IN THE SUPREME COURT OF 

CALIFORNIA

JESSICA FERRA et al.,

Plaintiffs and Appellants,

v.

LOEWS HOLLYWOOD HOTEL, LLC,

Defendant and Respondent.

S259172

Second Appellate District, Division Three

B283218

Los Angeles County Superior Court

BC586176

July 15, 2021

Justice Liu authored the opinion of the Court, in which Chief 

Justice Cantil-Sakauye and Justices Corrigan, Cuéllar, 

Kruger, Groban, and Jenkins concurred.
1

FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

S259172

Opinion of the Court by Liu, J.

Under California law, employers must provide employees 

with overtime pay when employees work more than a certain 

amount of time. (Lab. Code, § 510, subd. (a) (section 510(a)); all 

undesignated statutory references are to this code.) To calculate 

overtime pay, section 510(a) requires an employer to 

compensate an employee by a multiple of the employee’s 

“regular rate of pay.” California law also provides for meal, rest, 

and recovery periods. If an employer does not provide an 

employee with a compliant meal, rest, or recovery period, section 

226.7, subdivision (c) (section 226.7(c)) requires the employer to 

“pay the employee one additional hour of pay at the employee’s 

regular rate of compensation.”

The question here is whether the Legislature intended 

“regular rate of compensation” under section 226.7(c) to have the 

same meaning as “regular rate of pay” under section 510(a), 

such that the calculation of premium pay for a noncompliant 

meal, rest, or recovery period, like the calculation of overtime 

pay, must account for not only hourly wages but also other 

nondiscretionary payments for work performed by the employee. 

We hold that the terms are synonymous: “regular rate of 

compensation” under section 226.7(c), like “regular rate of pay” 

under section 510(a), encompasses all nondiscretionary 

payments, not just hourly wages.
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

2

I.

From June 16, 2012, to May 12, 2014, defendant Loews 

Hollywood Hotel, LLC (Loews), employed plaintiff Jessica Ferra 

as a bartender. Loews paid Ferra hourly wages as well as 

quarterly nondiscretionary incentive payments. We use the 

term “nondiscretionary payments” to mean payments for an 

employee’s work that are owed “pursuant to [a] prior contract, 

agreement, or promise,” not “determined at the sole discretion

of the employer.” (Division of Labor Standards Enforcement

(DLSE), Update of the DLSE Enforcement Policies and 

Interpretations Manual (rev. 2019) § 49.1.2.4(3), p. 49-3 (2019

DLSE Manual), citing 29 C.F.R. §§ 778.211, 778.213 (2021); see 

C.F.R. § 778.211 (2021) [a payment is discretionary if “both the 

fact that payment is to be made and the amount of the payment 

are determined at the sole discretion of the employer . . . and not 

pursuant to any prior contract, agreement, or promise causing 

the employee to expect such payments regularly”]; see also

Alvarado v. Dart Container Corp. of California (2018) 4 Cal.5th 

542, 561 (Alvarado) [“[I]t is the court’s task to construe how 

‘regular rate of pay’ should be calculated in the circumstances 

presented here.”]; CACI No. 2702 [noting that court, not jury,

determines appropriate rate of compensation for overtime].) If 

an hourly employee was not provided with a compliant meal or 

rest period, Loews paid the employee an additional hour of pay 

according to the employee’s hourly wage at the time the meal or 

rest period was not provided. If the employee earned any 

nondiscretionary payments in addition to an hourly wage, like 

Ferra’s quarterly incentive payments, Loews did not factor these 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

3

payments into the calculation of premium pay owed under 

section 226.7(c).

In 2015, Ferra filed a class action suit against Loews. 

Among other claims, Ferra alleged that Loews, by omitting 

nondiscretionary incentive payments from its calculation of 

premium pay, failed to pay her for noncompliant meal or rest 

breaks in accordance with her “regular rate of compensation” as 

required by section 226.7(c). The trial court granted summary 

adjudication for Loews on the ground that calculating premium 

pay according to an employee’s base hourly rate is proper under 

section 226.7(c). The court agreed with Loews that “regular rate 

of compensation” in section 226.7(c) is “not interchangeable” 

with the term “regular rate of pay” under section 510(a), which 

governs overtime pay. In light of this holding, the court held 

that Loews’s due process challenge to section 226.7 was moot. 

The court granted summary judgment to Loews on Ferra’s 

remaining causes of action.

The Court of Appeal affirmed, holding that “regular rate 

of compensation” in section 226.7(c) and “regular rate of pay” in 

section 510(a) are “not synonymous, and the premium for missed 

meal and rest periods is the employee’s base hourly wage.” 

(Ferra v. Loews Hollywood Hotel, LLC (2019) 40 Cal.App.5th 

1239, 1246 (Ferra).) Justice Edmon dissented on this point. 

Tracing the history of sections 510(a) and 226.7(c) and the 

meaning of “regular rate” in case law and legislative usage, she 

concluded that “ ‘regular rate of compensation’ has the same 

meaning as ‘regular rate of pay,’ and thus . . . includes 

nondiscretionary bonuses ‘[that] are a normal and regular part 

of [an employee’s] income.’ ” (Ferra, at p. 1255 (conc. & dis. opn. 

of Edmon, P. J.).)
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

4

We granted review.

II.

Section 226.7(c) provides: “If an employer fails to provide 

an employee a meal or rest or recovery period in accordance with 

a state law, . . . the employer shall pay the employee one 

additional hour of pay at the employee’s regular rate of 

compensation for each workday that the meal or rest or recovery 

period is not provided.” Similar language appears in a wage 

order promulgated by the Industrial Welfare Commission 

(IWC). (See Augustus v. ABM Security Services, Inc. (2016) 2 

Cal.5th 257, 262, fn. 5 [IWC is empowered to promulgate 

“legislative regulations specifying minimum requirements with 

respect to wages, hours, and working conditions”].) IWC Wage 

order No. 5-2001, which applies to hotel workers, bartenders, 

and similar workers, says that if an employer does not provide 

a compliant meal or rest period, “the employer shall pay the 

employee one (1) hour of pay at the employee’s regular rate of 

compensation for each work day that” the meal or rest period is 

not provided. (IWC wage order No. 5-2001, §§ 11(B), 12(B)

(Wage Order No. 5-2001); see id., § 2(P)(1)–(2); Gerard v. Orange 

Coast Memorial Medical Center (2018) 6 Cal.5th 443, 448 

(Gerard) [wage and hour claims, including meal and rest break 

claims, “are ‘governed by two complementary and occasionally 

overlapping sources of authority,’ ” i.e., the Labor Code and 

wage orders].)

