July 12, 2011
A Matter of Time: Wage-Hour News You Can Use
How certain are you that your company is complying with meal and rest break laws? If employees in your company ever work during their breaks, you may have a problem.
For example, consider the case of Patrick Mendez, a worker for an electrical company. Mr. Mendez’s company had a policy that required employees to take at least 30 minutes for a lunch break each day. When calculating weekly pay, the company assumed that each employee did in fact take a 30-minute unpaid daily lunch break. But Mr. Mendez claimed that his lunch was often interrupted when he was required to assist with a delivery or answer a phone call. His employer countered that this happened only occasionally, and if it did, he could take a break later or leave work early to make up for missing part of his lunch break. Is Mr. Mendez’s employer in trouble for not compensating Mr. Mendez for his lunch break, despite the fact that he might not always be completely free from work obligations? Possibly yes, according to a New York court, which denied summary judgment for the employer in this matter. In this case, the answer will depend on how often lunch periods are interrupted, how long the interruptions are, and whether the meal period is used predominantly to perform activities for the employer’s benefit or the employee’s benefit. See Mendez v. The Radec Corporation, 232 FRD 78 (WDNY 2005).
Complying with laws governing meal and rest breaks presents vexing wage and hour problems for employers. Employers need to understand whether meal and rest breaks are required under applicable law, whether those breaks must be paid, how to keep track of break time, and the consequences of adopting a policy that provides for meal and rest breaks. Employers should also understand how to handle the situation where an employee has to skip a lunch or rest period, or is interrupted in the middle of a rest break, such that work is performed during the break.
Employers can face liability under federal and state law for meal and rest period violations, as well as common law claims for violation of an employer’s own policies. Even in a state that does not require employees to be given meal or rest breaks, failing to pay an employee for work performed during an employer-provided unpaid break can result in liability under state and federal wage laws. A Pennsylvania court recently upheld a $187 million verdict against Wal-Mart for failing to provide workers with meal and rest breaks in violation of Wal-Mart’s own policies. Wal-Mart had a policy that guaranteed hourly employees one paid 15-minute break for employees working more than three hours, and two paid 15-minute breaks for employees working more than six hours. Though Wal-Mart’s own employee handbook and break policy referred to the paid breaks as a “benefit” of employment, in practice employees were frequently interrupted during their breaks or prevented from taking them altogether. Because the court found that Wal-Mart had willfully prevented employees from receiving their breaks and failed to pay them, it also awarded $62 million in liquidated damages. The case serves as a reminder that employers need to be mindful not only of the cost of wages and overtime associated with the failure to provide meal and rest periods, but the other potential damages and penalties that may result as well.
Although no federal law or regulation requires that an employer offer its employees a meal or rest period, several state laws do. In California, for example, state law requires that employers provide employees with both meal and rest periods. Nonetheless, a difficult issue many California employers face is whether and how to ensure that employees actually take breaks. The California Supreme Court is currently considering whether an employer merely has to make a meal break available to its employees, or whether the employer has to actually ensure that the employees take the meal break. The widely anticipated case has been pending before the state supreme court for the past three years, while employers anxiously await clarification of this issue. New York state law also contains meal period requirements, which can be waived only under limited circumstances.
All of these questions point to a need for employers to be aware of applicable state and federal laws and regulations. Employers should:
Employers should consider the following tips for reducing liability for wage violations:
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.