Skip Meals and Profit
A California wage statute requires employers to give employees an extra hour's pay on any day that the employee misses a required meal or break period. In other words, miss a fifteen-minute break, get an hour's pay. In Murphy v. Kenneth Cole Productions Inc., the court was asked whether the extra hour's pay was intended as compensation for employees or as a penalty for employers. In the first case, a three-year statute of limitations would apply to claims for the extra hour's pay. In the latter, claims would be subject to the stricter one-year statute.
Because the extra hour of pay is awarded with no reference to the actual amount of meal/break time an employee lost, one might think the award was intended to penalize employers for failure to comply with the statutory meal/break times. One would be wrong. The statute, according to the California Supreme Court, is all about compensating employees. Claims for the extra hour's pay therefore survive for three years. California employers are not amused:
Robert Tollen, who represented the defendant, Kenneth Cole Productions Inc., said the ruling could "easily" cost companies millions of dollars. Especially, he said, because of an ever-increasing number of wage-and-hour class actions in California.
"It's going to cost a lot of money," he said, "in a situation where there's not a significant degree of wrongdoing."
Although the case is thousands of miles from Pennsylvania, the moral of the story hits home: businesses need to be mindful of compliance issues in all aspects of their operations. As Kenneth Cole demonstrates, the cost of non-compliance with even the most trivial of regulations can be substantial.
