As longtime readers of this blog know, there are a number of common myths regarding wage and hour issues. One of the most prevalent of these myths concerns rest breaks. Although many people think that workers are entitled by law to mandatory rest breaks, this is generally not true under federal or New Jersey law. What is true, however, is that the Fair Labor Standards Act (“FLSA”) requires employers who offer rest breaks of twenty (20) minutes or less to count such time as “hours worked” and pay non-exempt employees for that time. Failing to properly pay non-exempt employees for these breaks could result in costly litigation and liability.
A Pennsylvania employer recently learned this lesson the hard way. American Future Systems publishes and distributes business publications, which are sold through the company’s non-exempt sales representatives. Although the company previously gave these employees two paid fifteen-minute breaks per day, this policy ended in 2009 when the company implemented a “flex time” system. This system eliminated paid breaks but allowed employees to log off their computers at any time, for any reason, or for any length of time as frequently as they wished. Employees, however, were only paid for the time they were logged onto their computers and times when they were logged off their computers for less than ninety (90) seconds.
In a precedential decision issued earlier this month, the United States Court of Appeals for the Third Circuit found that this “flex time” system violated the FLSA. (The Third Circuit is the federal court of appeals with jurisdiction over the district courts in New Jersey, Pennsylvania, Delaware and the U.S. Virgin Islands.) The court noted that the policy “forces employees to choose between such basic necessities as going to the bathroom or getting paid unless the employee can sprint from computer to bathroom, relieve him or herself while there, and then sprint back to his or her computer in less than 90 seconds,” a result that is “absolutely contrary to the FLSA.” As a result of these violations, the company was required to pay the employees unpaid wages and an equivalent amount of statutory liquidated damages.
This decision emphasizes the importance of ensuring that policies and practices regarding timekeeping and compensation are correct. For questions about wage and hour issues, employee policies or handbooks, or any other labor and employment topic, please do not hesitate to contact a member of our Labor and Employment Department.