What rate is a missed-break premium paid at in California?
The regular rate of compensation, not the base hourly rate. In Ferra v. Loews Hollywood Hotel (2021) the California Supreme Court held that the premium owed for a missed meal or rest break must include nondiscretionary payments such as production or attendance bonuses — the same rate used to calculate overtime. The ruling applies retroactively.
Section 226.7 says the premium is "one additional hour of pay at the employee's regular rate of compensation." Employers had widely read that as the base hourly wage, distinct from the "regular rate of pay" used for overtime, which includes nondiscretionary bonuses.
The court held the two phrases mean the same thing. A premium hour must therefore be calculated the way an overtime hour is: base wage plus nondiscretionary compensation, spread across the hours worked.
Because the decision interpreted an existing statute rather than announcing a new rule, it applies to past pay periods. Employers who had been paying premiums at base rate were underpaying them, and the shortfall is itself unpaid wages.
The arithmetic consequence is easy to underestimate. A modest monthly attendance bonus can lift the regular rate by a dollar or two, and every premium hour paid at base rate in that period was short by that amount.
Sources
Last reviewed 2026-08-09. Informational only — not legal advice. California rules change; confirm against the current source before acting.