Title: Ferra v. Loews Hollywood Hotel, LLC
Citation: N/A
Docket Number: S259172
State: California
Issuer: California Supreme Court
Date: July 15, 2021

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. 
 
9 
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. 
 
10 
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].) 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC 
Opinion of the Court by Liu, J. 
 
11 
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. 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC 
Opinion of the Court by Liu, J. 
 
13 
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 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC 
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 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC 
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.) 
FERRA v. LOEWS HOLLYWOOD HOTEL, LLC 
Opinion of the Court by Liu, J. 
 
16 
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. Rae-
Venter 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