Today, the California Supreme Court unanimously decided Murphy v. Kenneth Cole Productions, Inc. S140308, and held that the "one additional hour of pay" in Labor Code section 226.7 constitutes a wage and not a penalty. This decision is significant because a wage is subject to a three year statute of limitations (Code of Civ. Proc. Section 338), while a penalty is only subject to a one year statute of limitations (Code Civ Proc. Section 340). Moreover, the ramifications of this decision may have broader wage hour implications. Sheppard Mullin’s Labor and Employment attorneys are evaluating the impact of this new decision on employers and will provide a more detailed analysis in the next issue of the California Labor and Employment ALERT.