Surprise! Automatically Clocking Your Employees Out Is Risky Business.
Very few employers break employment laws on purpose. That would be crazy.
Still, here at CEDR we’ve found that a majority of the business owners we work with have some form of wage and hour violation on their books before they come on board as CEDR members. And, unfortunately for those who aren’t yet working with qualified HR professionals, lack of familiarity with employment laws isn’t much of a defense when the government gets involved.
Though it’s never fun to let an employer know that they are at risk of facing a wage and hour lawsuit, protecting our members is what we do. And, like it or not, sometimes that means we’ve got to be the bearer of bad news.
If this applies to you, we apologize in advance for bringing you down. But one common practice that frequently seems to set employers up for the bad news of Fair Labor Standards Act (FLSA) violations involves automatically clocking employees out for breaks. And this is especially true when it comes to employers in the healthcare industry.
The Law Applied to Work Breaks
Though the FLSA does not set any requirement for providing meal or rest breaks, 21 states do have their own laws on the books mandating that breaks be provided to employees at specific intervals. Nine of those states set requirements for both meal and rest breaks.
Where breaks are mandated, or are otherwise offered by a business as a matter of policy, courts have held that short breaks of 20 minutes or less should be paid. Longer breaks of 20 minutes or more, however, do not have to be paid.
It’s important to provide time for mandated breaks or breaks that you offer your employees as a matter of policy, of course, but clocking employees out for those breaks automatically or deducting wages to cover them as a standard operating procedure can leave your practice at risk.
Automatic Deductions Can Become a Legal Problem
Claims regarding missed breaks have become so common in healthcare that plaintiffs’ attorneys actually target nurses and other healthcare employees in their advertising efforts. In fact, as we were getting set to publish this blog this morning we discovered news of a more than $4-million settlement by University Medical Center of Southern Nevada related to automatic wage deductions for breaks.
Complaints related to automatic deductions for meal breaks have included healthcare workers having to tend to patients during unpaid breaks, supervisors ignoring employee requests to cancel automatic deductions, a lack of transparency or access to records in order to request a cancellation, forgotten cancellations on the part of employees (it’s still the employer’s job to keep accurate records of time spent on the job), and awareness by supervisors that employees were performing job-related tasks during mandatory meal breaks without adjusting or cancelling automatic deductions.
Though it might seem like a minor problem, daily deduction mistakes can add up quickly. Failing to provide a break in California, for instance, can result in damages of one hour of pay per missed break. In an office with five employees who each make $15 per hour, if each employee missed one break per day, that totals $75 in daily liability for back wages. And if that office were open just four days per week during 50 weeks of the year, that could easily amount to an annual $15,000 responsibility, not to mention the associated legal fees, fines, and penalties such a hypothetical employer would likely face.
The Best Way to Handle Breaks
Generally speaking, your best bet is to simply have your employees clock out for meal breaks and clock back in when they’re ready to get back to work.
Though automatic payroll deductions for breaks may not be forbidden by the law outright, the benefits of employing such a strategy will simply not outweigh the risks of doing so. Better to overpay for the occasional half-hour break when an employee forgets to clock out than to face several thousand dollars in back payments all at once, along with legal fees, fines, and penalties for operating outside of wage and hour laws for any substantial period of time.
Have questions about how to use your timekeeping system to protect your practice, or any other HR issue? Send us a message and one of our HR experts will get back to you as soon as possible.
Want to learn more about legal timekeeping policies? Checkout these resources: