An unpaid meal break can become a very expensive lunch for an employer, but there are ways to comply with the Fair Labor Standards Act (FLSA) to try and minimize the risk.
Identifying the Potential Problem
The problem that results from unpaid meal breaks typically arises like this:
- Nonexempt employee clocks out for lunch, or has an automatic meal break deduction from the timecard
- Employee gets busy and performs work during the unpaid meal break period.
- Employee does not report the time worked to the employer and is not paid for the time worked.
In this example, the employee has worked “off the clock,” and wage-and-hour laws, principally the federal FLSA, have likely been violated if the amount of the “off the clock” work, when combined with on-the-clock work, means the employee has worked more than 40 hours in a workweek and was not paid overtime. The employee may also have a claim for unpaid minimum wage if the employee’s regular rate of pay dropped below minimum wage.
When this happens with one employee, the problem may not be that costly. But when dozens or hundreds of non-exempt employees join together in an FLSA collective action concerning unpaid meal breaks, the problem gets real expensive, real fast. You could be looking at payment of unpaid overtime and minimum wage, liquidated damages (doubling of the unpaid backpay), and what can be the real cherry on top – attorneys’ fees for the lawyers who are suing you.
In addition to lawsuits from private parties, the government can come after you too. The United States Department of Labor enforces the FLSA and announces settlements frequently for off-the-clock work caused by unpaid meal breaks. For example, earlier this month, the DOL announced that it had recovered more than $50,000 on behalf of 56 workers in a Southern California supermarket for off-the-clock work performed in part during unpaid meal breaks.
What is an employer to do?
So what are some ways that employers can help minimize the risk of wage-and-hour claims for unpaid meal breaks?
- Employers should have a policy that clearly informs non-exempt employees (i.e., those eligible for overtime) that work during an unpaid meal break is prohibited.
- Employers should reinforce with employees and supervisors that if an employee performs work during an unpaid meal break, it must be recorded so that the company can pay the employee for it.
- Employers should create a process for non-exempt employees to report time worked during overtime hours. For example, for employers with automatic meal break deductions where 30 minutes is automatically taken off their time at the end of the day (a permissible practice standing alone), create a form that is widely distributed or available on the company intranet that employees are required to fill out to report when employees perform work during the unpaid meal break.
Bottom line: You cannot pay for time that you do not know about, although you can be held responsible for not paying for that time. You should create a system that works for you that places the burden on employees to report their time worked.
Otherwise, an employee’s “unpaid” meal break may turn into a very costly meal for the employer.