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On July 15, 2021, the California Supreme Court issued a decision in In sum, the Court held that when employers pay one-hour meal and rest period premiums to employees who report that they were not provided compliant meal or rest periods, the pay is not at the employee’s normal “base” hourly rate but must be at the same FLSA “regular rate” that is used to calculate overtime premiums. Thus, paying employees meal and rest period premiums at their base hourly wage is no longer acceptable. Employers must now account for not only base hourly wages, but also other non-discretionary payments for work performed by employees, when determining the rate of pay for meal and rest period premiums, including shift premiums, commissions, incentive payments, and non-discretionary bonuses. This opinion announced a standard that very few employers have practiced, which likely means that many California employers will need to make significant payroll and policy changes as quickly as practi

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