Court Opinion

ID: 4703877
Source: CourtListenerOpinion
Date Created: 2021-07-15 17:06:22.396241+00
Date Added: 2024-06-11T08:04:38.529412
License: Public Domain

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.
       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.

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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

                                  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

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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

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.).)

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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

      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

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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

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

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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

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

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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

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

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           FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

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)).

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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

      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

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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

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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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
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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.

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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
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                                  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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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
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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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            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
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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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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.)

                                  15
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

       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

                                  16
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

[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

                                  17
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

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

                                 18
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

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,

                                  19
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

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

                                  20
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

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

                                 21
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

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

                                 22
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

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

                                 23
           FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

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.”].)

                                 24
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

      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

                                 25
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

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

                                  26
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                   Opinion of the Court by Liu, J.

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

                                 27
            FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                    Opinion of the Court by Liu, J.

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.

                                  28
           FERRA v. LOEWS HOLLYWOOD HOTEL, LLC
                  Opinion of the Court by Liu, J.

                       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.

                                29
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