Employers Must Pay Employees for Break Times of 20 Minutes or Less

Whether or not an employer must pay an employee who is on a break during a work day often creates much confusion. Employers subject to jurisdiction under the Fair Labor Standards Act who do not follow the appropriate regulations subject themselves to potential class action liability for unpaid time, statutory penalties and other damages. In addition, corporate officers with operational control of closely held businesses can be found personally liable to employees for unpaid wages and other penalties.

In Perez v. American Future Systems, Inc. (E. D. Pa. December 16, 2015) (Restrepo, J.), the court addressed an employer policy that required employees who work on computers who take breaks of 20 minutes or less to not be paid for the break time and found that the employer’s practice violates the Fair Labor Standards Act (FLSA). In Perez, the Department of Labor (DOL) filed a lawsuit on behalf of the all company sales representative employees against American Future Systems, Inc., d/b/a/ Progressive Business Solutions, and its principal owner for violations of the minimum wage and record keeping provisions of the FLSA. The alleged minimum wage violations resulted from the employer’s policy that employees must “log-off” the computer system, and thus not be paid, during any break taken throughout the workday, including breaks of 20 minutes or less. The alleged record keeping violations concerned the employer’s failure to maintain and produce employee time records from certain sales branch locations for various time periods at issue in the litigation. The District Court granted the DOL’s summary judgment motion with respect to FLSA minimum wage liability, FLSA record keeping liability and the principal owner’s role as an “employer” under the FLSA because he owns 98% of the company; is responsible for policies, operations, and results; and makes or approves high level recruitment decisions, large capital expenditures and/or significant contracts, and major changes of policy.

In Perez, the employer’s primary business is creating business information publications and selling those publications to various entities using sales representatives whose duties consist primarily of selling Progressive’s publications to business executives via outbound telephone calls in ten call center operations. When employees arrive at work during a branch’s hours of operation, they log-on to the branch’s computer system. The employees remain logged-on to the computer system while making outbound sales calls, documenting the results of those calls, receiving training, and other approved tasks and are only paid for the time that they are logged into the timekeeping system. The employer implemented a written compensation policy stating, among other things, that: “Representatives may take personal breaks at any time for any reason. Personal break time is NOT paid because it is a disadvantage to the representative to do so.” If a sales representative is not on an active sales call, recording the results of a call, engaged in training or administrative activities, or engaged in other activities that the employer considers to be work-related, the sales representative is required to log-off on the employer’s computer system.

In Perez, the court found that the employer violated 29 C.F.R. § 785.18 which provides: “Rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. They promote the efficiency of the employee and are customarily paid for as working time. They must be counted as hours worked.”

While not addressed in Perez, true lunch or dinner breaks in excess of 20 minutes are treated differently and are not compensable time. Under 29 C.F.R. §785.19: “Bona fide meal periods” are not work time. Bona fide meal periods do not include coffee breaks or time for snacks which are treated as compensable rest periods. As long as an employee is completely relieved from duty for the purposes of eating regular meals for a period of ordinarily 30 minutes or more and is not required to perform any duties, whether active or inactive, the meal period is general found to be non-compensable. A shorter period may be long enough under special conditions. Being on a meal break is strictly interpreted. If an employee is not truly completely relieved of all work duties while eating, the employee must be paid. For instance, if an employee is required to eat at his desk and perform any type of work, or a factory worker is required to be at his machine working while eating, the employee must be paid.

Abramson Employment Law represents employees who have FLSA claims for unpaid wages and overtime pay. For more information see http://www.job-discrimination.com/lawyer-attorney-1126494.html

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Filed under Fair Labor Standards Act, Pennsylvania Wage Payment and Collection Law, Unpaid Overtime FLSA, Unpaid Wages

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