SB 327 Renders Gerard v. Orange Coast Medical Center Moot
SB 327 Renders Gerard v. Orange Coast Medical Center Moot
Healthcare Employees Working Twelve or More Hour Shifts Can Once Again Waive One of Their Two Meal Periods
What You Need To Know
This year's debate on meal period waivers in the healthcare industry has ended in favor of employers. On October 5, 2015, Governor Jerry Brown signed California Senate Bill (SB) 327, which declares that non-exempt employees who work in the healthcare industry may waive one of their two meal periods (the so-called healthcare meal period waiver), even when they work shifts that exceed twelve hours. Most importantly, SB 327 is retroactive. It states: "the healthcare employee meal period waiver provisions...were valid and enforceable on and after October 1, 2000, and continue to be valid and enforceable."
Background
California Labor Code section 512 requires employers to provide employees with the opportunity to take two meal periods when they work more than ten hours in a day. Employees are allowed to waive their second meal period, provided their shift does not exceed twelve hours and they have received their first meal period.
Notwithstanding section 512, since 1993, IWC Wage Orders 4 and 5 have contained specific meal period waiver provisions for employees in the healthcare industry. The Wage Orders permitted employees in the healthcare industry to waive their second meal period, even when their shift exceeded twelve hours. Specifically, Section 11(D) of Wage Order 5-20011 provides: "[E]mployees in the healthcare industry who work shifts in excess of eight (8) total hours in a workday may voluntarily waive their right to one of their two meal periods. In order to be valid, any such waiver must be documented in a written agreement that is voluntarily signed by both the employee and the employer. The employee may revoke the waiver at any time by providing the employer at least one day's written notice..."
Since 1993, employers in the healthcare industry relied on Wage Orders Nos. 4 and 5 to allow employees to waive one of their two meal periods, even when their shifts exceeded twelve hours.
The California Court of Appeal in Gerard v. Orange Coast Medical Center Retroactively Unravels the IWC’s 22-year-old Meal Period Waiver
In February 2015, the California Court of Appeal rocked the healthcare industry when it partially invalidated Wage Order No. 5's 22-year-old healthcare meal period waiver in Gerard v. Orange Coast Memorial Medical Center.2 The Court held that the portion of the IWC Wage Order that allowed healthcare employees to waive a second meal period for shifts exceeding eight (8) hours (however much in excess the shift may be) was invalid.3 In reaching this conclusion, the Court found that the IWC had no authority to adopt a regulation that conflicted with Labor Code section 512(a).4
To add insult to injury, the Court of Appeal applied its decision retroactively, holding that employers in the healthcare industry "have been on clear notice, pursuant to [Labor Code] sections 512(a) and 516, [that] they were required to provide healthcare workers with a second meal period when they worked more than 12 hours in a day."5
On May 20, 2015, the California Supreme Court agreed to review the Gerard decision and ultimately rule on the validity of IWC Wage Order No. 5's healthcare meal period waiver. The review thus put on hold the Court of Appeal decision, but in the meantime caused employers to scratch their collective heads about how best to proceed until the Supreme Court ruled on the waiver and more importantly, on the retroactive application of any decision.
Senate Bill 327
In response to the Gerard decision, Governor Brown signed SB 327 as an emergency measure on October 5, 2015. SB 327 is effective immediately and reads as follows:
SECTION 1. The Legislature finds and declares the following:
(a) From 1993 through 2000, Industrial Welfare Commission Wage Orders 4 and 5 contained special meal period waiver rules for employees in the healthcare industry. Employees were allowed to waive voluntarily one of the two meal periods on shifts exceeding 12 hours. On June 30, 2000, the Industrial Welfare Commission adopted regulations allowing those rules to continue in place. Since that time, employees in the healthcare industry and their employers have relied on those rules to allow employees to waive voluntarily one of their two meal periods on shifts exceeding 12 hours.
(b) Given the uncertainty caused by a recent appellate court decision, Gerard v. Orange Coast Memorial Medical Center (2015) 234 Cal.App.4th 285, without immediate clarification, hospitals will alter scheduling practices.
SEC. 2. Section 516 of the Labor Code is amended to read:
516. (a) Except as provided in Section 512, the Industrial Welfare Commission may adopt or amend working condition orders with respect to break periods, meal periods, and days of rest for any workers in California consistent with the health and welfare of those workers.
(b) Notwithstanding subdivision (a), or any other law, including Section 512, the healthcare employee meal period waiver provisions in Section 11(D) of Industrial Welfare Commission Wage Orders 4 and 5 were valid and enforceable on and after October 1, 2000, and continue to be valid and enforceable. This subdivision is declarative of, and clarifies, existing law.
SEC. 3. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to confirm and clarify the law applicable to meal period waivers for employees in the healthcare industry throughout the state, it is necessary that this act take effect immediately.
Implications
With the passage of SB 327, employers in the healthcare industry can breathe a sigh of relief. Not only is the healthcare waiver now codified in the Labor Code, but SB 327 also makes clear that healthcare waivers pursuant to Wage Orders Nos. 4 and 5 have always been, and continue to be, valid and enforceable stating, "the healthcare employee meal period waiver provisions...were valid and enforceable on and after October 1, 2000, and continue to be valid and enforceable." Accordingly, employers in the healthcare industry may, once again, return to the practice of implementing and enforcing meal period waivers.
1 Cal. Code Regs, tit. 8, § 11050
2 234 Cal.App.4th 285 (2015)
3 234 Cal.App.4th at 294-298
4 234 Cal.App.4th 294-298
5 Id.
