On May 23, 2022, the California Supreme Court finally resolved the issue of whether premium pay for missed meal and rest periods constitutes wages such that they give rise to claims for waiting time penalties and inaccurate wage statements. In short, it does.

In Naranjo v. Spectrum Security Services, Inc., the Court of Appeal had held that the security officer plaintiffs were not entitled to pursue these “derivative” claims for violations of California’s meal and rest break laws. The Supreme Court reversed the decision, holding that premium pay for missed meal and rest breaks are wages. This means that meal and rest break premium payments must be separately itemized on employee wage statements, and employees can recover waiting time penalties for unpaid meal and rest break premium payments upon termination or resignation.

The decision greatly increases the exposure of California employers for failure to strictly adhere to California’s wage and hour laws. Where employers do not properly record or pay missed meal and rest period premium pay, those employers will likely find themselves defending individual and class actions seeking waiting time and inaccurate wage statement penalties.