Perils of Having Employees Work Through Lunch

It’s tempting to have employees work through lunch—there’s always more to be done, business doesn’t necessarily come to a stop at lunchtime, and anyway, management often works through lunch without additional compensation. So, why not other staff?

The “why not” is that management are generally exempt from the overtime pay regulations and are receiving a salary without regard to how many hours they work a week. Other staff (the receptionist, data entry clerks, administrative assistants, secretaries, billing clerks, customer service reps., etc., etc.) are “non-exempt” and need to (a) be paid for every hour they work and (b) have all hours worked counted towards potential overtime pay. That’s what seven of Philadelphia’s largest health systems are discovering: they were recently sued by employees who were not paid for working through lunch. If history is any guide, the health systems can expect to pay for this failure—the law firm bringing the suit won a $9 million settlement in a similar case against the University of Rochester in 2006.

Even though the federal Fair Labor Standards Act requires that non-exempt employees be paid for all hours worked, it does not actually clarify what is working time and what is not. Regulations have been passed by the Department of Labor to help clarify this, such as the “meal break” and “rest break” rules. Essentially, if a meal break is 30 minutes or more and the employee is relieved from performing all duties (meaning he or she is not eating at their desk with the responsibility to answer the phone if it rings), that meal break time is unpaid. However, “rest periods of short duration, running from 5 minutes to about 20 minutes . . . are customarily paid for as working time [and] must be counted as hours worked.”

Even if the break is greater than 30 minutes, however, if a non-exempt employee is expected to do something for the company’s benefit during this “break,” including catching up on paperwork or answering the phone, the entire period counts as paid time under federal law. Employees need to be completely relieved form any duties in order for a meal period to be unpaid.

Keep in mind, however, that In addition to federal law, many states have their own break laws, as Wal-Mart found out. The company agreed to pay $3 million to settle claims alleging that the retail giant had violated the Massachusetts Break Law by forcing staff to work through lunch. Not only do some of these state laws require payment for working through lunch or other breaks, they also require that the breaks be given and often impose penalties for that omission on top of any wages (including overtime wages) owed to the employees who worked through lunch.

Companies that require nonexempt staff to work during their supposedly unpaid break time could ultimately end up paying far more than they saved by having employees do extra work for “free.”

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