FLSA FAQ: Automatic Deductions for Meal Periods and Breaks

As we discussed earlier this week, under the FLSA employers do not have to pay employees for “bona fide meal periods,” because the regulations do not consider them to be work time. For a break to qualify as a bona fide meal period, “[t]he employee must be completely relieved from duty for purposes of eating regular meals,” and the break must generally be at least 30 minutes or longer. The rules even allow periods shorter than 30 minutes to qualify as unpaid “under special circumstances.” For example, in a 2004 opinion letter, the Department of Labor found that an employer could permissibly reduce its 30-minute unpaid lunch break to 20 minutes and provide an extra 10 to 15-minute paid break, given that the arrangement was the product of collective bargaining between the employer and a union.  Importantly for our Fifth Circuit case earlier this week, employees could reach the break room in under two minutes.

Posts about meal breaks often lead to questions like this one:

Q: Our electronic timekeeping system automatically deducts 30 minutes for a meal period if the employee does not enter a specific start time and end time.  Does it matter that we do not require employees to badge in and out at the actual start and end times of their lunch breaks?

For starters, having employees record the exact start and end times for their unpaid lunch or other meal period and deducting this exact time from the paid workday is the least risky, least ambiguous, most transparent approach to recording time.  We’ll discuss this next week, but rounding usually creates more trouble than it is worth.

For example, in Quickley v. University of Maryland Medical System Corporation, a hospital automatically deducted 30 minutes from employees’ workday for scheduled meal breaks. Unlike in the scenario above, though, the employees who sued the hospital alleged that they had no way (either through their electronic time clock or later through manual changes) to adjust this deduction if they worked during their meal break or shortened it. In denying the hospital’s motion to dismiss, the court explained that even employers with clearly articulated automatic deduction policies must “make every effort to facilitate reporting opportunities” for actual start and end times when shifting the burden to an employee to report deviations in standard meal breaks.  The court explained that employers “cannot simply abdicate responsibility for adequate compensation by shifting the burden to employees.” To minimize wage and hour liability, an employer must “exercise its control and see that the work is not performed if it does not want it to be performed.”

That said, certain industries and employers historically have rounded meal periods to 30 minutes or even automatically deducted meal periods without regard to the break’s actual start or end time.  By automatic deductions, I mean that the employer deducts the same, set period each shift for an employee’s meal break.  For those of you who need or want to implement automatic deductions, the DOL does allow automatic deductions under the FLSA regulations.

Upshot for Employers

Again, eliminate automatic deductions for meal periods if you can.  Just because you have always done things this way does not mean that a better way is not available.  If you decide to implement mandatory deductions, remember that the FLSA requires employers to compensate employees for all work “suffered or permitted,” even work an employer does not know about or even specifically authorizes in advance. That makes meal times potentially troublesome, such as when employees eat at their workstations, get called back to work, or use their smartphones during their lunch break.

First, as the court counseled in Quickley, employers must implement a policy, clearly communicate it, and regularly train new hires, employees, and supervisors on how to use it. Importantly, the policy and the actual timekeeping system must provide ways (preferably multiple) for employees and/or their managers to override or adjust an automatic deduction if they work during some or all of their meal breaks.  Of course, given the risk of “off the clock” work or, as in Naylor, breaks that end up too short to be noncompensable, make sure you talk to experienced wage and hour counsel first before implementing (or continuing) an automatic deduction policy!

Are you an employer (large or small) that has a general wage and hour question that you would like us to answer? If so, contact us! Leave a comment, send an e-mail, or Tweet @HassDoug.  We’ll get an answer to you about your situation if we can, and we even may use your question as part of a hypothetical question in a future blog post here on The Day Shift!