“ ‘When construing the Labor Code and wage orders, we 

adopt the construction that best gives effect to the purpose of the 

Legislature and the IWC. . . . Time and again, we have 

characterized that purpose as the protection of employees —

particularly given the extent of legislative concern about 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

5

working conditions, wages, and hours when the Legislature 

enacted key portions of the Labor Code. . . . In furtherance of 

that purpose, we liberally construe the Labor Code and wage 

orders to favor the protection of employees.’ ” (Troester v. 

Starbucks Corp. (2018) 5 Cal.5th 829, 839, citations omitted.) In 

construing a statute or wage order whose language is 

susceptible of more than one reasonable interpretation, we 

consider “the ostensible objectives to be achieved by the statute, 

the evils to be remedied, the legislative history, public policy, 

contemporaneous administrative construction and the statutory 

scheme of which the statute is a part.” (Murphy v. Kenneth Cole 

Productions, Inc. (2007) 40 Cal.4th 1094, 1105 (Murphy).)

The question is what the Legislature meant when it used 

the phrase “regular rate of compensation” in section 226.7(c). 

Neither the Labor Code nor Wage Order No. 5-2001 defines the 

term, and the words by themselves may reasonably be construed 

to mean either hourly wages, as Loews contends, or hourly 

wages plus nondiscretionary payments, as Ferra contends. 

Central to the parties’ dispute is a comparison of the term 

“regular rate of compensation” in section 226.7(c), which 

addresses premium pay for meal, rest, or recovery period

violations, with the term “regular rate of pay” in section 510(a), 

which addresses overtime pay. Did the Legislature intend 

“regular rate of compensation” to be synonymous with “regular 

rate of pay,” a term long understood to encompass not only 

hourly wages but also nondiscretionary payments?

The Court of Appeal answered no, relying on the principle 

that “ ‘[w]here different words or phrases are used in the same 

connection in different parts of a statute, it is presumed the 

Legislature intended a different meaning.’ ” (Ferra, supra, 40 

Cal.App.5th at p. 1247.) But another principle of construction
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

6

provides that “where statutes use synonymous words or phrases 

interchangeably, those words or phrases should be understood 

to have the same meaning.” (Id. at p. 1256 (conc. & dis. opn. of 

Edmon, P. J.); see id. at p. 1266 [collecting cases].) Section 

226.7(c) and section 510(a) both use the term “regular rate,” and 

the history of these provisions shows that “regular rate” is a 

term of art encompassing not only hourly wages but also 

nondiscretionary payments. Further, as explained below, the 

words “compensation” and “pay” appear interchangeably in 

legislative and judicial usage, and we find no indication that the 

Legislature intended “regular rate of pay” in section 510(a) and 

“regular rate of compensation” in section 226.7(c) to have 

different meanings. Specifically, we find no evidence that 

“regular rate of compensation” means hourly wages only.

A.

“When the Legislature adopted section 226.7 in 2000, it 

did so against the backdrop of long-standing federal law that 

defined overtime pay in terms of an employee’s ‘regular rate,’ 

and existing state law that defined overtime pay in terms of an 

employee’s ‘regular rate of pay.’ ” (Ferra, supra, 40 Cal.App.5th 

at p. 1257 (conc. & dis. opn. of Edmon, P. J.).) This historical 

backdrop is essential to understanding what the Legislature 

meant by “regular rate of compensation” in section 226.7(c).

Section 7(a) of the federal Fair Labor Standards Act of 

1938 (FLSA) required employers to pay overtime “at a rate not 

less than one and one-half times the regular rate at which he is 

employed.” (Pub.L. No. 75-718 (June 25, 1938) 52 Stat. 1060, 

1063; see 29 U.S.C. § 207(a).) Although Congress did not define 

“regular rate,” the United States Supreme Court soon held that 

an employee’s “regular rate” under the statute must reflect “the 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

7

actual payments, exclusive of those paid for overtime, which the 

parties have agreed shall be paid during each workweek.” 

(Walling v. Harnischfeger Corp. (1945) 325 U.S. 427, 430

(Harnischfeger); see Walling v. Hardwood Co. (1945) 325 U.S. 

419, 424 (Hardwood) [“The regular rate by its very nature must 

reflect all payments which the parties have agreed shall be 

received regularly during the workweek, exclusive of overtime 

payments.”].)

For workers paid a guaranteed hourly rate plus an 

“ ‘incentive bonus’ or ‘piecework earnings’ ” (Harnischfeger, 

supra, 325 U.S. at p. 429) for efficient performance, the “regular 

rate” is “greater . . . than the minimum base rate” (id. at p. 431). 

Where “such bonuses are a normal and regular part of [workers’] 

income” (id. at p. 432), they “do not escape the force of [FLSA] 

§ 7(a) merely because they are paid in addition to a minimum 

hourly pay guaranteed by contract. . . . The conclusion that only 

the minimum hourly rate constitutes the regular rate opens an 

easy path for evading the plain design of § 7(a)” (id. at pp. 431–

432). Further, even if “the incentive bonuses are often not 

determined or paid until weeks or even months after [regular] 

pay-days” (id. at p. 432), “the employer is not thereby excused 

from making the proper computation and payment. Section 7(a) 

requires only that the employees receive a 50% premium as soon 

as convenient or practicable under the circumstances” (id. at 

pp. 432–433).

Congress amended the FLSA in 1949 to define “regular 

rate” for purposes of overtime “to include all remuneration for 

employment paid to, or on behalf of, the employee” (Pub.L. 

No. 81-393 (Oct. 26, 1949) 63 Stat. 910, 913; see 29 U.S.C. 

§ 207(e)), and courts have consistently understood this language 

to encompass all nondiscretionary payments, not just base 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

8

hourly rates. (See Local 246 Utility Workers Union of America 

v. Southern California Edison Co. (9th Cir. 1996) 83 F.3d 292, 

295–297; Featsent v. City of Youngstown (6th Cir. 1995) 70 F.3d 

900, 904–906; Reich v. Interstate Brands Corp. (7th Cir. 1995) 

57 F.3d 574, 577; see also Rosen et al., Federal Employment 

Litigation (The Rutter Group 2021) ¶ 6:905 [observing that 

“[a]ny bonus promised to employees is included in determining 

the employee’s ‘regular rate’ of pay” and collecting cases].)

