JESSICA FERRA et al., Plaintiffs and Appellants, v. LOEWS HOLLYWOOD HOTEL, LLC, Defendant and Respondent.
B283218
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION THREE
Filed 10/9/19
CERTIFIED FOR PUBLICATION; Los Angeles County Super. Ct. No. BC586176
APPEAL from a judgment of the Superior Court of Los Angeles County, Kenneth R. Freeman, Judge. Affirmed.
Ballard Rosenberg Golper & Savitt, Richard S. Rosenberg, John J. Manier and David Fishman for Defendant and Respondent.
Blank Rome, Laura Reathaford, Brock Seraphin; Lathrop Gage and Laura Reathaford for Association of Southern California Defense Counsel as Amicus Curiae on behalf of Defendant and Respondent.
_________________________
Does “regular rate of compensation” for calculating meal or rest break premium payments mean the same thing as “regular rate of pay” for calculating overtime premium payments, and does facially neutral “rounding” of employee work time systematically undercompensate Jessica Ferra and a class of employees of Loews Hollywood Hotel, LLC (Loews)? We agree with the trial court that the phrases have different meanings, and Loews‘s facially neutral rounding policy does not systematically undercompensate Loews employees.
BACKGROUND
On October 7, 2015, Ferra filed a first amended complaint against Loews on behalf of herself and three alleged classes of hourly Loews employees extending as far back as June 26, 2011. Among other causes of action, Ferra alleged Loews improperly calculated her premium payment when Loews failed to provide her with statutorily required meal and/or rest breaks, in violation of
The parties stipulated that Ferra worked as a bartender for Loews from June 16, 2012 to May 12, 2014, and Loews paid
(and continued to pay) meal and rest period premiums to hourly employees at their base rate of compensation (their hourly wage), without including an additional amount based on incentive compensation such as nondiscretionary bonuses. The trial court ordered that, on those stipulated facts, it would summarily adjudicate under
After briefing and a hearing, on February 6, 2017, the trial court issued an order granting the motion for summary adjudication, concluding: “[T]he terms ‘regular rate of compensation’ and ‘regular rate of pay’ are not interchangeable. . . . [R]est and meal period premiums under
Loews also filed a motion for summary judgment on Ferra‘s remaining causes of action, arguing that Loews‘s “rounding” policy and practice did not result in underpayment of hourly employees, and any alleged underpayments were de minimis.
After briefing and a hearing, on April 24, 2017, the trial court issued an order granting summary judgment, concluding that on the undisputed facts, “Loews‘s [rounding] policy is neutral on its face and as applied” and did not “fail[ ] to compensate the employees for hours worked.” The trial court declined to address as unnecessary Loews‘s alternative argument that any underpayments were de minimis.
The court granted in full Loews‘s motion for summary judgment. Judgment was entered May 11, 2017, Loews served notice of entry of judgment on May 19, 2017, and Ferra filed this timely appeal from the summary adjudication and summary judgment.
DISCUSSION
If after an independent review of the record and the applicable law, we agree with the trial court that undisputed facts show there is no triable issue of material fact and Loews, as the moving party, was entitled to judgment as a matter of law, we must affirm the trial court‘s grant of summary adjudication and summary judgment. (
1. “Regular rate of compensation” means the employee‘s base hourly wage
an employee a meal or rest period, “the employer shall pay the employee one (1) hour of pay at the employee‘s regular rate of compensation for each workday that the [meal or rest] period is not provided.” (IWC Wage Order No. 5-2001, subds. 11(B), 12(B) (
a workweek shall be compensated at the rate of no less than twice the regular rate of pay of an employee.” (Italics added.) The overtime provisions in Wage Order No. 5-2001, subdivision 3(A) mirror the statutory language, stating that overtime work must be compensated at either one and one-half times or double “the employee‘s regular rate of pay for all hours worked.” (Italics added.) “[T]he extra amount a worker must be paid, on top of normal pay, because certain work qualifies as overtime” is also called a premium.
