In a unanimous decision issued on April 16, 2007, the California Supreme Court resolved a split among the Courts of Appeal and held that the remedy provided in Labor Code Section 226.7 (“one additional hour of pay” for violations of mandatory meal and rest period requirements) constitutes a “wage” or “premium pay”, and is governed by a three year statute of limitation s. See, Murphy v. Kenneth Cole Productions, No. S140308, slip op. at p.1 (Cal. Apr. 16, 2007) (Slip Opinion Attached). In so holding, the Court reversed the Court of Appeal and overturned several related decisions which held that a one-year statute of limitations applied to violations of Section 226.7.
Section 226.7(a) provides that, “No employer shall require any employee to work during any meal or rest period mandated by an applicable order of the Industrial Welfare Commission.” Section 226.7(b) further provides that, “If an employer fails to provide an employee a meal period or rest period in accordance with an applicable order of the Industrial Welfare Commission, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each work day that the meal or rest period is not provided.” (Emphasis added.) The Court of Appeal held that the remedy provided by Section 226.7(b) constituted a penalty, and was therefore governed by a one-year statute of limitations. The Supreme Court disagreed, noting that the statutory language, the legislative history, and the compensatory purpose of Section 226.7 all compelled the conclusion that the “additional hour of pay” is a “premium wage intended to compensate employees, not a penalty,” and a three-year statute of limitations therefore applies to claims for meal and rest period violations. Id. at p. 22.