California Labor Compliance

Updated November 21, 2024 15:03

calibanner To remain compliant with the regional labor requirements for restaurants, employers in California must take certain measures to ensure they are scheduling in a compliant manner.

In this article, you'll learn how to enable California labor compliance in 7shifts, understand the types of labor exceptions, and run reports to help you stay compliant with state regulations.

SKIP AHEAD TO:

Enable California Labor Compliance
Types of Exceptions in California
View Exception Warnings
More Compliance Tools (dismissed meal break waivers/attestations)

Prerequisites

⚠️ Access to this feature may require an upgrade from your current plan.

⚠️ The Labor Exceptions report is only available with 7punches or a POS labor integration.

Enable Labor Compliance

Log in as an Admin on the web app.
In the left navigation bar, head to Settings (or, hover over your profile photo) > Company Settings.
Select the Labor & Compliance tab.
Under Jurisdiction, select California:
For accounts that select California as their jurisdiction, the overtime calculations in 7shifts are automatically set to Regular Rate of Pay.

⚠️ On July 15, 2021, the California Supreme Court ruled that overtime must be paid at the regular rate of pay—a weighted pay rate versus solely the hours worked.

Click here to learn more about the Regular Rate of Pay option in your Overtime settings.

Regular rate of pay is calculated as a weighted average of all the shifts an employee has worked multiplied by the wage paid for each hour (from all Roles, across all Departments/Locations), divided by the total hours worked in a period. For example: if an employee worked 30 hours at $10, and 30 hours at $20, the regular rate of pay is $15/hour.
Review and set your overtime, break, custom break, and wages & pay settings.
Under the Advanced Labor section, California labor compliance settings will automatically populate as per the Jurisdiction set earlier. Checkmark the options according to your preferences:
Be sure to hit Save to complete these changes!
To restore default California settings (including Overtime rules), click Re-sync labor & compliance settings:

Types of Exceptions

Missed Meal Breaks

Meal breaks are breaks of 30 minutes or more. Depending on the length of shift, 1 or 2 meal breaks may be required. An exception occurs when the required number of meal breaks are not taken and/or if Meal Break #1 is not started before the end of the 5th hour (4:59) of the shift.

For each exception, an employee should be rewarded with 1 hour of pay at the regular rate of pay. 7shifts checks the time punch records to determine if the required breaks were taken on each shift. For more details please review the State of California website.

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Missed Rest Breaks

Rest Breaks are breaks of at least 10 consecutive minutes and must be paid breaks. Depending on the length of shift, 1-4 rest breaks may be required. A break that was counted as a Meal Break, CANNOT also be counted as a Rest Break.

An exception occurs when the required number of Rest Breaks are not taken. For each exception, an employee should be rewarded with 1 hour of pay at the regular rate of pay. For more details please review the State of California website.

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Split Shift

An exception occurs if an employee has two punches, in the same day, separated by 60 minutes or more. For each exception, an employee is entitled to one hour of premium pay at the rate of the minimum wage. This premium pay can be offset if the employee's wage is higher than the minimum wage. For more details please review the State of California website.

Reporting Pay

Reporting Pay is a form of wages that compensates employees who are scheduled to report to work and are sent home before the conclusion of their scheduled shift. These employees are entitled to be paid for unworked hours.

In California, employees who worked half or less than half of their scheduled shift are entitled to be paid for half of their scheduled shift’s hours (at their regular rate of pay). Employees must be paid no less than two hours and no more than four hours.

For example: If an employee is scheduled for an 8-hour shift and works 4 hours or less, they are entitled to 4 hours of pay. If an employee is scheduled for a 3-hour shift and works 1.5 hours or less, they are entitled to 2 hours of pay.

⚠️ Reporting pay may require an upgrade from your current plan.

⚠️ Managers/Assistant Managers require the following permissions to have visibility on this feature: ‘Can manage time punches’, ‘Can manage exceptions’, and ‘Can run reports’.

⚠️ Reporting pay hours do not contribute to the calculation of hours worked, such as overtime hours.

⚠️ If rounding rules have been enabled for 7punches, this may affect shifts eligible for Reporting Pay and the costs associated.

Missed Break Waivers

If an Employee has a missed Meal Break waiver on file, this will be shown in the punch modal. You can indicate in an Employee's profile whether they have signed a waiver for ' 6hrs & out' and '10hrs & out'.

Dismissing a Rest Break can not be done using a waiver, and must use Employee Attestation each time a break is missed.

1. To enable this feature, go to Company Settings > Labor & Compliance > enable 'Meal Breaks' > enable waivers.

2. Navigate to Team > Employee profile > Employment tab to indicate whether that Employee has signed their waiver:

These indications are then shown in the punch edit modal for that Employee:

Skip to here for more information on dismissing exception warnings for missed breaks.

View Exception Warnings

Exception warning will appear for Admins and Managers/Assistant Managers in the following areas:

On the Schedule page

To avoid/reduce exceptions, you will be warned about potential exceptions as you make changes to your schedule. Each time you make a change to a shift that causes one or more exceptions, a warning modal will appear indicating the type of exception and the associated cost.

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Before publishing a schedule, view a summary of potential exceptions, costs, and details. Once published, each exception appears in the report.

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Once published, the exception will be recorded in the report.

In the Shift Pool

You will also see a warning when assigning shifts through the Shift Pool that could cause an exception:

In Time Clocking

On the Time Clocking page as an exception warning:

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On a Punch Overview:

Exceptions for missed breaks and split shifts will show on the left side of the punch.

If an Employee misses a Meal Break or a Rest Break, these exceptions can be dismissed from within the punch modal.

To dismiss the missed break exceptions based on Employee waivers, click on the break and then 'Dismiss Exception'.

⚠️ Dismissing a Rest Break can not be done using a waiver, and must use Employee Attestation each time a break is missed.

The exception warning will then be faded /ignored. You can restore the exception by clicking on it again, then 'Restore Exception'.

Click here to view all 7punches settings.

Admins and Managers/Assistant Managers (with permissions) can click on the warning to further dismiss/restore an exception warning:
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In Reports

The Worked Hours and Wages Report:

Similarly, you can export the report directly from a closed timesheet:

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The Labor Exceptions Report:

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The Punch Audit Report, when the exception has been dismissed:

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More Compliance Tools

Check out this article to manage labor exceptions even further with automatically dismissed meal break waivers, and attestations.

Labor Exceptions Report
Exceptions Costs in Labor Calculations & Reports
Getting Started: 7punches and Time Clocking