Wage Law

The DLSE has just issued a memorandum to its staff concerning the November 9, 2004 decision in Westside Concrete Company, Inc. v. Department of Industrial Relations (2004) 123 Cal.App.4th 1317.

This is to advise all DLSE staff of the above-referenced recent decision in the Court of Appeals, where the court reversed a lower court opinion that held that an opinion letter on meal periods was not an underground regulation. It set forth criteria for deciding which specific, narrow letters might be exempt, and which broader, general letters would not. DLSE is not appealing the case, and reviewed all current opinion letters issued by the Division of Labor Standards Enforcement (DLSE) dealing with the application of Industrial Welfare Commission (IWC) orders governing meal periods.

If you would like to read Westside Concrete for yourself, you can view or download a copy of the opinion in pdf format or in Microsoft Word format.

The decision was little more than a reinforcement of existing law, and the DLSE should not be surprised. The Westside Concrete decision reminds the DLSE that it is vested with the authority to promulgate necessary “regulations and rules of practice and procedure.” Labor Code § 98.8. But that, in adopting and enforcing such regulations, it is subject to the requirements of the APA. California School of Culinary Arts v. Lujan (2003) 112 Cal.App.4th 16, 25. The “regulations” subject to the APA are broadly defined to include “every rule, regulation, order, or standard of general application or the amendment, supplement, or revision of any such rule, regulation, order, or standard adopted by any state agency to implement, interpret, or make specific the law enforced or administered by it, or to govern its procedure.” Government Code § 11342.600. Regulations are subject to the APA if the agency intends its rule to apply generally, rather than in a specific case; and if the rule implements, interprets, or makes specific the law enforced or administered by the agency, or governs the agency’s procedure. (citing Tidewater Marine, 14 Cal.4th at p. 571) Agencies remain free to “provide private parties with advice letters, which are not subject to the rulemaking provisions of the APA. Thus, DLSE opinion letters are not subject to the rulemaking provisions of the APA. However, such opinion letters are not an expression of regulatory decision-making, and are clearly not binding on a court.

The most interesting part of the dispute -- whether the DLSE had the right, in October 2000, to impose liability on the part of employers who denied meal and rest breaks to their workers -- was disregarded by the court. The court held that, because the action was one for prospective declaratory relief, that issue was rendered moot by the legislature's adoption of Labor Code § 226.7, effective January 1, 2001. This observation lead to one of the better chunks of dicta published this year:

Irrespective of the IWC’s authority to promulgate the meal period provision penalty, the Legislature has now spoken and made its position very clear: employees entitled under IWC Wage Orders to uninterrupted meal and rest periods must be afforded those breaks; employers who fail to provide them do so at their financial peril.

In [supposed] reaction to this decision, the DLSE has withdrawn four opinion letters:

• Letter of April 2, 2001, dealing with Meal and Rest Period Requirements for Ready-Mix Drivers Working Under the Terms of a Collective Bargaining Agreement
• Letter of June 14, 2002, dealing with Meal Period Requirements
• Letter of June 11, 2003, dealing with Meal and Rest Period Requirements
• Letter of November 3, 2003, dealing with Meal and Rest Period Requirements for Employees Working Alone With No Other Employees at the Work Site

Instead, the DLSE is seeking to implement new meal and rest period regulations more in line with Governor Schwarzenegger's pro-business agenda. The new regulations can be read here.

Strangely, the DLSE has not responded to Westside Concrete by withdrawing any other opinion letters....