California case law does not define the meaning of “regular rate of compensation” in
“regular rate of compensation” are not synonymous, and the premium for missed meal and rest periods is the employee‘s base hourly wage.
a. The statutes’ plain language differentiates “regular rate of compensation” from “regular rate of pay”
The basic principle of statutory construction is “that we must look first to the words of the statute, ‘because they generally provide the most reliable indicator of legislative intent.’ ” (Murphy, supra, 40 Cal.4th at p. 1103.) We must “give[ ] significance to every word, phrase, sentence and part of an act.” (Flowmaster, Inc. v. Superior Court (1993) 16 Cal.App.4th 1019, 1028.) ” ‘Wage orders are quasi-legislative regulations and are construed in accordance with the ordinary principles of statutory interpretation.’ ” (Vaquero v. Stoneledge Furniture, LLC (2017) 9 Cal.App.5th 98, 107.) We should avoid a construction of the wage order or statute that renders any part meaningless, inoperative, or superfluous. (Ibid.; Shoemaker v. Myers (1990) 52 Cal.3d 1, 22.) “[S]tatutes governing conditions of employment are to be construed broadly in favor of protecting employees. [Citations.] Only when the statute‘s language is ambiguous or susceptible of more than one
“Where different words or phrases are used in the same connection in different parts of a statute, it is presumed the Legislature intended a different meaning.” (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1117.) Ferra argues that the two phrases have the same meaning because both include the words “regular rate.” Ferra thus urges us to construe only the phrase “regular rate,” as used in the
in the statutes and wage orders establishing premiums for overtime and for missed meal and rest periods.
Ferra also points out that
further evidence that the Legislature did not intend
b. Legislative history does not compel the conclusion that “regular rate of compensation” and “regular rate of pay” are synonymous and interchangeable
Although we do not believe the statutes’ use of different definitions for the different premiums is ambiguous, we note that Ferra‘s resort to the legislative history does not require us to conclude that “regular rate of compensation” is the same as “regular rate of pay.” Ferra acknowledges the legislative history does not define the two phrases, but points to the regulatory history of the wage order revisions in which the IWC adopted the hour premium for rest and meal period violations, quoting the use in Murphy, supra, 40 Cal.4th 1094, of a commissioner‘s statement at a “June 30, 2000 hearing at which the IWC adopted the ‘hour of pay’ remedy.” (Id. at pp. 1109-1110.) The commissioner stated: ” ‘This [meal and rest pay provision applies to] an employer who says, “You do not get lunch today, you do not get your rest break, you must work now.” That is—that is the intent. . . . And, of course, the courts have long construed overtime as a penalty, in effect, on employers for working people more than full—you know, that is how it‘s been construed, as more than the—the daily normal workday. It is viewed as a penalty and a disincentive in order to encourage employers not to. So, it is in the same authority that we provide overtime pay that we provide this extra hour of pay.’ ” (Id. at p. 1110.)
While Ferra argues that this means the hour premium for meal and rest break violations should be calculated like overtime pay, Murphy used the commissioner‘s statement to differentiate
the two payments, pointing out that although the IWC used the word ” ‘penalty’ ” at times to refer to meal and rest period payments, “the Legislature‘s occasional description of the meal and rest period remedy as a ‘penalty’ in the legislative history should be
calculated identically, especially in light of the Legislature‘s choice to use “regular rate of compensation” in
It is the Legislature‘s choice to use different phrases that must be construed to mean that the statutes mean different things. Ferra and amicus California Employment Lawyers Association point out a few occasions on which the Division of Labor Standards Enforcement used the phrases interchangeably, but the Legislature and the statutes did not, and it is the Legislature‘s choice of different descriptions of the premiums that governs our analysis. While in common parlance “pay” and “compensation” are sometimes used interchangeably, the Legislature did not do so in choosing the language of the statutes.