Meanwhile, as early as 1947, California’s wage orders 

imposed similar requirements for overtime pay. (See Ramirez 

v. Yosemite Water Co. (1999) 20 Cal.4th 785, 795 [IWC’s wage 

orders are “at times patterned after federal regulations” and 

“sometimes provide greater protection”]; Alcala v. Western Ag 

Enterprises (1986) 182 Cal.App.3d 546, 550 (Alcala) 

[“California’s wage orders are closely modeled after (although 

they do not duplicate), section 7(a)(1) of the [FLSA].”].) But 

instead of using the term “regular rate,” the wage orders used 

the term “regular rate of pay” in stating the requirement that 

“overtime is compensated for at not less than one and one-half 

times the employee’s regular rate of pay.” (IWC wage order 

No. 10 R (June 1, 1947) [former wage order concerning 

amusement and recreation industries]; see IWC wage order 

No. 3 R (June 1, 1947) [former wage order concerning canning 

and preserving industries]; IWC wage order No. 6 R (June 1, 

1947) [former wage order concerning laundry, dry cleaning, and 

dyeing industries]; IWC wage order No. 8 R (June 1, 1947) 

[former wage order concerning after-harvest industries].) The 

term “regular rate of pay” also appears in the 1947 version of 

Wage Order No. 5 (IWC wage order No. 5 R (June 1, 1947)) and 

in other predecessors to the current version of Wage Order No. 5 

(e.g., IWC wage order No. 5-89 (as amended June 29, 1993)).
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

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Despite this difference in wording, the Alcala court 

understood “regular rate of pay” in a wage order governing 

agricultural occupations to be synonymous with “regular rate” 

in the FLSA. (Alcala, supra, 182 Cal.App.3d at pp. 548–551 & 

fns. 1–2.) The DLSE, in multiple opinion letters, similarly said 

that “in determining what payments are to be included in or 

excluded from the calculation of the regular rate of pay, 

California will adhere to the standards adopted by the U.S. 

Department of Labor to the extent that those standards are 

consistent with California law.” (Dept. of Industrial Relations, 

DLSE, Chief Counsel H. Thomas Cadell, Jr., Opn. Letter 

No. 2003.01.29, Calculation of Regular Rate of Pay (Jan. 29, 

2003) p. 2, fn. 1; see, e.g., Dept. of Industrial Relations, DLSE, 

Chief Counsel H. Thomas Cadell, Jr., Opn. Letter 

No. 1994.06.17-1, Regular Rate of Pay (June 17, 1994) p. 2; 

Dept. of Industrial Relations, DLSE, Chief Counsel H. Thomas 

Cadell, Jr., Opn. Letter No. 1991.03.06, Calculation of Regular 

Rate of Pay (Mar. 26, 1991) p. 1.) And the DLSE’s 1998 

Enforcement Policies and Interpretations Manual (1998 DLSE 

Manual) stated: “Since the Industrial Welfare Commission has 

not defined the term ‘regular rate of pay,’ DLSE has determined 

that the IWC intended to adopt the definition of ‘regular rate of 

pay’ set out in the Fair Labor Standards Act . . . .” (1998 DLSE 

Manual, p. 84; see Alvarado, supra, 4 Cal.5th at p. 561 [in 

construing California’s labor laws, “we may take into 

consideration the DLSE’s expertise and special competence, as 

well as the fact that the DLSE Manual is a formal compilation 

that evidences considerable deliberation at the highest 

policymaking level of the agency”].)

The term “regular rate of pay” first appeared in section 

510 in 1999. That year, “the Legislature enacted Assembly Bill 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

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No. 60 (1999–2000 Reg. Sess.) (Assembly Bill 60), known as the 

Eight-Hour-Day Restoration and Workplace Flexibility Act of 

1999 (Stats. 1999, ch. 134, § 1, p. 1820). This bill was passed in 

response to IWC wage orders that had eliminated overtime for 

employees working more than eight hours per day. The 

legislation repealed five wage orders, . . . and required the IWC 

to review its wage orders and readopt orders restoring daily 

overtime. [Citation.] The Legislature amended Labor Code 

section 510 to explicitly provide that ‘[a]ny work in excess of 

eight hours in one workday . . . shall be compensated at the rate 

of no less than one and one-half times the regular rate of pay for 

an employee.’ (Stats. 1999, ch. 134, § 4, p. 1821; cf. Stats. 1982, 

ch. 185, § 1, p. 563 [earlier version of § 510 without that 

provision].)” (Gerard, supra, 6 Cal.5th at pp. 448–449; see 

Alvarado, supra, 4 Cal.5th at p. 553.)

Like the DLSE, courts have understood “regular rate of 

pay” in section 510(a) to have the same meaning as “regular 

rate” in the FLSA. Citing the DLSE’s opinion letters, the court 

in Huntington Memorial Hospital v. Superior Court (2005) 131 

Cal.App.4th 893, 902–911 (Huntington) interpreted section 

510(a) in accordance with the meaning of “regular rate” in the 

FLSA, as elucidated in federal regulations and case law. (See, 

e.g., Hardwood, supra, 325 U.S. at p. 424.) Notably, the

Huntington court treated “regular rate” as the operative term in 

section 510(a)’s phrase “regular rate of pay.” (Huntington, at 

p. 902 [“Under state and federal law, overtime compensation is 

based on an employee’s ‘regular rate.’ (See Lab. Code, § 510, 

subd. (a); 29 U.S.C. § 207(a)(1), (2).)”]; see Kao v. Holiday (2017) 

12 Cal.App.5th 947, 960, fn. 5 [following Huntington]; 

Advanced-Tech Security Services v. Superior Court (2008) 

163 Cal.App.4th 700, 708 (Advanced-Tech) [same].)
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Opinion of the Court by Liu, J.

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In addition, we recently said that “an employee’s ‘regular 

rate of pay’ for purposes of Labor Code section 510 and the IWC 

wage orders is not the same as the employee’s straight time rate 

(i.e., his or her normal hourly wage rate). Regular rate of pay, 

which can change from pay period to pay period, includes 

adjustments to the straight time rate, reflecting, among other 

things, shift differentials and the per-hour value of any 

nonhourly compensation the employee has earned.” (Alvarado, 

supra, 4 Cal.5th at p. 554; see id. at p. 569 [“Not all employees 

earn at a fixed pay rate throughout a pay period, and therefore 

regular rate of pay is a weighted average reflecting work done at 

varying times, under varying circumstances, and at varying 

rates.”].) Consistent with the meaning of “regular rate” in the 

FLSA, we observed that an “attendance bonus” earned for 

weekend work (a form of “incentive pay”) was “part of an 

employee’s overall compensation package, and therefore . . . its 

per-hour value must be determined so that the employee’s 

regular rate of pay — and, derivatively, the employee’s overtime 

pay rate — reflects all the various forms of regular 

compensation that the employee earned in the relevant pay 

period.” (Alvarado, at p. 554.)

