Wage & Hour - Development & Highlights : New Jersey Labor and Employment Lawyer & Attorney : Fox Rothschild LLP Law Firm : Serving Essex County, Sussex County, Roseland, New Jersey

I recently gave a presentation at a national wage-hour conference in Miami on the perils of automatic deductions for lunch and the possibility that such a procedure could lead to class actions, with the allegation that the employee(s) worked through lunch but nevertheless suffered an automatic deductions.  I have also found that many hospitals and health care employers are utilizing this procedure.  Well, it’s happening.

In a federal lawsuit, a judge has granted class certification to a class of employees who allege that meal breaks were deducted from their pay, although they did not eat lunch or were otherwise relieved from duty.  The case is entitled Hamelin v. Faxton-St. Lukes Healthcare and was filed in the federal court in the Northern District of New York.

The plaintiffs claim that a half-hour was deducted from their working time every day for lunch, but patient care demands often necessitated that they miss the lunch break and instead performed productive work.  The employees at issue are Nurses and Certified Nursing Assistants, i.e. those employees with direct patient care responsibilities.

In an interesting procedural twist, the defendant contended that the court should not exercise supplemental jurisdiction over the claims of the plaintiffs under New York law, with the theory being that when plaintiffs must opt in for one statute (FLSA) and opt out of the other (the state claims), confusion will result.  Concomitant to the “confusion” argument, and, to my view, more crucial is that argument that allowing the state claims to proceed deviated from the congressional intent to allow FLSA plaintiffs to opt-in; there was a danger that the state claims and claimants could “overwhelm” the federal claims, according to the defendants.  The judge disagreed, finding precedential support from the Second, Seventh, Ninth and District of Columbia circuits.

I think allowing the claims to proceed together is wrong and represents a contradiction in how these cases fundamentally proceed.  On the merits, it is essential for employers utilizing automatic deduction policies to implement some fail-safe mechanism that allows employees who claim they have worked through lunch to document that, with follow-up by management and, if appropriate, payment to the employee.

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In a recent posting in the Wage Hour Defense Blog, Kara Maciel brought attention to the new, intensified focus by the federal Department of Labor in auditing and inspecting health care facilities.  I represent a number of such facilities and have also noticed an uptick in such investigations, especially as concerns lunch breaks and rounding.  That post is at www.wagehourblog.com/2010/08/articles/wage-and-hour-policies/hospitals and nursing homes

As I have written about before, many health care employers (as well as others) have smart time clocks that automatically deduct thirty minutes every day for lunch.  As Kara notes, if the employee does any work during that otherwise automatically deducted period, the lunch period(s) may then be claimed to be working time.  Since patient care is a top priority and patients may and do need assistance and care at all times of the day, it is possible that employees may be interrupted during their lunch or claim that they are, even if the interruption is only for a moment, e.g. answering a question.

The difficulty of defending these claims is evident, as Kara notes.  Unless employers have built in fail-safe mechanisms to allow for the reporting and concomitant investigation of interrupted lunch claims, it will be virtually impossible to try to prove or disprove whether a certain employee actually took their full thirty minute lunch break on a day or days in the last two years.  I have advised creating a form for this contingency, placing it in boxes or containers by nursing stations or other central points and giving employees either in-service training on the procedure or otherwise documenting that employees are aware of the reporting procedure.  In that manner, employees can be properly compensated and the employer can adequately defend itself against years-later claims of unpaid working time.

The key is to be proactive.  Internal audits of compensation practices, especially those relating to exemption classification issues and working time issues, are essential. If a policy is problematic (or out rightly illegal) it should be changed immediately, so that any applicable statutes of limitations can start being eroded away.

“Eternal vigilance is the price of liberty,” said Thomas Jefferson.  It is also the price to pay for not being caught unawares in a FLSA collective and/or state law class action on issues that with careful planning and foresight could have been completely avoided.

 

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Under the Fair Labor Standards Act, there is no law requiring employees receive a lunch period or break times. However, when the employer gives time for lunch, the employees must receive at least thirty minutes and the time must be uninterrupted. Put differently, the employees must be completely relieved from duty. When employees are not so relieved, they must then be compensated for that time, i.e. the half-hour, which all becomes “converted” into working time.

This is what the DOL found happened in this investigation, which ultimately included 4000 nurses. Some of the nurses answered phones while on lunch and others performed “some” duties. The result, however, is the same---all of the time is converted.

The hospitals also had an automatic deduction policy, by which one-half hour was automatically deducted from the nurses’ time for that day, on the assumption that the lunch was taken. Although the hospitals had a policy about not working during lunch (i.e. not carrying the hospital-provided phones during meal breaks) and also had a policy that allowed nurses to cancel the automatic deduction if they performed actual, productive work. The hospitals claimed that the nurses did not follow the policy. The result was a supervised settlement providing for 1.7 million dollars to be paid to the affected employees.

I have clients who have these automatic deduction systems for lunch time. As this makes clear, the automatic is not so automatic. There must still be supervisory oversight and intervention in issues where employees may have worked through lunch, to ensure that proper payment is made. The employer must have a system where employees can report that they worked through lunch and the employees, in my view, must be given training on the system, so all productive time is paid for and the DOL does not come knocking on the door.

In sum, a policy, a piece of paper, will not provide a defense to claims of uncompensated working time. More is required of the employer.
 

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