c. Persuasive federal opinions favor construing the phrases differently
No published California case distinguishes “regular rate of compensation” as it applies to missed meal and rest periods from “regular rate of pay” for overtime purposes. We therefore look to “analytically sound” reasoning in
A number of federal district courts have concluded that the use of “regular rate of compensation” in
Two years later, Brum v. Marketsource, Inc. (E.D.Cal., June 19, 2017, No. 2:17-cv-241-JAM-EFB) 2017 U.S. Dist. Lexis 94079 (Brum) agreed with Wert and Bradescu and rejected the reasoning in Studley v. Alliance Healthcare Services, Inc. (C.D.Cal., July 26, 2012, SACV No. 10-00067-CJC) 2012 U.S. Dist. Lexis 190964 (Studley, discussed below). Brum acknowledged the plaintiff‘s argument that California cases have used “regular rate of pay” and “regular rate of compensation” interchangeably, but pointed out that none of these cases addresses the difference between the two terms as they appear in the statutes. (Brum, at *13-14.) More recently, in Frausto v. Bank of America (N.D.Cal., Aug. 2, 2018, No. 18-cv-01983-MEJ) 2018 U.S. Dist. Lexis 130220, the plaintiff alleged that her premiums for missed meal periods “were inadequate because they were only based on her straight time rate, not her regular rate of pay that includes all bonuses earned.” (Id. at *12.) The court cited Bradescu, Brum, and Wert to conclude “there is no legally tenable argument that
As Ferra points out, Studley reached a different result, reasoning that premiums for missed meal periods were like overtime pay, and like the overtime statute,
of compensation” in
Two later cases agree. In Ibarra v. Wells Fargo Bank, N.A. (C.D.Cal., May 8, 2018, CV No. 17-4344-PA) 2018 U.S. Dist. Lexis 78513 (Ibarra), the court declined to compare the language of
in
Most recently, and just after we heard oral argument in this case, the court in Valdez v. Fairway Independent Mortgage Corporation (S.D.Cal., July 26, 2019, No. 18-cv-2748-CAB-KSC) ___ F.Supp.3d ___ [2019 U.S. Dist. Lexis 126013] (Valdez) stated: “The Court does not agree with the reasoning behind cases Defendant relies on that find the two terms interchangeable, as those cases either narrowly construed such a finding to the specific circumstances of that case or rejected the difference in language without explanation. [Citations.]” (Id. at *14, citing Ibarra, supra, 2018 U.S. Dist. Lexis 78513, at *11 and Magadia, supra, 384 F.Supp.3d at pp. 1077-1078.) “The Court is more persuaded by the reasoning behind the cases acknowledging the distinction between the two terms and Plaintiff‘s assertion that the overwhelming weight of authority supports the position that
‘regular rate of compensation’ is not synonymous with ‘regular rate of pay.’ [Citations.]” (Valdez, at *14-15, citing Wert, supra, U.S. Dist. Lexis 175735, at *10-11; Frausto, supra, 2018 U.S. Dist. Lexis 130220, at *14; Murphy, supra, 40 Cal.4th at p. 1113; and Brum, supra, 2017 U.S. Dist. Lexis 94079, at *13-14.) “Having considered both positions, the Court agrees with Plaintiff‘s assertion that ‘regular rate of compensation’ is not equivalent to ‘regular rate of pay’ and likewise finds the legislature‘s distinction of the two terms significant.” (Valdez, at *15.)
We conclude that equating “regular rate of pay” and “regular rate of compensation” would elide the difference between requiring an employer to pay overtime for the time an employee spends working more than 40 hours a week, which pays the employee for extra work, and requiring an employer to pay a premium for missed meal and rest hour periods, which compensates an employee for the loss of a benefit. We agree with the dissent that the statutes are to be construed in favor of protecting employees. Requiring employers to compensate employees with a full extra hour at their base hourly rate for working through a 30-minute meal period, or for working through a 10-minute rest break, provides a premium that favors the protection of employees.
Ferra and other Loews hourly employees clocked in and out of work using an electronic timekeeping system which automatically rounded time entries either up or down to the nearest quarter-hour. In addition, the Loews Attendance Policy stated: “A seven (7) minute grace period, prior to the beginning of a shift, and a six (6) minute grace period, after the scheduled
start time, is incorporated into the timekeeping system and provides the team member with a degree of flexibility when clocking in. A team member who clocks in after the (6) six minute grace period is considered tardy for work.”
