Posted on August 31st, 2021
Below is a complete transcript of this video.
What’s up fellow entrepreneurs is John Fagerholm again, and today I want to talk about premium pay and California Law on breaks, but first I’m a lawyer, but I’m not your lawyer. So please seek out competent legal counsel for your specific question or a legal issue.
Well, the California Supreme court finally resolved the question of what to include as premium pay. If an employee is required to be paid back meal arrest fix, unfortunately that did so at the risk and expense of California employers premium pay is the penalty payment, which must be made under labor code section two to 6.74 an employer’s failure to provide a compliant meal meal, rest or recovery period, and a 2019 case called Farrah vs. Low Hollywood hotel.
The court ruled that premium pay is equal to the regular rate of pay used for overtime payment purposes. Under the labor code, Farah expanded the previous rule that premium pay could be paid out at an employee’s base hourly rate.
With this new clarification in quotes, the regular rate of pay for premier pay is now includes all nondiscretionary payment during a pay period, including straight time shift differentials, peace rate compensation, commissions, and nondiscretionary bonuses.
This certainly creates a nightmare of complex and cumbersome scenarios. If there are any meal or breaks that are missed, but the biggest issue is that this clarification makes this law retroactive. Yikes.
The court explained their decision to make this law retroactive by saying that their ruling is a clarification of the definition of regular rate of pay and Farrah and not a new decision.
One of the things I dislike most about California is their willingness to make employers liable retroactively. It just isn’t good policy to create such uncertainty for businesses.
The takeaway from this video is that if there are any miss breaks going forward, employers are required to pay the premium pay at a rate equal to all of the employees income except for discretionary income and employers have to make premium payments at this new premium rate for all past miss breaks.
This is going to be a real mess.
All right, ladies and gentlemen, until next time be productive.
