 

The second component of the new rule states that the initial meal period may commence at any point before the start of the sixth hour of work.   The Labor Code § 512(a) (“Section 512”) and the Industrial Welfare Commission Orders specify that employees cannot work more than five hours without taking a thirty minute meal period.  The DLSE previously interpreted Section 512 to require that this meal period start by the fifth hour after the start of the workday.  Under the new rule, the meal period requirement is satisfied as long as the meal period begins by the sixth hour of work rather than the fifth. 

Third, the new rule clarifies Labor Code § 226.7(b), which requires one additional hour of pay at the employee’s regular rate of compensation for each work day that an employer fails to provide meal or rest periods.   Until now, the DLSE characterized these payments as wages, which implicated a three year statute of limitations.  Under the new regulation, any amount paid or owed by the employer to the employee for failure to provide a meal period will constitute a penalty claim, which implicates the one year limitations period applicable to statutory penalties. 

If these new regulations are adopted, employers should immediately issue written notice to all employees explaining the circumstances under which an employee is entitled to meal breaks and require that all employees acknowledge in writing that they understand these rights.  Employers may also wish to reconsider their current meal period schedules in light of the liberalization of time within which breaks must be taken.  Employers should also ensure that they maintain dependable records of the times that employees take meal and rest breaks.