Are you paid by the piece? Are you paid commissions? If you answered YES to either of these questions, then you may have not been provided with legally required breaks and may be entitled to compensation.
This month, in Ibarra v. Wells Fargo, the Ninth Circuit affirmed that Well’s Fargo’s commission-based compensation plan violated LC 226.7 by not separately compensating for time spent on rest breaks citing Vaquero v. Stoneledge Furniture and held that Plaintiffs are entitled to at least $24,472,114.36 in damages for Wells Fargo’s violation of section 226.7.
However, the court remanded on the issue of the correct calculation of damages pending the Cal Supreme Court’s decision in Ferra v. Loews Hollywood Hotell, LLC on how to properly calculate the “regular rate of compensation” under 226.7(c). Therefore the district court stayed the remaining $72,812,703.55 in potential stipulated damages pending a decision in Ferra.
The issue certified before the Cal Supreme Court in Ferra is whether the Legislature intend the term "regular rate of compensation" in Labor Code section 226.7, which requires employers to pay a wage premium if they fail to provide a legally compliant meal period or rest break, to have the same meaning and require the same calculations as the term "regular rate of pay" in Labor Code section 510(a), which requires employers to pay a wage premium for each overtime hour? The only California Court of Appeal decision interpreting “regular rate of compensation” under section 226.7(c) is Ferra v. Loews Hollywood Hotel, LLC, 253 Cal. Rptr. 3d 798 (Ct. App. 2019), review granted, 456 P.3d 415 (Jan. 22, 2020), which held that “regular rate of compensation” included only the plaintiff’s “base hourly wage” and did not include “her nondiscretionary quarterly bonus.” Id. at 802-03. Ferra rejected the argument that “regular rate of compensation” is synonymous with “regular rate of pay” under section 510. See id. at 802-08. After we heard oral argument in this case, the California Supreme Court granted review in Ferra to consider whether “the [California] Legislature intend[ed] the term ‘regular rate of compensation’ in Labor Code section 226.7 . . . to have the same meaning and require the same calculations as the term ‘regular rate of pay’ under Labor Code section 510(a).” See Ferra v. Loews Hollywood Hotel, 456 P.3d 415 (Cal. 2020).
For now, Plaintiffs are entitled to at least $24,472,114.36 in damages for Wells Fargo’s violation of section 226.7 and the 9th Circuit instructed the district court on remand to order payment of $24,472,114.36 by Wells Fargo.