Four Mistakes Food Processors Make in California

The Golden State has higher wage and hour practices than federal standards.

By Brett Sutton, Sutton & Hatmaker

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When it comes to employment law, California is one of the most litigious states in the U.S. Businesses that are based outside of California, including those in the food & beverage processing industry, often assume that the wage and hour practices they follow in other states are also legal in California. This often results in costly damages and penalties being imposed against the employer.

California's rules are different than most of the country in many respects. The four most common areas where out-of-state businesses get into trouble in California are: wage orders, meal periods, vacation accrual and daily overtime.

Wage orders
On wage and hour issues, most states follow the Fair Labor Standards Act (FLSA). California's wage and hour laws are found in its Labor Code and are enforced by the Dept. of Industrial Relations, Div. of Labor Standards Enforcement -- commonly known as the Labor Commissioner (www.dlse.ca.gov).

Most out-of-state employers are not aware that, in addition to its Labor Code, California created an Industrial Welfare Commission that issues wage orders based on industry and occupation, each of which includes wage and hour rules specific to the designated industry and occupation. These wage orders have the force of law, and all applicable wage orders to a business must be posted onsite. The wage orders may be found at www.dir.ca.gov/iwc/wageorderindustries.htm.

Most food processing facilities located in California are subject to wage order No. 8, but it is important to review the operations of each facility with California legal counsel to ensure the correct wage order is being used.

Mandatory meal periods
Under the FLSA, employers are not required to provide employees with a meal period. In contrast, California law requires that all non-exempt employees (typically non-management, hourly employees) are provided with at least one meal period each workday that meets the following stringent requirements:

  • The meal period must be at least 30 consecutive minutes in duration. Any time necessary to change into/out of a uniform, to sanitize or to do anything else necessary to leave the premises must be on-the-clock and outside the 30-minute meal period.
  • During the meal period, the employee must be relieved of all work duty and be allowed to leave the work premises.
  • The meal period is mandatory for any day the employee works five or more hours, but may be waived by the employee if he/she completes the workday in six or fewer work hours.
  • When the employee works 10 hours or more in a work day, the employer must provide a second meal period, which may be waived by the employee if he/she completes the workday in 12 or fewer work hours. The second meal period cannot be waived if the employee works more than 12 hours in a workday, or if the employee did not take the first meal period that day.
  • The employer must maintain records of all meal periods, reporting the time each meal period began and ended.
  • Failure to comply with California's meal period rules entitles each employee who was not provided with such a meal period to an additional wage of one hour per day at his or her regular rate of pay, reaching back four years from the date the employee files a lawsuit.

The timing of the mandatory meal periods during the workday is currently the subject of a case pending before the California Supreme Court [Brinker Restaurant Corp. v. Superior Court of San Diego County (Hohnbaum]). The Labor Commissioner's current position on the timing of meal periods during the workday may be found in a memorandum issued by the Labor Commissioner on Oct. 23, 2008, found at www.dir.ca.gov/DLSE/CourtRulingsMemo-Brinke-10.23.08.pdf.

Vested vacation accrual
Many businesses have a "use it or lose it" policy, meaning that an employee must use his/her vacation within a certain period of time or he/she will forfeit that accrued vacation time. This type of policy is illegal in California.

In California, once an employee accrues vacation time under an employer's policy, that time is "vested" and is considered earned wages. It cannot be forfeited. Violation of this rule subjects the employer to monetary penalties as well as repayment of the forfeited wages.

Daily overtime
Under the FLSA, employees are entitled to overtime when they work more than 40 hours in a workweek. However, California also requires that non-exempt employees must be paid overtime for any workday in which the employee works more than eight hours and double time for any hours worked in excess of 12, regardless of how many hours the employee works in that workweek.

Food processors need to ensure that they follow state rules in California that exceed the requirements of the federal rules, so that they avoid costly penalties and potential employee lawsuits.

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