Under the Fair Labor Standards Act (FLSA) employers must pay non-exempt employees an amount equal to at least the minimum wage for all hours worked and one and one-half times the employee’s regular rate for overtime (generally in excess of 40 hours in a week). To comply with these requirements an employer must keep accurate records of hours worked.
Short breaks of 5-20 minutes promote employee efficiency and are considered working time under the federal wage and hour regulations. 29 C.F.R. 785.18. On the other hand, bona fide meal periods during which an employee is relieved from duty are not working time. 29 C.F.R. 785.19.
One of the most common wage violations occurs when an employer requires or permits employees to work during meal periods without pay. An employee is entitled to pay for anything other than a minimal interruption, and an employee who cannot enjoy the benefit of an adequate, comfortable meal is entitled to pay for the entire period.
Many employers use an automatic system to deduct a meal period during each employee’s shifts. For example, an employee may be clocked in from 8:00 a.m. to 4:30 p.m. but, after a 30 minute meal deduction, only credited with 8 hours worked. This practice often occurs even when an employee does not have a designated meal period, but must eat when time is available.
Courts have held that an automatic meal deduction is not necessarily unlawful, but there are rules which apply. Where an employer uses reasonable policies and practices to allow employees to report and get paid for missed or interrupted meals, an employee whose failure to report prevents the employer from learning of unpaid overtime may not recover. But the employer must pay if it had actual or constructive knowledge of unpaid work. Constructive knowledge means that a reasonably diligent employer should have known working time was not being paid. In other words, the employer cannot turn a blind eye to unpaid work.
In White v. Baptist Memorial Health Care Corp., 699 F.3d 869 (6th Cir. 2012), a nurse’s claims for work during unpaid meal periods were dismissed where there was a reasonable policy in place to report and get paid for missed meals. The employee occasionally told supervisors and human resources that she was not getting a meal break, but never told them she was not being paid for missed meal breaks. Critically, she knew the procedures to report working lunches and correct payroll errors and each time she followed the procedures, she was paid.
But even a valid policy is no defense where an employer’s actual practices promote unpaid work. Employers who prevent employees from reporting time worked or who should have discovered unpaid time using reasonable diligence can be liable. Craig v. Bridges Brothers Trucking, LLC, 823 F.3d 382 (6th Cir. 2016). Further, an employer that allows overtime work to occur cannot refuse to pay on the basis that the work was not authorized. Chao v. Gotham Registry, Inc., 514 F.3d 280 (2nd Cir. 2008). Instead, an employer that wants to prevent overtime is permitted to discipline an employee for unauthorized work. Unfortunately, some employers are all too happy to reap the benefits of unauthorized work without paying for it.
Like White, many disputes over automatic meal deductions arise in the healthcare industry, including hospitals and nursing homes, where employer desire to control payroll costs may clash with employee responsibility for patient care. E.g., Myers v. Marietta Memorial Hospital, 201 F. Supp. 3d 884 (S.D. Ohio 2016) (conditional certification of collective action where employees stated they were discouraged from cancelling meal deductions and supervisors were aware employees were constantly attending patients and unable to take breaks); Ribby v. Liberty Health Care Corp., No. 3:13 CV 613, 2013 WL 3187260 (N.D. Ohio June 20, 2013) (reasonable procedures not a defense where employer should have known employee uncompensated for some hours); Quickley v. University of Maryland Medical System Corp., No. CCG-12-321, 2012 WL 4069757 (D. Md. Sept. 14, 2013) (employer must clearly communicate policy and make every effort to facilitate reporting). But unlawful meal practices are certainly not limited to healthcare jobs, and frequently occur in restaurant, retail, service and other industries.
While each meal deduction may involve a small loss of pay, the damages can add up. For example, an employee shorted 2.5 hours per week and earning $15 per hour would be due $2,925 over 52 full work weeks. The FLSA permits recovery of “liquidated” damages in an amount equal to the unpaid wages (in other words, double damages), unless the employer acted in good faith. Employees can sue for wages lost within 2 years prior to suit, or 3 years in the case of willful violations. Also, suit may be brought on behalf of a group of similarly situated employees in a collective or class action.
Whether a meal period deduction is lawful depends upon the facts and circumstances. An experienced wage and hour lawyer can offer advice and guidance.
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