“In California, the rule is that an employer is entitled to use a rounding policy ‘if the rounding policy is fair and neutral on its face and “it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” ’ ” (Donohue v. AMN Services, LLC (2018) 29 Cal.App.5th 1068, 1083, quoting See‘s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 907 (See‘s).) In this case, Loews‘s “policy is neutral on its face. It ‘rounds all employee time punches to the nearest quarter-hour without an eye towards whether the employer or the employee is benefitting from the rounding.’ ” (AHMC Healthcare, Inc. v. Superior Court (2018) 24 Cal.App.5th 1014, 1027 (AHMC), quoting Corbin v. Time Warner Entertainment-Advance/Newhouse Partnership (9th Cir. 2016) 821 F.3d 1069, 1078-1079 (Corbin).) “Employers use rounding policies to calculate wages efficiently; sometimes, in any given period, employees come out ahead and sometimes they come out behind, but the policy is meant to average out in the long-term. If an employer‘s rounding practice does not permit both upward and downward rounding, then the system is not neutral and ‘will . . . result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.’ [Citation.] Such an arrangement ‘[p]resumably’ does not ‘average[ ] out.’ ” (Corbin, 821 F.3d at p. 1077.) And the grace period policy means that if the clock shows the employee
clocked in before the end of the six-minute grace period, the employee is not considered tardy.
Although Ferra challenges the accuracy of the data before the trial court, she also claims the data shows the rounding policy was not neutral as applied.9 Ferra‘s time records showed she lost time by rounding in 55.1
December 2015). The rounding data did not break down the time gained or lost by employee (except for Ferra, whose time was analyzed separately).
This is not sufficient to show that the rounding policy ” ‘systematically undercompensate[s] employees.’ ” (See‘s, supra, 210 Cal.App.4th at pp. 901-902.) Although in See‘s the majority of employees were overcompensated, See‘s does not “stand[ ] for the proposition that a rounding policy is unlawful where a bare majority of employees lose compensation.” (AHMC, supra, 24 Cal.App.5th at p. 1024.) AHMC described two unpublished federal district court opinions involving quarter-hour rounding systems which “concluded that the fact that a slight majority of employees lost time over a defined period was not sufficient to invalidate an otherwise neutral rounding practice.” (Ibid.) The first case showed that 53 percent of employees lost time over a five-year period, and the second showed that 55.8 percent of employees (including the plaintiff) suffered minor losses over a three-year period. (Id. at pp. 1025-1026.) Both courts concluded that summary judgment in favor of the employer was nevertheless appropriate. (Ibid.) ” ‘[R]ounding contemplates the possibility that in any given time period, some employees will have net overcompensation and some will have net undercompensation. Given the expected fluctuations with respect to individual employees, shifting the time window even slightly could flip the figures.’ ” (Id. at p. 1025; Utne v. Home Depot U.S.A., Inc. (N.D.Cal., Dec. 4, 2017, No. 16-cv-01854-RS) 2017 U.S. Dist. Lexis 199184, at *11-12 (Utne).) “Although the data analyzed here—from October 22, 2012 to September 1, 2015—did not average out to 0, Defendant‘s expert calculations are sufficient to establish that the practice does not systematically”
undercompensate employees over time.” (Boone v. PrimeFlight Aviation Services, Inc. (E.D.N.Y., Feb. 20, 2018, No. 15-CV-6077-JMA-ARL) 2018 U.S. Dist. Lexis 28000, at *28.)
DISPOSITION
The judgment is affirmed. Costs are awarded to respondent Loews Hollywood Hotel, LLC.
CERTIFIED FOR PUBLICATION
EGERTON, J.
I concur:
LAVIN, J.
EDMON, P.J., Concurring and Dissenting.
