On August 15, 2024, the California Supreme Court ruled in Stone v. Alameda Health System, 2024 WL 3819163, that California public employees do not enjoy the same wage and hour protections the state affords private sector workers. The Court ultimately held that the Legislature exempted public employees from various Labor Code provisions, including the right to meal periods and rest breaks, as well as Private Attorneys General Act (PAGA) penalties.
Employees of a public hospital brought a class and PAGA representative action alleging multiple violations of the California Labor Code, including: (1) failure to provide off-duty meal periods, (2) failure to provide off-duty rest periods, (3) failure to keep accurate payroll records, (4) failure to provide accurate itemized wage statements, (5) failure to pay wages, (6) failure to timely pay wages, and (7) civil penalties for these violations under PAGA (§ 2698 et seq.). The Defendant filed a motion to dismiss the action asserting that public employers are exempt from the wage and hour claims at issue and not an employer within the PAGA. The motion was granted and partially reversed by the appellate court prior to the Supreme Court granting review.
Noting “provisions of the Labor Code apply only to employees in the private sector unless they are specifically made applicable to public employees”, the Court concluded the Legislature intended to exclude public employees from the protections governing meal and rest breaks and related statutes governing full and timely payment of wages. The Court further explained that California wage and hour laws are governed by “two complimentary and occasionally overlapping sources of authority: the provisions of the Labor Code, enacted by the Legislature, and a series of 18 wage orders, adopted by the IWC.”
In finding public employees exempt from the laws governing breaks and meal periods, the Court noted that while the Labor Code did not define employers, the wage order incorporated a definition that does not include governmental employers. Because the Labor Code did not expressly include public employers, public employers have no obligation under the Labor Code to provide meal and rest breaks. As such the claims in the lawsuit were not viable, including the claims that were derivative of those allegations.
The Court also ruled that the definition of employer in the PAGA statute mirrored that of the other claims. Noting that PAGA civil penalties have a punitive or deterrent aspect, the Court stated “we would expect the Legislature to have more clearly communicated any intention to impose PAGA penalties on public employers” given that the penalties would be paid by tax-funded revenues.
The Court suggested a Legislative correction of the rules for thee and not for me double standard of denying public employees the wage and hour protections afforded to other California employees. “If the Legislature intends otherwise, it is of course free to amend the relevant statutes or pass new legislation to provide for a different result.” Perhaps a future Legislature will do so.
