Ferra v. Loews Hollywood: Another Key 2021 California Employment Law Case

Most would agree that the California courts were pretty quiet throughout 2020, but that appears to be changing in 2021. As of now, the California Supreme Court is scheduled to see several significant employment law cases that could affect how employment law affects employers and employees throughout California. 

Ferra v. Loews Hollywood: Scheduled to Appear before California Supreme Court in 2021

Case Info: Ferra v. Loews Hollywood, Nos. B283218, Los Angeles CountySuper. Ct. No. BC586176

In 2021, Ferra v. Loews Hollywood is scheduled to appear before the California Supreme Court. The Plaintiff in the case appealed to the Supreme Court of California asking for clarification of Labor Code 226.7’s phrasing “regular rate of compensation” and what it means in a context where the employee in question receives numerous forms of wages for work performed on the job. 

The Plaintiff, Ferra, Claims Loews Hollywood Hotel Violated California Labor Law: 

Plaintiff, on behalf of herself and three alleged classes of hourly employees working at Loews Hollywood Hotels, filed a class action. The Plaintiff alleges that the employer’s calculation of the premium payment was inaccurate because the company did not provide mandatory meal breaks and rest periods as required by California labor law (Labor Code section 226.7). Based on the alleged miscalculations, the Plaintiff also alleges that Loews did not provide full payment for all hours worked due to shaving and rounding time from employee hours. The Court of Appeal found in favor of  Loew’s holding that the statute’s plain language, federal case precedent, and the statutory history all indicate a difference between the “regular rate of compensation” and the “regular rate of pay.” The court held that Loew’s “rounding policy” did not result in systematic undercompensation of Loew’s employees over time. 

What Question Does the California Supreme Court Need to Decide? 

Discussion of the case has concerned parties pointing out (and urging the California Supreme Court to hold) that “regular rate of compensation” as pertaining to meal and rest breaks is in reference to the employee’s base hourly wage. This definition provides distinction between the two oft-confused phrases, since the term “regular rate of pay” generally includes non hourly compensation. 

The California Supreme Court’s Decision on Ferra v. Loews Hollywood:

California employers and employees should watch the Ferra v. Loews Hollywood case since the California Supreme Court’s decision could affect how wages earned based on meal period penalties are calculated. The regular rate used to calculate overtime seems cumbersome for meal period penalty calculations since the regular rate of pay could include annual or quarterly bonuses (some of which could occur after the missed meal period for which the penalty is being calculated). However, “regular rate of compensation” does sound very similar to “regular rate of pay” and federal district courts have ruled both ways on the issue, so many are interested to see which way the California Supreme Court will lean on this issue.

If you have questions about California labor law violations or how employment law protects you against labor law violations, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.