California: Pay for Missed Breaks is a Wage Rather than a Penalty for Statute of Limitations Purposes (Updated)

A second important holding out of Murphy v. Kenneth Cole Productions, Inc., __ Cal.4th ___, 56 Cal.Rptr.3d 880, 155 P.3d 284 (April 16, 2007), is that the “one additional hour of pay” provided for in Labor Code section 226.7 constitutes a wage or premium pay, a claim for which is subject to a three-year statute of limitations (Code Civ. Proc., § 338) rather than a penalty subject to a one-year statute of limitations (Code Civ. Proc., § 340). The court finds the language of section 226.7 ambiguous and thus sets out on a lengthy and comprehensive analysis of:

extrinsic sources, such as the ostensible objectives to be achieved by the statute, the evils to be remedied, the legislative history, public policy, contemporaneous administrative construction and the statutory scheme of which the statute is a part.

The end result seems consistent with the policy that “statutes regulating conditions of employment are to be liberally construed with an eye to protecting employees.”

Update (5/16/07): In a post called “Defense Firms Weigh In on Murphy,” the Wage Law blog notes that the Supremes have denied a petition to modify the opinion in a way designed to head off negative consequences to employers that “will flow from the Supreme Court’s designation of the hour of pay as a wage.” The post includes a round-up of commentary on the case by “large firm” blogs.