In sum, the history above shows that the term “regular 

rate” in section 7(a) of the FLSA accounts for not only hourly 

wages but also nondiscretionary payments and that the term 

“regular rate of pay” as used in section 510(a) and in the IWC’s 

earlier wage orders has the same meaning as “regular rate” in

the FLSA. With this backdrop in mind, we now turn to the 

phrase “regular rate of compensation” in the context of premium 

pay for a noncompliant meal, rest, or recovery period.
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

12

B.

As noted, when the Legislature passed Assembly Bill No.

60 (1999–2000 Reg. Sess.) (Assembly Bill 60) in 1999, it not only 

enacted section 510 but also directed the IWC to rewrite its wage 

orders to restore daily overtime pay. “Consistent with that

mandate, the IWC adopted a new version of Wage Order No.5 

on June 30, 2000, and it became effective on October 1, 2000.” 

(Gerard, supra, 6 Cal.5th at p. 449; see Brinker Restaurant 

Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1046 (Brinker).)

This wage order, which is the current version, provides that an 

employee who works more than eight hours a day or more than 

40 hours a week must receive one and one-half times the 

employee’s “regular rate of pay” for overtime hours worked. 

(Wage Order No. 5-2001, § 3(A)(1); see id., § 3(A)(1)(b) [requiring 

double the “regular rate of pay” for all hours worked beyond 12 

hours in a day or beyond eight hours on the seventh consecutive 

workday in a workweek].) These overtime provisions in the 

wage order echo the language of section 510(a). (See Brinker, at 

p. 1049 [“Having received a legislative rebuke, the IWC sought 

to make its orders track [Assembly Bill 60] as closely as possible 

and expressed hesitance about departing from statutory 

requirements.”].)

In the same wage order, the IWC for the first time adopted 

provisions requiring premium pay for meal or rest break

violations: “the employer shall pay the employee one (1) hour of 

pay at the employee’s regular rate of compensation” for each 

workday that a compliant meal or rest period is not provided. 

(Wage Order No. 5-2001, §§ 11(B), 12(B).) This is where the 

phrase “regular rate of compensation” first appeared.
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Opinion of the Court by Liu, J.

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An IWC commissioner explained the purpose of these 

provisions at the June 30, 2000 hearing where the IWC adopted 

them. (See Murphy, supra, 40 Cal.4th at pp. 1109–1110 [relying 

on this hearing to discern IWC’s intent in requiring premium 

pay for meal and rest break violations].) The IWC, the

commissioner said, had “received testimony that despite the fact 

that employees are entitled to a meal period or rest period, that 

there really is no incentive as we establish it, for example, in 

overtime or other areas, for employers to ensure that people are 

given their rights to a meal period and rest period. At this point, 

if they are not giving a meal period or rest period, the only 

remedy is an injunction against the employer or — saying they 

must give them.” (IWC public hearing transcript (June 30, 

2000) p. 25.) The new provisions, the commissioner explained,

would ensure that employees received “proper meal periods and 

rest periods.” (Id. at p. 26.) “And, of course,” the commissioner 

concluded, “the courts have long construed overtime as a 

penalty, in effect, on employers for working people more than 

full — you know, that is how it’s been construed, as more than 

the — the daily normal workday. It is viewed as a penalty and 

a disincentive in order to encourage employers not to. So, it is 

in the same authority that we provide overtime pay that we 

provide this extra hour of pay.” (Id. at p. 30.)

Soon thereafter, the IWC memorialized this 

understanding in its Statement as to the Basis, a document 

“explaining ‘how and why the commission did what it did.’ ” 

(Harris v. Superior Court (2011) 53 Cal.4th 170, 179; see 

Brinker, supra, 53 Cal.4th at p. 1046.) In reviewing its wage 

orders “for purposes of complying with AB 60,” “the IWC heard 

testimony and received correspondence regarding the lack of 

employer compliance with the meal and rest period 
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Opinion of the Court by Liu, J.

14

requirements of its wage orders. The IWC therefore added a 

provision to this section that requires an employer to pay an 

employee one additional hour of pay at the employee’s regular 

rate of pay for each work day that a meal period is not provided.” 

(IWC, Statement as to the Basis (Jan. 1, 2001) pp. 1, 20, italics 

added.) The IWC also “added a provision . . . that requires an

employer to pay an employee one additional hour of pay at the 

employee’s regular rate of pay for each work day that a rest 

period is not provided.” (Id. at p. 21, italics added.) As the 

italicized phrases indicate, the IWC used the term “regular rate 

of pay” interchangeably with the wage order’s term “regular rate 

of compensation.” And, as the June 30, 2000 hearing transcript 

suggests, the IWC understood its approach to premium pay for 

meal or rest break violations to be analogous to its approach to 

overtime pay.

We come now to the enactment of section 226.7. The same 

Legislature that passed Assembly Bill 60 considered several

bills containing some version of what became section 226.7; the 

bill that ultimately passed was Assembly Bill No. 2509 (1999–

2000 Reg. Sess.) (Assembly Bill 2509). (See Kirby v. Immoos 

Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1258.) At its 

inception, Assembly Bill 2509 provided that an employer was 

required to pay “the aggrieved employee of an amount equal to 

twice his or her average hourly rate of compensation for the full 

length of the meal or rest periods during which the employee 

was required to perform any work. An employee paid on a 

piecework basis shall be entitled to an amount equal to twice the 

amount of piecework units earned during those periods, but in 

no event shall the amount be less than the applicable state 

minimum wage for the full length of those time periods during 

which any work was performed.” (Assem. Bill 2509 (1999–2000 
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Opinion of the Court by Liu, J.

15

Reg. Sess.) as introduced Feb. 24, 2000, § 12, italics added.) This 

language remained unchanged through two rounds of 

amendments. (Assem. Bill 2509 (1999–2000 Reg. Sess.) as 

amended June 26, 2000; Assem. Bill 2509 (1999–2000 Reg.

Sess.) as amended July 6, 2000.)

With Assembly Bill 2509 pending, the IWC on June 30, 

2000, adopted the meal and rest break provisions in Wage Order 

No. 5-2001. (Ante, at p. 12.) Two months later, Assembly Bill

2509 was amended to provide that “the employer shall pay the 

employee one additional hour of pay at the employee’s regular 

rate of compensation for each work day that the meal or rest 

period is not provided.” (Assem. Bill 2509 (1999–2000 Reg. 

Sess.) as amended Aug. 25, 2000, § 7, italics added.) This 

language is what the Legislature enacted in section 226.7(c). 