I agree that Loews‘s policy of rounding time entries up or down to the nearest quarter hour is lawful. However, I respectfully disagree with the majority‘s conclusion that “regular rate of compensation” as used in
1. Interpretive principles
“In statutory construction cases, our fundamental task is to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute. (Day v. City of Fontana (2001) 25 Cal.4th 268, 272.) ‘We begin by examining the statutory language, giving the words their usual and ordinary meaning.’ (Ibid.; People v. Lawrence (2000) 24 Cal.4th 219, 230.) If the terms of the statute are unambiguous, we presume the lawmakers meant what they said, and the plain meaning of the language governs. (Day v. City of Fontana, supra, 25 Cal.4th at p. 272; People v. Lawrence, supra, 24 Cal.4th at pp. 230-231.) If there is ambiguity, however, we may then look to extrinsic sources, including the ostensible objects to be achieved and the legislative history. (Day v. City of Fontana, supra, 25 Cal.4th at p. 272.) In such cases, we ’ “select the
Contrary to the majority (maj. opn. ante, at p. 10), I believe “regular rate of compensation” is ambiguous because it is susceptible of more than one interpretation. (See Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1163 [statutory language is ambiguous if it ” ‘permits more than one reasonable interpretation’ “].) The plain meaning of “compensation” is “payment, remuneration,” and the plain meaning of “regular” is “constituted, conducted, scheduled.” (Merriam-Webster‘s 11th Collegiate Dict. (2008) p. 253, col. 2, p. 1048, col. 1.) On its face, therefore, “regular rate of compensation” could mean either an hourly rate plus incentive/bonus pay or an hourly rate alone. I therefore would conclude that resort to extrinsic sources and principles of statutory construction is necessary to determine legislative intent.
As discussed below, I find three principles of statutory construction relevant to interpreting
2. Liberal construction of labor laws in favor of worker protection
Our Supreme Court has directed that to determine the Legislature‘s intent in enacting wage and hour legislation, our analysis must be guided by “[t]wo overarching interpretive principles.” (Alvarado v. Dart Container Corp. of California (2018) 4 Cal.5th 542, 561 (Alvarado).) First, the obligation to pay meal and rest break premiums reflects a state policy that meal and rest periods are essential to worker health and safety. (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1105.) Second, “the state‘s labor laws are to be liberally construed in favor of worker protection.” (Alvarado, supra, 4 Cal.5th at p. 562; see also ZB, N.A. v. Superior Court of San Diego County (2019) 8 Cal.5th 175, 189 [“Because statutes governing
Interpreting “regular rate of compensation” to include nondiscretionary bonuses unquestionably encourages compliance with meal and rest break requirements because it raises the cost to employers of noncompliance. Accordingly, the presumptions in favor of worker protection and enforcement of meal and restbreak requirements weigh strongly in favor of construing
3. Consistent construction of similar statutory language on the same or analogous subjects
” ‘Where . . . legislation has been judicially construed and a subsequent statute on the same or an analogous subject uses identical or substantially similar language, we may presume that the Legislature intended the same construction, unless a contrary intent clearly appears.’ (Estate of Griswold[, supra,] 25 Cal.4th [at pp.] 915-916.)” (Moran v. Murtaugh Miller Meyer & Nelson, LLP (2007) 40 Cal.4th 780, 785.) In other words, “[w]e presume the Legislature ‘was aware of existing related laws’ when it enacted [
When the Legislature adopted
i. The Fair Labor Standards Act
As adopted in 1938, section 7(a) of the federal
The FLSA initially did not define “regular rate,” and litigation over the meaning of the phrase ensued almost immediately. In 1944, the Supreme Court held that ” ‘regular rate’ . . . mean[s] the hourly rate actually paid for the normal, non-overtime workweek.” (Walling v. Helmerich & Payne, Inc. 1944, 323 U.S. 37, 40, italics added; see also Walling v. Youngerman-Reynolds Hardwood Co. (1945) 325 U.S. 419, 424-425, italics added [“The regular rate by its very nature must reflect all payments which the parties have agreed shall be received regularly during the workweek, exclusive of overtime payments. It is not an arbitrary label chosen by the parties; it is an actual fact“].) The following year, the court held that “regular rate” necessarily included not only the base hourly rate, but also nondiscretionary bonuses.2 It explained: “Those who receive
