UPDATE ON DLSE PROPOSED MEAL/REST PERIOD REGULATIONS

On December 10, 2004, the Division of Labor Standards Enforcement ("DLSE") proposed the adoption of emergency regulations that would drastically reform the current meal and rest period laws. On December 20, the DLSE withdrew the proposed emergency regulations and resubmitted a revised set of proposed regulations under the Administrative Procedure Act's ("APA") regular rulemaking process. This means that the proposed regulations will be subject to the regular APA procedures (over the next several months) which allow for public hearings and commentary before any new rules can go into effect.

Proposed Changes

The regulations, if adopted, would do the following: (1) establish criteria to determine if an employer has "provided" a meal period; (2) clarify that the initial meal period in a workday may commence at any point prior to the start of the sixth hour of work; and (3) clarify that the one hour of pay an employer must pay an employee for each workday in which a meal or rest period is not provided is considered a penalty and subject to a one year statute of limitations.

What must an employer do to "provide" a meal period?

Under the proposed regulations, an employer shall be deemed to have provided a meal period to an employee if the employer:

a. Makes the meal period available to the employee and affords the opportunity to take it; and

b. Posts the applicable order of the Industrial Welfare Commission; and

c. Maintains accurate time records for covered employees, as required by the posted order.

The DLSE recommends that, in addition to the above, employers inform employees in writing of the circumstances under which one is entitled to a meal period and obtain the employee's written acknowledgment that he/she understands those rights. Thus, if the proposed regulations become the law, an employer may satisfy the requirement of "providing" a meal period (even if an employee does not actually take a meal period), if the employer complies with (a)-(c) above. This stands in sharp contrast to the current law which places the burden on the employer to actively ensure that employees take a 30 minute meal period even if the employee does not want to do so.

When must an employee take a meal period?

In prior opinion letters, the DLSE opined that employers must provide an employee with a 30 minute meal period starting no later than the fifth hour after the start of the workday. This resulted in penalties on employers in cases where the employee's meal period was scheduled to begin only five minutes after the fifth hour of the workday. The DLSE recognized that, to avoid these penalties, employers have begun forcing their employees to take meal periods when they do not necessarily desire to do so. As a result, the DLSE seeks to clarify that an employer must provide an employee with the opportunity to take a meal break at any point prior to the start of the sixth hour of work.

Is the one hour of pay an employer must pay an employee for breach of the meal/rest period requirements a penalty or back wage?

The DLSE acknowledged that it has issued conflicting administrative opinion letters on this issue, sometimes stating that the one hour of pay should be interpreted as a wage and other times stating that it was a penalty. Accordingly, the DLSE seeks to clarify that the one hour of pay is a penalty and, accordingly, subject to a one year statute of limitations. This dramatically reduces an employer's scope of liability because, if treated as a "back wage," a three (or possibly four) year statute of limitations would apply.

Status of Proposed Regulations

According to the Office of Administrative Law, until the proposed regulations are adopted, there is no change in the current laws governing meal and break periods. The DLSE has, however, withdrawn several opinion letters that address the issues raised by the proposed regulations.

The DLSE has scheduled three public hearings on the proposed regulations: 

· Los Angeles: February 4, 2005 at 9:00 a.m., Ronald Reagan State Building
· San Francisco: February 8, 2005 at 9:00 a.m., Hiram Johnson State Building
· Fresno: To Be Announced

In addition, the public may comment in writing through February 14, 2005.

Under the APA, the DLSE must consider all relevant information presented during the public comment period before taking action. Thereafter, the DLSE may make changes to the proposed regulations which, depending on their scope, may trigger another public comment period. This process will continue until the DLSE either adopts or abandons the proposed regulations. If the DLSE adopts the regulations, they become effective once the Office of Administrative Law reviews and approves them for compliance with the APA.