The reason for the amendment is clear in the legislative history: 

“In discussing the amended version of section 226.7, which 

ultimately was signed into law, the Senate Rules Committee 

explained that the changes were intended to track the existing 

provisions of the IWC wage orders regarding meal and rest 

periods.” (Murphy, supra, 40 Cal.4th at pp. 1107–1108, citing 

Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis 

of Assem. Bill 2509 (1999–2000 Reg. Sess.) as amended Aug. 25, 

2000, p. 4.) The amendment “[d]elete[d] the provisions related 

to penalties for an employer who fails to provide a meal or rest 

period” (i.e., twice the employee’s average hourly rate of 

compensation) “and instead codif[ies] the alternative penalty 

amounts adopted by the Industrial Welfare Commission” (i.e., 

one additional hour of pay at the employee’s regular rate of 

compensation). (Assem. Conc. Sen. Amends. to Assem. Bill 2509 

(1999–2000 Reg. Sess.) as amended Aug. 25, 2000, p. 2.)
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Opinion of the Court by Liu, J.

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To recap, the IWC adopted a premium pay requirement for 

meal or rest break violations using the term “regular rate of 

compensation” at the same time and in the same wage order 

(i.e., Wage Order No. 5-2001) that it adopted revised overtime 

provisions using the term “regular rate of pay.” The IWC’s 

official explanation of its action described this premium pay as 

“one additional hour of pay at the employee’s regular rate of 

pay.” Then, in enacting section 226.7(c), the Legislature defined 

premium pay for break violations as “one additional hour of pay 

at the employee’s regular rate of compensation” to track the 

meal and rest break provisions of Wage Order No. 5-2001.

C.

In addressing this history, Loews contends that at the 

time the IWC and the Legislature adopted the premium pay 

requirement for meal or rest break violations, the term “regular 

rate of pay” was an established term of art in the specific context 

of California overtime law. It is thus significant, Loews says,

that the IWC and the Legislature, while using “regular rate of 

pay” in addressing overtime in Wage Order No. 5-2001 and 

section 510(a), used a different term — “regular rate of 

compensation” — to define premium pay for meal or rest break 

violations in the same wage order and in section 226.7(c). In 

Loews’s view, the Court of Appeal was correct to apply the canon 

that “ ‘[w]here different words or phrases are used in the same 

connection in different parts of a statute, it is presumed the 

Legislature intended a different meaning.’ ” (Ferra, supra, 

40 Cal.App.5th at p. 1247.)

But canons of interpretation “are not immutable rules”; 

they are “guidelines subject to exceptions.” (Wishnev v. The 

Northwestern Mutual Life Ins. Co. (2019) 8 Cal.5th 199, 213
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

17

[canons cannot be mechanically applied, especially when 

competing canons point in different directions].) Here, Loews’s

argument is difficult to square with the fact that courts and the 

DLSE have consistently understood the term “regular rate of 

pay” to have the same meaning as “regular rate” in the FSLA. 

Although Loews says this “mere fact . . . does not establish that 

‘regular rate’ is itself a term of art under California law,” Loews 

cites no authority that has trained attention on the modifier “of 

pay.” The fact that California authorities, in construing

“regular rate of pay,” have looked to the meaning of “regular 

rate” in the FLSA implies that “regular rate” is the operative 

term of art. (See Advanced-Tech, supra, 163 Cal.App.4th at 

pp. 707–708; Huntington, supra, 131 Cal.App.4th at pp. 902–

905; Alcala, supra, 182 Cal.App.3d at pp. 549–550; Dept. of 

Industrial Relations, DLSE, Chief Counsel H. Thomas Cadell, 

Jr., Opn. Letter No. 2003.01.29, Calculation of Regular Rate of 

Pay, supra, at p. 2, fn. 1 [“[T]he failure of the IWC to define the 

term ‘regular rate’ indicates the Commission’s intent that in 

determining what payments are to be included in or excluded 

from the calculation of the regular rate of pay, California will 

adhere to the standards adopted by the U.S. Department of 

Labor to the extent that those standards are consistent with 

California law.”]; ante, at p. 9 [citing 1994 and 1991 DLSE 

opinion letters and 1998 DLSE Manual].)

Indeed, by the time section 226.7 was enacted, the phrase 

“regular rate” had been in use and had been treated by courts 

and agencies as the operative term for more than half a century. 

(Ante, at pp. 6–11.) There is no sign that the IWC or the 

Legislature believed otherwise when they enacted Wage Order 

No. 5-2001 and sections 510(a) and 226.7(c). The use of “regular 

rate” in those contemporaneous enactments to define both 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

18

overtime pay and premium pay for break violations calls to mind 

a different canon: “Similar terms should be given consistent 

meaning when used in the same statutory scheme unless there 

is evidenced a contrary statutory intent.” (People v. Cook (1984) 

158 Cal.App.3d 948, 954.)

Loews sees evidence of a contrary intent in the 

Legislature’s and IWC’s use of “regular rate” with different 

modifiers, i.e., “of pay” and “of compensation.” But neither the 

adoption history of the phrase “regular rate of compensation” 

nor the provisions in which it appears contain any hint that the 

Legislature or the IWC intended it to mean something different 

than “regular rate of pay” or specifically to mean an employee’s 

hourly rate only. In fact, the Legislature used the terms “pay” 

and “compensation” interchangeably in the very text of sections 

226.7(c) and 510(a). (See § 226.7(c) [“the employer shall pay the 

employee one additional hour of pay at the employee’s regular 

rate of compensation” (italics added)]; § 510(a) [overtime “shall 

be compensated at the rate of [a multiple of] the regular rate of 

pay” (italics added)]; ibid. [“Nothing in this section requires an 

employer to combine more than one rate of overtime 

compensation in order to calculate the amount to be paid to an 

employee for any hour of overtime work.” (italics added)].) The 

IWC similarly described its requirement of “one (1) hour of pay 

at the employee’s regular rate of compensation” for each 

workday that a compliant meal or rest period is not provided 

(Wage Order No. 5-2001, §§ 11(B), 12(B), italics added) as “one 

additional hour of pay at the employee’s regular rate of pay” 

(IWC, Statement as to the Basis, supra, at pp. 20, 21, italics 

added).

The fact that the Legislature and IWC used “pay” and 

“compensation” interchangeably is unsurprising against the 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

19

backdrop of similar interchangeable usage in case law. (See Bay 

Ridge Operating Co. v. Aaron (1948) 334 U.S. 446, 448–449 

[using “regular rate of pay” to mean “regular rate” under the 

FLSA]; Hardwood, supra, 325 U.S. at p. 424 [using “regular rate 

of compensation” to mean “regular rate”]; Harnischfeger, supra, 

325 U.S. at p. 430 [same]; Walling v. Garlock Packing Co. (2d 

Cir. 1947) 159 F.2d 44, 46 [same]; Walling v. Wall Wire Products 

Co. (6th Cir. 1947) 161 F.2d 470, 473, 475 [using both “regular 

rate of pay” and “ ‘regular rate’ of compensation” to mean 

“regular rate”].) It is doubtful that the phrase “regular rate of 

compensation” came to have a distinct meaning that the 

Legislature and IWC silently discerned in the year 2000, but 

that the courts until then never had.

