Ferra v. Loews Hollywood Hotel, LLCAnnotate this Case
The Supreme Court held that "regular rate of compensation" under Cal. Lab. Code 226.7(c), like "regular rate of pay" under Cal. Lab. Code 510(a), encompasses all nondiscretionary payments, such that the calculation of premium pay for a noncompliant meal, rest, or recovery period, like the calculation of overtime pay, must account for not only hourly wages but also for nondiscretionary payments for work performed by the employee.
Plaintiff, who was employed by Defendant as a bartender, filed a class action suit alleging that Defendant, by omitting nondiscretionary incentive payments from its calculation of premium pay, failed to pay her for noncompliant meal or rest breaks in accordance with her "regular rate of compensation," as required by section 226.7(c). The trial court granted summary adjudication for Defendant, concluding that "regular rate of compensation" in section 226.7(c) is not interchangeable with the term "regular rate of pay" under section 510(a), which governs overtime pay. The court of appeal affirmed. The Supreme Court reversed, holding that the term “regular rate of compensation” in section 226.7(c) has the same meaning as “regular rate of pay” in section 510(a) and therefore encompasses all nondiscretionary payments for work performed by the employee, not just hourly wages.