Automatic Meal Period Deductions: “Proceed with Caution”

The “meal period,” although not required by Texas law, is another one of those simple workplace concepts in theory but, in practice, has generated legions of lawsuits, agency decisions, and perhaps a plaintiffs’ firm or two.  The recurring issue is whether a (non-exempt) worker should be paid for the meal period or not.  As a general rule, “bona fide” meal periods are not compensable under the FLSA if two conditions are met:  (i) the meal period is at least 30 minutes or more, absent special conditions, and the employee is relieved from duty, and (ii) the meal period is used predominantly or primarily for the benefit of the employee.  If these conditions are met, the question then becomes “how much time should the employer deduct?”  Many employers have traditionally tackled this issue by requiring employees to “clock in” and “clock out” at the beginning and end of the designated meal period.  All sounds fine, but what if the employee forgets or unforeseen circumstances prevent the employee from “punching” the clock, then what?

To avoid this hassle, a number of payroll software packages have been developed which offer employers the option of automatically deducting for the designated meal period.  Sounds tempting, right, but is it a good idea?  The Department of Labor issued an opinion letter on May 14, 2007, opining that such automated systems did not violate the Fair Labor Standards Act (“FLSA”) recordkeeping requirements, “so long as the employer accurately records actual hours worked, including any work performed during the lunch period.”  In other words, the automatic deduction may be legal, but the practice may still violate the FLSA and lead to numerous unintended legal and financial consequences.  For example, if a non-exempt employee works all or part of her 30-minute lunch period, the employee will be underpaid if she is charged with the full 30-minute deduction.  On the other hand, if the same employee takes 1 hour for lunch, then she may be paid for an half hour of time not actually worked if only 30 minutes is deducted.  The overtime calculation may also be implicated in both cases.

This topic has been fertile ground for a number of recent class action lawsuits in more than 7 states, particularly in the health care industry where this has traditionally been much more of a common practice.  Most recently on September 9, 2010 in Chastity L. King v. Heritage Enterprises, Inc., a federal district court in Illinois denied a nursing home’s motion to dismiss a class action lawsuit filed by a class of healthcare employees spanning 38 different skilled nursing facilities in Illinois who claimed they were subject to an automatic 30-minute meal break deduction but were regularly required to work during their meal period.

The Bottom Line for Employers:

Employers who are considering adopting an “automatic” meal period deduction should carefully weigh the risks and benefits, which may vary on the realities of the workplace and the number of non-exempt employees affected.  If an “automatic” meal period deduction is adopted, it is very important that the employer adopt written policies and procedures (i) explaining the automatic deduction (including that the employee should not be working during the meal period), and (ii) how to make adjustments to the number of hours worked if the employee works during the meal period or uses more or less than the amount of time to be automatically deducted.  Note that if less than the allotted time is actually used, then it is possible in some factual scenarios that the entire meal period may become compensable, but, at a minimum, the employee must be compensated for all time actually worked.  Both supervisors and employees should be trained on these policies and procedures, which should also be in writing and made easily accessible in the workplace.