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Meal And Rest Period Payments Under Labor Code Section 226.7 Are “Wages”

April 17, 2007

By Jeff Grube and KirWilcox

On April 16, 2007, the California Supreme Court in Murphy v. Kenneth Cole settled a much-litigated question under the California Labor Code by ruling that payments mandated by Labor Code sec. 226.7 for meal and rest period violations are “wages.”  The effect of the holding is that claims brought under sec. 226.7 are subject to a three-year limitations period (rather than a one-year limitations period for “penalties”). Employers should anticipate that plaintiffs will claim the statute of limitations extends to four years with the addition of a claim under Business and Professions Code sec. 17200. This Client Alert discusses the Murphy case and the implications for California employers.