incentive bonuses in addition to their guaranteed base pay clearly receive a greater regular rate than the minimum base rate. . . . The conclusion that only the minimum hourly rate constitutes the regular rate opens an easy path for evading the plain design of § 7(a). We cannot sanction such a patent disregard of statutory duties.” (Walling v. Harnischfeger Corp., supra, 325 U.S. at pp. 431-432, italics added.)3
By the
Although the FLSA has been amended many times, the statute in its current form continues to require overtime pay as a multiple of an employee‘s “regular rate,” and to define “regular rate” as ”all remuneration for employment paid to, or on behalf of, the employee,” subject to exceptions not relevant here. (
In 1913, the California Legislature established the Industrial Welfare Commission (IWC), to which it delegated authority for setting minimum wages, maximum hours, and working conditions. (Augustus v. ABM Security Services, Inc. (2016) 2 Cal.5th 257, 263 (Augustus).) The IWC began issuing industry- and occupation-specific wage orders in 1916.5
California‘s current wage orders are closely modeled after
Although the California wage orders added a modifier to the federal definition—referring to an employee‘s “regular rate of pay,” rather than his or her “regular rate“—California authorities consistently have concluded the two phrases are synonymous. Significantly, the Division of Labor Standards Enforcement (DLSE), the state agency that enforces wage and hour laws (Ward v. Tilly‘s, Inc. (2019) 31 Cal.App.5th 1167, 1176), has said that “the failure of the IWC to define the term ‘regular rate’ indicates the [IWC‘s] intent that in determining what payments are to be included in or excluded from the calculation of the regular rate of pay, California will adhere to the standardsadopted by the U.S. Department of Labor to the extent that those standards are consistent with California law.” (Dept. of Industrial Relations, DLSE, Chief Counsel H. Thomas Cadell, Jr.,
b. Current law
i. Wage Order 5-2001
The IWC adopted wage orders in their current forms in 2000. Consistent with prior versions, Wage Order No. 5-2001, which governs the present case (see Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1018), provides that an employer is obligated to pay an overtime premium for work in excess of eight hours in a day, 40 hours in a week, or for any work at all on a seventh consecutive day. (Wage Order No. 5-2001, subd. 3, Cal. Code Regs., tit. 8, § 11050, subd. 3(A)(1).) Such work must be compensated at 1.5 times the employee‘s “regular rate of pay,” or double the “regular rate of pay” if the employee works in excess of 12 hours in a day or in excess of eight hours on a seventh consecutive working day. (Cal. Code Regs., tit. 8, § 11050, subd. 3(A)(1)(b).)
Wage Order 5-2001 also included, for the first time, a provision requiring premium pay for employees deprived of the ten-minute rest breaks or 30-minute meal breaks required by statute. Specifically, Wage Order No. 5-2001 provides that an employer who does not allow an employee a rest
Although the IWC thus used slightly different language to describe the premiums due for overtime work and for missedmeal and rest breaks (“regular rate of pay” versus “regular rate of compensation“), nothing in the regulatory history suggests the IWC intended the two phrases to have different meanings. Indeed, the regulatory history suggests exactly the opposite. In its explanation of the basis for adopting meal and rest break premiums, the IWC said: “During its review . . . , the IWC heard testimony and received correspondence regarding the lack of employer compliance with the meal and rest period requirements of its wage orders. The IWC therefore added a provision to this section that requires an employer to pay an employee one additional hour of pay at the employee‘s regular rate of pay for each work day that a meal period is not provided.” (IWC Statement As to the Basis, p. 20, italics added, <https://www.dir.ca.gov/iwc/statementbasis.htm> [as of Oct. 9, 2019], archived at <https://perma.cc/CN6U-HF8P>.) In other words, the IWC itself appears not to have distinguished between the phrases “regular rate of pay” and “regular rate of compensation“—a telling indicator that it intended these phrases to be applied interchangeably.
ii. Sections 510 and 226.7
At about the same time the IWC enacted wage orders in their current forms, the Legislature added provisions governing overtime premiums and meal and rest break premiums to the Labor Code by adopting sections 510 and 226.7. Like the analogous provisions of the wage orders, section 510 requires overtime pay to be calculated on the basis of an employee‘s “regular rate of pay,” and section 226.7 requires meal and rest break premiums to be calculated on the basis of an employee‘s“regular rate of compensation.”7 Section 510 does not define “regular rate of pay,” and section 226.7 does not define “regular rate of compensation.”
