Important Legislative Updates from NPA:

• California Parking Operators Should Be Aware of Potential for
  'Meal and Break Period' Lawsuits
• Update on H.R. 800, "The Employee Free Choice Act" [June 27, 2007]
• H.R. 800, "The Employee Free Choice Act" [June 18, 2007]
• Access Board Releases Draft Revisions to Guidelines for Buses and Vans
  [April 28, 2007]
• Maryland Legislature Approves Living Wage Mandate for Employees
  on State Contracts
• H.R. 800, "The Employee Free Choice Act"
• Minimum Wage Update

California Parking Operators Should Be Aware of Potential for 'Meal and Break Period' Lawsuits

In California, an employer generally may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes, except that if the total work period per day of the employee is no more than six hours, the meal period may be waived by mutual consent of both the employer and employee, but only in a very limited and specific way. A second meal period of not less than 30 minutes is required if an employee works more than 10 hours per day, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and employee only if the first meal period was not waived. This obviously presents a challenge to many parking operators, due to the nature of the business, staffing at facilities and the desires of employees.

According to the California Department of Industrial Relations, unless the employee is relieved of all duty during his or her 30 minute meal period, the meal period shall be considered an "on duty" meal period that is counted as hours worked which must be compensated at the employee's regular rate of pay. An "on duty" meal period shall be permitted only when the nature of the work prevents an employee from being relieved of all duty and when by written agreement between the employer and employee an on-the-job paid meal period is agreed to. The written agreement must state that the employee may, in writing, revoke the agreement at any time. The test of whether the nature of the work prevents an employee from being relieved of all duty is an objective one. An employer and employee may not agree to an on-duty meal period unless, based on objective criteria, any employee would be prevented from being relieved of all duty based on the necessary job duties. The Department states that some examples of jobs that fit this category are a sole worker in a coffee kiosk, a sole worker in an all-night convenience store, and a security guard stationed alone at a remote site.

California Labor Code Section 226.7 generally provides that if an employer fails to provide its non-exempt employees with meal periods or rest breaks, the employee is entitled to "one hour of pay" for each missed break. Over the years, courts have been divided over whether this "one hour of pay" is a "penalty" imposed on the employer (subject to a one year statute of limitations), or whether the pay is a "wage" for time worked (subject to a three-year statute of limitations, and possibly up to four years if the claim is brought under the California Unfair Competition Law). On April 16, 2007, the California Supreme Court decided in Murphy v. Kenneth Cole Productions that the "one hour of pay" is a wage subject to a three year "look back" recovery period, thereby expanding potential liability for employers.

This ruling has had a major impact on California employers on many different levels. First, this additional hour of pay is subject to tax withholding and employer taxes. Second, additional penalties could be imposed if an employer fails to pay terminated employees for all additional hours of pay for missed meal and rest breaks that occurred over the preceding three years. Third, plaintiffs' attorneys are seeking to recover attorneys' fees and costs if they prevail under another California statute. Obviously, California parking operators must continue to ensure that they comply with applicable meal and rest break requirements.

Several NPA members who have operations in California are defending investigations or lawsuits on meal and rest period issues. Some of these operators are attempting to form a coalition to explore possible legislative or administrative solutions to this issue and would appreciate feedback from operators in other parts of the country. If you are or have been involved in litigation over this issue, and/or if you would like to be part of a group that seeks a resolution that appreciates the unique challenges of the parking industry, please contact Marty Stein at mstein@npapark.org.

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