On September 26, 2019, a California court of appeal in Naranjo v. Spectrum Security Services, Inc. answered several important questions that arise in class action lawsuits alleging meal period violations under Labor Code section 226.7. The company’s policy required its security guards to take on-duty meal periods for which they were paid at their regular hourly rate of pay. It did not pay a one-hour premium for each workday the noncompliant meal period policy was in effect and such was not reflected on employees’ pay stubs.
The Naranjo court held that 1) at-will, on-call, hourly, nonexempt employees who are paid for on-duty meal periods are also entitled to premium wages if a valid on-duty meal period agreement is not in place; 2) unpaid premium wages for meal period violations accrue prejudgment interest at seven percent; 3) unpaid premium wages for meal period violations do not entitle employees to additional remedies, such as “waiting time penalties” or penalties for inaccurate wage statements if their pay or pay statements during the course of the violations include the wages earned for on-duty meal periods, but not the unpaid premium wages; 4) attorney fees pursuant to Labor Code section 226(e) may not be awarded; and 5) the trial court erred in not certifying a “rest break” class where the company’s policy required its guards to remain “on call” during rest periods in case of an emergency.