rates of pay or wages. For example, the Senate Committee on Industrial Relations described an early version of the bill as requiring employers to pay an amount “twice the hourly rate of pay” (Sen. Com. on Industrial Relations, Analysis of Assem. Bill No. 2509 (1999-2000 Reg. Sess.) as amended June 26, 2000, p. 5, italics added); the Senate Judiciary Committee described the bill as creating employer liability for “twice the employee‘s average hourly pay” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 2509 (1999-2000 Reg. Sess.) as amended Aug. 7, 2000, p. 8, italics added); and the Senate Rules Committee said failure to provide meal and rest periods would subject an employer to paying a worker an additional ”hour of wages” (Sen. Com. on Rules, Analysis of Assem. Bill No. 2509 (1999-2000 Reg. Sess.) as amended Aug. 25, 2000, p. 4, italics added). Similarly, the legislative reports describing the overtime pay provisions of section 510 refer in places to an employee‘s rate of ”compensation.” (E.g., Bill Analysis, Assem. Bill No. 60 (1999-2000 Reg. Sess.) as amended July 1, 1999, p. 3, italics added [under existing law, wage orders require “the payment of time-and-one-half compensation for work exceeding eight hours per day, 40 hours per week“]; Sen. Com. on Industrial Relations, Analysis of Assem. Bill No. 60 (1999-2000 Reg. Sess.) as amended May 27, 1999 [same].)
iii. Judicial interpretations of section 510
Like the DLSE, state courts have drawn on federal authorities interpreting the FLSA to inform their understanding of “regular rate of pay” within the meaning of the wage orders and
Last year, our Supreme Court concluded that, like an employee‘s “regular rate” for purposes of the FLSA, an employee‘s “regular rate of pay” for purposes of section 510 ”is not the same as the employee‘s straight time rate (i.e., his or her normal hourly wage rate).” (Alvarado, supra, 4 Cal.5th at p. 554, italics added.) Instead, the “[r]egular rate of pay, which can change from pay period to pay period, includes adjustments to the straight time rate, reflecting, among other things, shift differentials and theper-hour value of any nonhourly compensation the employee has earned.” (Ibid.)
c. Analysis
When the Legislature adopted
It is undoubtedly true, as the majority notes, that
Here, attributing controlling significance to the modifier “of compensation” leads to an entirely unreasonable conclusion—namely, that the Legislature used the phrase “regular rate” in
I find the majority‘s analysis particularly unpersuasive in light of the nearly simultaneous enactment of sections 510 and 226.7. Reduced to its essentials, the majority‘s reasoning is as follows. In 1999, “regular rate” was widely understood to mean base hourly rate plus bonuses. Although the Legislature modified the federal language when it adopted section 510, the Legislature intended “regular rate of pay” to have the same meaning as “regular rate.” But although the Legislature modified the federal language in a similar (although not identical) manner when it adopted section 226.7, it intended an entirely different meaning—and although it nowhere articulated that intended meaning, it expected parties and the courts to infer the meaningby its use of the word “compensation,” rather than “pay.” I am not persuaded.
The majority urges that the Legislature‘s use of “regular rate” in
Although courts sometimes attach significance to the Legislature‘s use of different words or phrases in related statutes, where statutes appear to use synonymous words or phrases interchangeably, courts have not hesitated to attribute the same meanings to them. (See, e.g., People v. Frahs (2018) 27 Cal.App.5th 784, 793, fn. 3, review granted Dec. 27, 2018, S252220 [defendant “attempts to draw a distinction between ‘deadly weapon’ and ‘instrument,’ but the terms are used interchangeably within the statute“]; Vector Resources, Inc. v. Baker (2015) 237 Cal.App.4th 46, 55 [“The italicized words in Labor Code section 1773 show that the terms ‘determine’ and ‘fix’ are used interchangeably and have the same meaning in the statute“]; Alcala v. City of Corcoran (2007) 147 Cal.App.4th 666, 672 [attributing same meaning to statute‘s use of “public agency” and “public entity“: “Unless the two terms are readinterchangeably, the statute makes no sense“]; International Assn. of Fire Fighters Union v. City of Pleasanton (1976) 56 Cal.App.3d 959, 976 [“We perceive no basis for distinguishing between the term ‘consultation in good faith,’ as used in [Government Code] section 3507, and the ‘meet and confer in good faith’ process defined in [Government Code] section 3505“]; Midstate Theatres, Inc. v. County of Stanislaus (1976) 55 Cal.App.3d 864, 872 [“Applicants argue that the statute uses the words [advise and represent] interchangeably and that in popular usage no valid distinction can be drawn between them. There is merit in this contention“]; see also People v. Johnson (2015) 61 Cal.4th 674, 692 [“Because ‘term’ and ‘sentence’ have been used interchangeably, and ‘term’ clearly has more than one meaning in the statute, we cannot be confident that ‘sentence’ has a consistent meaning throughout the statute. In any event, the presumption that a term has an identical meaning throughout a statute ‘is rebuttable if there are contrary indications of legislative intent.’ “].)
