FLSA

Hungry for Pay —  The FLSA and Lunch Breaks

Robert C. Lockwood
Facebooktwittergoogle_plusredditpinterestlinkedinmail

 

Yellow sticky note on a laptop keyboard with 'Gone for Lunch' on it.
Yellow sticky note on a laptop keyboard with ‘Gone for Lunch’ on it.

Occasionally, a client will ask if they are required to pay employees for lunch breaks.  The answer is:  “It depends.”  Employers are not required to provide employees with any kind of breaks, including “lunch breaks,” “rest breaks” or “smoke breaks.” Nevertheless, if an employer provides breaks, the Fair Labor Standards Act generally requires that employees receive pay for “short breaks” of 20 minutes or less.  The FLSA does not require pay for “bona fide lunch breaks.”

So, what is a “bona fide lunch break”?  In the Eleventh Circuit (which reviews cases from Alabama), a bona fide lunch break is one where employees are completely relieved from work for the purpose of eating a regularly scheduled meal.  For some employers, this can be a difficult standard.

A 2014 case from Judge Sharon Blackburn demonstrates the burdens placed on employers.  See Ledbetter v. Mercedes Benz U.S. International, Inc., No. 7:10-CV-0467-SLB, 2014 WL 1247988 (N.D. Ala. Mar. 24, 2014).  In that case, workers at the Mercedes Benz plant were scheduled to have an uninterrupted 45-minute lunch break.  Nevertheless, the evidence showed that they were “frequently” recalled during their meal period to perform their customary duties.  Judge Blackburn refused to dismiss the case against Mercedes Benz and found that employees “were not completely relieved of their work duties and their meal breaks, even the rare, uninterrupted meal break, are compensable.”

In short, if an employer “frequently” makes an employee work during lunch breaks, then it is possible that the employee is entitled to pay for all lunch breaks — even uninterrupted lunch breaks.

What Would Saban Do? Preparation for DOL’s New Overtime Rules

Robert C. Lockwood
Facebooktwittergoogle_plusredditpinterestlinkedinmail

businessman-311337_640 (1)We all procrastinate.  Give us a deadline and we’ll wait to the last minute to complete the project.  At the University of Alabama, Nick Saban has rejected that tendency and turned The Process into forward thinking preparation.  While college football players aren’t entitled to overtime compensation, employers can adopt some principles of The Process and start preparing for the Department of Labor’s new overtime rules.

The release-date for the new overtime rules is unclear.  The Department of Labor’s Fall 2015 Unified Agenda stated that the anticipated release date would be in July 2016.  However, in November of 2015, Solicitor of Labor M. Patricia Smith said the rules wouldn’t be issued until “late 2016”.

If you start preparing now, the uncertainly of the release date won’t have as much impact on your business.  We know that the threshold salary to exempt employees from overtime is going to increase.  Right now, an employee making a salary of $23,660 can potentially be exempted from overtime requirements.  In other words, if you pay an employee a minimum salary more than $23,660 and they perform certain executive, administrative or professional duties, you don’t have to pay them overtime.

That threshold amount is going to increase.  The Department of Labor’s draft rule proposed to increase the salary requirement to $50,440 — which is the 40th percentile for full-time salaried workers in America.  Legal pundits believe there is some potential for compromise on the amount, but everybody agrees there will be an increase.  The 35th Percentile is $44,304 per year and the 30th Percentile is $40,196 per year.

Potentially, your business has employees who are making more than the current threshold of $23,440, but less than the potential new threshold — and you are not paying them overtime.  But, under the new DOL regulations, you could be required to pay them overtime.  Start identifying those employees now.  Also, you need to be thinking about tough internal policy decisions.  Do you increase the salary of those employees to “bump” them over the new threshold?  Do you actually lower their salary to account for the overtime that they will now accrue?   Do you take the “hit” to your profitability and keep their salary the same — plus pay overtime.

The new regulations will unquestionably require businesses to make difficult decisions.  But, following The Process, preparing early, and clearly communicating changes to employees can make the transition less difficult.