Loews cites several federal district court opinions holding 

that “regular rate of compensation” in section 226.7(c) does not 

have the same meaning as “regular rate of pay” in section 510(a) 

and instead means an employee’s base hourly rate only. But 

those opinions did not examine the history of the provisions at 

issue; they mainly relied on the canon that “ ‘[i]f the legislature 

carefully employs a term in one statute and deletes it from 

another, it must be presumed to have acted deliberately.’ ”

(Brum v. MarketSource, Inc. (E.D.Cal., June 19, 2017, No. 2:17–

cv–241–JAM–EFB) 2017 WL 2633414, p. *5; see Wert v. U.S. 

Bancorp (S.D.Cal., June 9, 2015, No. 13–cv–3130–BAS (BLM)) 

2015 WL 3617165, p. *3 [“[T]he legislature’s choice of different 

language is meaningful . . . .”]; Bradescu v. Hillstone Restaurant 

Group, Inc. (C.D.Cal., Sept. 18, 2014, No. SACV 13–1289–

GW (RZx)) 2014 WL 5312546, p. *8 [same]; but see Studley v. 

Alliance Healthcare Services, Inc. (C.D.Cal., July 26, 2012, 

No. SACV 10–00067–CJC (ANx)) 2012 WL 12286522, p. *4, 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

20

fn. 4 [“[T]he operative word or phrase in each section is not 

‘compensation’ or ‘pay’ but rather ‘regular rate.’ ”].)

Justice Edmon, upon examining the history, aptly 

described the difficulty with Loews’s position: “In 1999, ‘regular 

rate’ [in the FLSA] was widely understood to mean base hourly 

rate plus bonuses. Although the Legislature modified the 

federal language when it adopted section 510, the Legislature 

intended ‘regular rate of pay’ to have the same meaning as 

‘regular rate.’ But although the Legislature modified the federal 

language in a similar (although not identical) manner when it 

adopted section 226.7, [Loews contends] it intended an entirely 

different meaning — and although it nowhere articulated that 

intended meaning, it expected parties and the courts to infer the 

meaning by its use of the word ‘compensation,’ rather than ‘pay.’

I am not persuaded.” (Ferra, supra, 40 Cal.App.5th at p. 1265 

(conc. & dis. opn. of Edmon, P. J.).) Neither are we.

D.

Loews suggests that interpreting “regular rate of 

compensation” and “regular rate of pay” to be synonymous 

would render the words “of compensation” and “of pay” 

superfluous. It is true that courts should generally avoid 

interpreting statutes in a way that renders some terms 

surplusage. (Kaanaana v. Barrett Business Services, Inc. (2021) 

11 Cal.5th 158, 176.) But “ ‘ “ ‘the rule against surplusage will 

be applied only if it results in a reasonable reading of the 

legislation.’ ” ’ ” (Ferra, supra, 40 Cal.App.5th at p. 1265 (conc. 

& dis. opn. of Edmon, P. J.), quoting Park Medical Pharmacy v. 

San Diego Orthopedic Associates Medical Group, Inc. (2002) 99 

Cal.App.4th 247, 254, fn. 5.) To attribute “controlling 

significance to the modifier ‘of compensation’ ” would lead “to an 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

21

entirely unreasonable conclusion — namely, that the 

Legislature used the phrase ‘regular rate’ in section 226.7 

without intending the meaning ‘regular rate’ had acquired over 

the course of more than 60 years.” (Ferra, at p. 1265 (conc. & 

dis. opn. of Edmon, P. J.).) Had the Legislature intended to 

diverge from decades of settled usage and, in effect, compel 

employers to make complex judgments about what is and what 

is not part of an employee’s “regular rate of compensation,” it 

likely would have said so. (See Jones v. Lodge at Torrey Pines 

Partnership (2008) 42 Cal.4th 1158, 1171.)

Loews further contends that “[t]he rationale for defining 

‘regular rate of pay’ to include forms of pay other than the base 

hourly rate — to ensure employers do not circumvent overtime 

laws by paying a low hourly rate — is logically inapplicable to 

break premiums, which unlike overtime premiums are not 

proportional to time worked and may be owed to employees who 

perform no overtime work.” According to Loews, “ ‘pay’ 

invariably is given for goods or services rendered, while 

‘compensation’ additionally may pertain to remuneration for a 

loss — such as deprivation of a legally-required meal break or 

rest period. This distinction aptly reflects this Court’s 

recognition that break premiums are designed to preserve 

employees’ health and welfare, as opposed to overtime 

premiums which are calculated to provide full wages for work 

performed.”

But even if we were to agree with Loews that 

“compensation” and “pay” mean different things, there is little 

reason to think the former would mean something narrower 

than the latter. (Compare Black’s Law Dict. (11th ed. 2019) 

[Defining “compensation” as “ ‘[Compensation] includes wages, 

stock option plans, profit-sharing, commissions, bonuses, golden 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

22

parachutes, vacation, sick pay, medical benefits, disability, 

leaves of absence, and expense reimbursement’ ”] with id.

[defining “Pay” as “Compensation for services performed; salary, 

wages, stipend, or other renumeration given for work done”].)

Further, we have previously rejected the argument that 

because premium pay under section 226.7(c) is “not proportional 

to time worked,” it is “unlike overtime premiums.” In Murphy, 

we acknowledged that “a one-to-one ratio does not exist between 

the economic injury caused by meal and rest period violations 

on the one hand and the remedy selected by the Legislature on 

the other hand.” (Murphy, supra, 40 Cal.4th at p. 1112.) 

Nevertheless, we said, premium pay under section 226.7(c) does 

not differ in this respect from other remedies the Legislature 

has chosen “to compensate employees for certain kinds of labor 

or scheduling resulting in a detriment to the employee.” 

(Murphy, at p. 1112.) We gave three examples of such remedies, 

including overtime premiums under section 510(a). (Murphy, at 

pp. 1112–1113.) “Each of these forms of compensation, like the

section 226.7 payment, uses the employee’s rate of 

compensation” — note again the interchangeable usage — “as 

the measure of pay and compensates the employee for events 

other than time spent working. An employee working nine 

hours already receives his or her normal wage for that ninth 

hour. The Legislature has directed, however, that employers 

pay a premium wage of 50 percent more for the ninth through 

twelfth hour and a 100 percent premium for the hours in excess 

of 12.” (Id. at p. 1113.)