As the Supreme Court has noted, the Legislature “has frequently used the words ‘pay’ or ‘compensation’ in the Labor Code as synonyms.” (Murphy v. Kenneth Cole Productions, Inc., supra, 40 Cal.4th at pp. 1103-1104 & fn. 6.) This is not surprising, as “pay” and “compensation” are synonymous as a matter of common parlance. Webster‘s dictionary defines “compensation” as “payment, remuneration” (Merriam-Webster‘s 11th Collegiate Dict. (2008) p. 253, col. 1), and it defines “pay” as “something paid for a purpose and esp. as a salary or wage; remuneration” (id., p. 910, col. 2). “Pay,” “compensate,” and “remunerate” are identified as synonyms. (Id. at p. 910, col. 2.)
The Legislature‘s interchangeable use of “pay” and “compensation” is evident throughout the Labor Code generally, as well in those provisions of
Similarly, with regard to overtime,
In short, the Legislature uses “pay” and “compensation” interchangeably throughout the Labor Code, including in provisions that describe the overtime and meal and rest break premiums. I would conclude, therefore, that the principle that the same meaning should be attributed to substantially similar language in related statutes (Moran v. Murtaugh Miller Meyer & Nelson, LLP, supra, 40 Cal.4th at p. 785) supports the conclusion that the Legislature
5. The majority‘s reliance on a single canon of construction is unpersuasive
The majority‘s conclusion that “regular rate of compensation” means an employee‘s base hourly rate is groundedalmost entirely on a single canon of statutory construction—that ” ‘[w]here different words or phrases are used in the same connection in different parts of a statute, it is presumed the Legislature intended a different meaning.’ ” (Maj. opn. ante, at p. 8, citing Briggs v. Eden Council for Hope & Opportunity (1991) 19 Cal.4th 1106, 1117.) But while canons of statutory construction are intended to “provide guidance in interpreting a statute,” they are ” ’ ” ‘merely aids to ascertaining probable legislative intent.’ [Citation.] No single canon of statutory construction is an infallible guide to correct interpretation in all circumstances.” “[The canons] are tools to assist in interpretation, not the formula that always determines it.” ’ ” (City of Palo Alto v. Public Employment Relations Bd. (2016) 5 Cal.App.5th 1271, 1294; see also Stone v. Superior Court (1982) 31 Cal.3d 503, 521, fn. 10 [principles of construction “are merely aids to ascertaining probable legislative intent.“].) Accordingly, a court must ” ’ “be careful lest invocation of a canon cause it to lose sight of its objective to ascertain the Legislature‘s intent.” ’ ” (People v. Superior Court (Cooper) (2003) 114 Cal.App.4th 713, 720.)
In the present case, I believe the majority‘s reliance on a single canon of construction has led it to a conclusion the Legislature did not intend, and that the canon does not support. As a logical matter, if the canon applies, it may suggest what
The majority‘s analysis assumes that when the Legislature adopted sections 226.7 and 510, it intended parties and the courts to understand—in the absence of any clarifying language in the statute or legislative history—that “regular rate of pay” has the same meaning as “regular rate,” but “regular rate of compensation” means something different. I cannot conclude that
the Legislature “would have silently, or at best obscurely, decided so important . . . a public policy matter and created a significant departure from the existing law.” (In re Christian S. (1994) 7 Cal.4th 768, 782.) Instead, I would conclude that when the Legislature used the phrase “regular rate” in
EDMON, P.J.