Many California employers know they owe one hour of premium pay when a compliant meal or rest break is not provided. Far fewer understand how that hour must be calculated.
The premium is paid at the employee’s regular rate of compensation—not simply the employee’s hourly rate. If an employee earns nondiscretionary bonuses, commissions, shift differentials, or other compensation included in the regular rate, those amounts generally must be factored into the premium calculation.
An employer can have perfect time records and still underpay meal and rest break premiums by using the wrong rate. That seemingly small payroll error can become an expensive class action or PAGA claim. It is worth reviewing your payroll practices.