You could be one of the most prestigious dining establishments in North America, but staying compliant and the menace of a class action lawsuit is always lurking on the sidelines.

In an employee friendly state like California, meal and rest period management is a job title in itself. On top of managing aspects of restaurant operations like payroll and scheduling, the simple task of sending employees on their breaks is one of the most tedious tasks.

Ensuring the daily roster is prepped to cover shifts and tracking, editing, and confirming regular and overtime hours for payroll can be a nightmare if employees’ consistently miss meal and rest periods or forget to clock in and out.

As advocates of making work easy, we’ve put together a quick guide to managing restaurant compliance in California:

Rest and Meal Periods

According to California’s Labor Code (Section 512), an employer must provide an employee who works more than five hours per day “…an [unpaid] meal period of not less than 30 minutes…”If the shift is no more than 6 hours, if mutually consented by both the employee and employer, the meal period can be waived.

California restaurant employers also must provide their employees a 10 minute paid rest period for each four hour shift. They should be taken, uninterrupted, and as close to the middle of their shift period as possible. Though the rest break is paid, the behavior of it’s requirements is just like a meal period. If a rest period is unprovided, the employee is entitled to one hour of their “regular rate” for each workday that the rest period is not permitted.

In short, for every 6 hour shift worked, an employee is eligible for a 10 minute paid and uninterrupted rest period and a 30 minute uninterrupted meal period, unless the meal or rest period is mutually waived by the employee and employer.

In the case where employees work a 10 hour shift, they are entitled to two meal periods at a full 30 minutes each.The second meal period may be waived only if the first period has not been waived, the shift is no longer than 12 hours, and with the consent of both the employee and employer.

Meal periods should be a full, undisturbed 30 minute meal period and they cannot be taken on a whim. Meal periods must be taken after the 3rd hour of work, and before the 5th hour of work. For shifts that last over 10 hours, the second meal period must be taken before the end of the tenth hour of the shift. This is where it gets complicated.

If an employer fails to provide a required 30 minute meal period within the designated time frame, an employee is entitled to one hour of pay at their “regular rate” for each workday the meal period is not provided; this is also known as meal period penalty.

An employee’s regular rate is calculated by taking their wages for the work day divided by the number hours worked.

Here’s an example:

 

Joe is scheduled to work 12pm to 5pm. His meal period needs to be between 3pm and 5pm, and his rest period should be as close to the middle of this shift, as possible. His manager schedules his meal period for 3:45pm and his rest period at 2:30

When Joe clocks in, two things can happen:

  1. Joe’s manager realizes that someone has called in sick. He asks Joe to remain in his section and waive his meal period, which Joe agrees too. As Joe has signed the waiver, and himself and his manager have mutually agreed for Joe to miss his rest period, Joe will now receive the one hour of his regular rate.In this instance, he is entitled to one hour of his regular rate:Base rate: $10 x 5 hours worked = $50
    $50/ 5 = $10 1 hr of regular rate meal penalty
  2. At 3:30pm, Joe is prompted by his manager to get ready to go on his meal period but he is in the middle of serving a large group. He decides that he will not go on his meal period break. In this case, as Joe was provided a meal period by his manager, but did not want to go, his employer does not owe him the premium pay.

Clock Entry Edits

Hand in hand with making sure employees take their breaks within their designated slots, is making sure they sign off on any changes.

Any changes to an employees clocked hours, without mutual understanding via heir verbal agreement or written permission, can be a slippery slope to a class action lawsuit. Especially if you’re adjusting hours.

And making adjustments to clock entries or employee pay can be for a lot of reasons, whether employees clock out after they’ve actually stopped working, or even if someone just simply forgot to clock out; any changes to employee hours and ultimately their pay, should be verified and mutually agreed too. Meaning, adjustments can’t be made on a whim, or in one-off cases. Your clock rounding policies should be fair, transparent and honest!

If you change employee’s clock time without their understanding or better yet, written agreement, this could also lead to a class action lawsuit.

Here’s an example:

In 2014, a class action lawsuit was filed in 3 different states by employees for hours being “shaved”. One of their claims was that their employer’s cut their time card hours to prevent overtime pay. Though it isn’t always the case, the lack of clarification between employer changes to employee hours can be blur the reasons behind clock edits.

Like the classic example of when employees forget to clock out. Receiving permission about clock adjustments isn’t about policing clock times. Rather, its a mutual understanding between employees and employers about what happened, and why it was changed.

Overtime Pay

In California, employees are entitled to either weekly overtime pay or daily overtime pay.

Weekly overtime refers to the hours worked over 40 hours in a work week. Any hours over 40 per work week (designated by the employer) will be considered premium pay; where an employees average rate is multiplied by 1.5.

Daily overtime refers to hours worked over 8 hours in a work day. Anything over 10 hours a day is subject to double overtime.

The premium pay is calculated by taking their average rate divided by the number of hours worked. This is only complicated when employees work multiple positions, or receive recurring bonuses, etc.

Generally, pyramiding or double dipping overtime hours is not allowed in California. This means employees receive the premium pay for whichever overtime amount (weekly or daily) totals to the greater amount.

For example:

Jane works Monday to Tuesday from 11am to 8pm, Wednesday from 10am to 6pm and from Thursday to Saturday she works 3pm to 12am.

Looking at daily overtime:

  • Monday at 8 regular hours + 1 hour overtime
  • Tuesday at 8 regular hours + 1 hour overtime
  • Wednesday at 8 regular hours
  • Thursday 8 regular hours + 2 overtime hours
  • Friday 8 regular hours + 2 overtime hours

Her daily overtime totals to: 6 hours

Looking at her weekly overtime:

  • Monday at 9  hours
  • Tuesday at 9  hours
  • Wednesday at 8 hours
  • Thursday at  10 hours
  • Friday at 10 hours

At 7pm on Friday, she’s reached her weekly OT threshold. Hours worked from 7pm – 12am will total to her weekly overtime amount.

Her weekly overtime totals to: 5 hours

In this case, Jane is owed 6 hours of overtime pay, which is calculated by 1.5 x her average rate, as it is the greater amount.

If she had worked multiple positions in that week, she will need to take the weighted average of her hourly rates to determine her overtime pay. 

Using the scenario from above:

Jane  worked as a host at $10/hour from Monday to Wednesday, and as a server at $9/hour on Thursday to Friday.

Her average rate is calculated by taking her hourly rate divided by the number of hours worked.

To calculate her overtime:

  • Monday to Wednesday as a host  = 17 hours  x  $10/hr = $170
  • Plus
  • Thursday to Friday as a server = 20 hours  x $9/hourly =$180
  • ($180 + $170) / 45 hours = $7.78/hour

($7.78 x  1.5) x 6 hours = $55.68 total overtime pay


In short, there are three things every restaurant owners need to be wary of:

  1. Meal and Rest Periods
  2. Clock Entry Edits
  3. Overtime Pay

Sounds simple enough right? However, until you’ve been entrenched in habit of managing 50 employees a night, on top of budgeting and guest experience, managing the simple aspect of time tracking isn’t easy.

Looking for tools that’ll help you combat break management and compliance? Learn more about automated break tracking and employee waiver document storage here.