As Murphy makes clear, contrary to Loews’s argument, 

the 50 percent (or 100 percent) overtime premium (§ 510(a)), like

the “additional hour of pay” premium for meal or rest break 

violations (§ 226.7(c)), “compensates the employee for events 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

23

other than time spent working.” (Murphy, supra, 40 Cal.4th at 

p. 1113, italics added.) Employees may suffer “noneconomic 

injuries” when they are forced to work through break periods, 

like “greater risk[s] of work-related accidents and increased 

stress,” or denials of “time free from employer control that is 

often needed to be able to accomplish important personal tasks.” 

(Ibid.; see Alvarado, supra, 4 Cal.5th at p. 561, fn. 7 [quoting 

Legislature’s statements in Assem. Bill 60 (Stats. 1999, ch. 134, 

§ 2, p. 1820) that “ ‘[t]he eight-hour workday is the mainstay of 

protection for California’s working people’; ‘[n]umerous studies 

have linked long work hours to increased rates of accident and 

injury’; [and] ‘[f]amily life suffers when either or both parents 

are kept away from home for an extended period of time on a 

daily basis’ ”].) We see nothing illogical about using the same 

metric (“regular rate”) to calculate the amount of the premium 

owed in both contexts. “While it may be difficult to assign a 

value to these noneconomic injuries [citation], the Legislature 

has selected an amount of compensation it deems appropriate.” 

(Murphy, at p. 1113.)

Instead of furthering section 226.7(c)’s purpose, 

construing “regular rate of compensation” in the manner Loews 

urges would produce consequences that the Legislature likely 

did not intend. To adapt an example from Ferra’s briefing, 

suppose Employees A, B, and C each work for a chair 

manufacturer with a different compensation scheme. Employee

A is paid a straight hourly rate of $25 per hour. Employee B is 

paid $50 per chair, plus the hourly rate for meal and rest periods 

required by law (and assume there is no other nonproductive 

time during the workday). (See § 226.2 [governing piece-rate 

compensation].) And Employee C is paid $20 per hour, plus $10 

per chair. Suppose further that, in a five-day workweek, each 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

24

employee makes 20 chairs by working eight hours a day (i.e., no 

overtime).

In one week, Employee A earns $1,000 ($25 per hour 

multiplied by 40 hours), as do Employee B ($50 per chair 

multiplied by 20 chairs) and Employee C ($20 per hour 

multiplied by 40 hours, plus $10 per chair multiplied by 20 

chairs). The hourly pay for each employee is $25 per hour

($1,000 divided by 40 hours). There is no dispute that $25 per 

hour is the “regular rate of compensation” for purposes of 

calculating meal or rest break premium pay for Employees A 

and B. (See 2002 DLSE Manual, supra, at p. 49-6.) But under 

Loews’s position, the “regular rate of compensation” for 

Employee C is only the base hourly rate of $20 per hour. 

We see no reason why the Legislature or IWC would have 

singled out workers like Employee C, who receive both hourly 

wages and other nondiscretionary payments, for such 

disadvantage instead of requiring premium pay in accordance 

with the total nondiscretionary payments earned by each 

employee. Were we to adopt Loews’s interpretation, employers 

would be incentivized to minimize employees’ base hourly rates 

and shift pay elsewhere, thereby harming employees who are 

paid in some form other than a base hourly rate. Loews’s 

interpretation thus undercuts one of section 226.7’s 

functions: “shaping employer conduct” to comply with labor 

standards. (Murphy, supra, 40 Cal.4th at p. 1109; see id. at 

p. 1110 [“The IWC intended that, like overtime pay provisions, 

payment for missed meal and rest periods be enacted as a 

premium wage to compensate employees, while also acting as 

an incentive for employers to comply with labor standards.”].)
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

25

Assembly Bill 2509’s legislative history also weighs

against Loews’s reading. As noted, Assembly Bill 2509 

originally included differentiated remedies for piece-rate 

workers and hourly workers. (Ante, at p. 14.) But these were 

replaced with one remedy for all workers: an hour of pay at the 

“regular rate of compensation,” whatever the underlying basis 

of their compensation. (Ante, at pp. 14–15.) This early iteration

of Assembly Bill 2509 shows that the Legislature was equally 

concerned with protecting piece-rate workers and hourly 

workers, and it supports an inference that the Legislature 

believed the language it ultimately adopted — “regular rate of 

compensation” — would protect workers equally, regardless of 

how their compensation is structured.

In sum, we hold that the term “regular rate of 

compensation” in section 226.7(c) has the same meaning as 

“regular rate of pay” in section 510(a) and encompasses not only 

hourly wages but all nondiscretionary payments for work 

performed by the employee. This interpretation of section 

226.7(c) comports with the remedial purpose of the Labor Code 

and wage orders and with our general guidance that the “state’s 

labor laws are to be liberally construed in favor of worker 

protection.” (Alvarado, supra, 4 Cal.5th at p. 562.)

III.

Finally, Loews argues that our decision today should 

apply only prospectively. But no considerations of fairness or 

public policy warrant such a holding.

In general, judicial decisions apply retroactively. 

(Vazquez v. Jan-Pro Franchising International, Inc. (2021) 10 

Cal.5th 944, 951 (Vazquez); see Newman v. Emerson Radio 

Corp. (1989) 48 Cal.3d 973, 978.) This rule applies to decisions 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

26

interpreting statutes, for “ ‘[a] judicial construction of a statute 

is an authoritative statement of what the statute meant before 

as well as after the decision of the case giving rise to that 

construction.’ ” (Vazquez, at p. 951.) And the fact that a decision 

disapproves decisions by lower courts does not itself justify 

applying our decision prospectively only. (Id. at p. 952.) We 

recognize “ ‘narrow exceptions to the general rule of 

retroactivity . . . when considerations of fairness and public 

policy are so compelling in a particular case that, on balance, 

they outweigh the considerations that underlie the basic rule.’ ” 

(Ibid.)

In this case, we interpret a statute against the backdrop 

of a divided Court of Appeal decision and conflicting opinions of 

various federal district courts. We neither overrule nor 

disapprove any decision. Because the question presented is not 

one on “ ‘which this court had previously issued a definitive 

decision, from the outset any reliance on the previous state of 

the law could not and should not have been viewed as firmly 

fixed as would have been the case had we previously spoken.’ ” 

(Vazquez, supra, 10 Cal.5th at p. 953.) “In short, defendant

cannot claim reasonable reliance on settled law.” (Alvarado, 

supra, 4 Cal.5th at p. 573.)

Loews argues, first, that it and employers like it 

reasonably relied on the canon that a lawmaker is presumed to 

intend a different meaning when it uses different words in a 

statutory scheme. But it is well established that “canons of 

statutory construction are merely aids to ascertaining probable 

legislative intent.” (Stone v. Superior Court (1982) 31 Cal.3d 

503, 521, fn. 10.) “ ‘ “No single canon of statutory construction

is an infallible guide to correct interpretation in all 

circumstances” ’ ” (Tellez v. Superior Court (2020) 56 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

27

Cal.App.5th 439, 448), and “canons of construction . . . will not

be applied so as to defeat the underlying legislative intent 

otherwise determined” (Dyna-Med, Inc. v. Fair Employment &

Housing Com. (1987) 43 Cal.3d 1379, 1391). As explained above, 

the considerations bearing on the IWC’s and Legislature’s intent 

do not support the application of the canon cited by Loews.

Second, relying on Claxton v. Waters (2004) 34 Cal.4th 367 

(Claxton), Loews argues that our decision will have a 

substantive effect because it will expose employers to “millions”

in liability. But Loews cites no evidence that retroactive 

application of our holding will expose employers to “millions” in 

liability, and even if Loews were correct, it is not clear why we 

should favor the interest of employers in avoiding “millions” in 

liability over the interest of employees in obtaining the 

“millions” owed to them under the law.

Further, Claxton does not suggest that retroactivity is 

disfavored when a judicial decision may have the substantive 

effect of imposing liability. In Claxton, we explained that one 

consideration relevant to the retroactivity determination was 

“ ‘ “the nature of the change as substantive or procedural.” ’ ” 

(Claxton, supra, 34 Cal.4th at p. 378, quoting Smith v. RaeVenter Law Group (2002) 29 Cal.4th 345, 372.) In Smith, we

relied on Woods v. Young (1991) 53 Cal.3d 315, where we

declined to apply retroactively our decision involving a statute 

of limitations for medical malpractice actions. (Woods, at 

p. 330.) The decision in Woods was “procedural, affecting only 

the calculation of the limitations period.” (Ibid.) “Prospective 

application will not remove any substantive defense to which 

defendants would otherwise be entitled,” we explained, but 

retroactive application “would bar plaintiffs’ actions regardless 

of their merits.” (Ibid. [“Retroactive application of an 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

28

unforeseeable procedural change is disfavored when such 

application would deprive a litigant of ‘any remedy 

whatsoever.’ ”].) Here, our decision will not deprive any litigant 

of a remedy or defense. An employee may claim that his or her 

employer has violated section 226.7, and the employer may 

defend against such a claim as it has always done. We have 

simply determined how the Legislature intended premium pay 

to be calculated under section 226.7(c), nothing more.

Third, Loews asserts that applying our decision 

prospectively only would not negatively impact the 

administration of justice or frustrate the purpose our decision. 

But “if we were to restrict our holding to prospective application, 

we would, in effect, negate” the full extent of the remedy “that 

the Legislature has determined to be appropriate in this 

context,” thereby “exceed[ing] our appropriate judicial role.” 

(Alvarado, supra, 4 Cal.5th at p. 573.) Loews also argues that 

our interpretation of section 226.7(c) violates due process 

because ordinary people could not have foreseen our 

interpretation, but we have rejected similar arguments before. 

(See Alvarado, at p. 572 [“This argument, too, is meritless.”].) 

Because our reading of “regular rate of compensation” in section 

226.7(c) is “[o]ne very reasonable way to construe” the phrase, 

Loews “is simply wrong when it argues that ordinary people 

could not have predicted plaintiff's interpretation, and that it 

would violate defendant’s due process rights to adopt that 

interpretation.” (Alvarado, at p. 572.)

For these reasons, we reject Loews’s request that we apply 

our decision only prospectively.
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC

Opinion of the Court by Liu, J.

29

CONCLUSION

We reverse the judgment of the Court of Appeal and 

remand for further proceedings consistent with this opinion.

LIU, J.

We Concur:

CANTIL-SAKAUYE, C. J.

CORRIGAN, J.

CUÉLLAR, J.

KRUGER, J.

GROBAN, J.

JENKINS, J.
See next page for addresses and telephone numbers for counsel who 

argued in Supreme Court.

Name of Opinion Ferra v. Loews Hollywood Hotel, LLC 

__________________________________________________________ 

Procedural Posture (see XX below)

Original Appeal

Original Proceeding

Review Granted (published) XX 40 Cal.App.5th 1239

Review Granted (unpublished) 

Rehearing Granted

__________________________________________________________ 

Opinion No. S259172

Date Filed: July 15, 2021

__________________________________________________________ 

Court: Superior

County: Los Angeles

Judge: Kenneth R. Freeman

__________________________________________________________ 

Counsel:

Moss Bollinger, Dennis F. Moss, Ari E. Moss; Law Offices of Sahag 

Majarian II and Sahag Majarian II for Plaintiffs and Appellants.

Altshuler Berzon, Michael Rubin, Eileen B. Goldsmith; Haffner Law, 

Joshua H. Haffner, Graham G. Lambert; Stevens and Paul D. Stevens 

for California Employment Lawyers Association and Jacqueline F. 

Ibarra as Amici Curiae on behalf of Plaintiffs and Appellants.

Capstone Law, Melissa Grant, Ryan H. Wu and John E. Stobart for 

Bet Tzedek as Amicus Curiae on behalf of Plaintiffs and Appellants.

Ballard Rosenberg Golper & Savitt, Richard S. Rosenberg, John J.

Manier and David Fishman for Defendant and Respondent.

Seyfarth Shaw, Jeffrey A. Berman, Brian T. Ashe and Kiran A. Seldon

for California Employment Law Counsel, Employers Group and
Chamber of Commerce of the United States as Amici Curiae on behalf

of Defendant and Respondent.

Blank Rome, Brock Seraphin; Lathrop GPM and Laura Reathaford for

Association of Southern California Defense Counsel as Amicus Curiae

on behalf of Defendant and Respondent.
Counsel who argued in Supreme Court (not intended for 

publication with opinion):

Dennis F. Moss

Moss Bollinger LLP

15300 Ventura Boulevard, Suite 207

Sherman Oaks, CA 91403

(310) 773-0323

Eileen B. Goldsmith

Altshuler Berzon LLP

177 Post Street, Suite 300

San Francisco, CA 94108

(415) 421-7151

David J. Fishman

Ballard Rosenberg Golper & Savitt, LLP

15760 Ventura Boulevard, 18th Floor

Encino, CA 91436

(818) 508-3707