A federal appeals court recently upheld a $1.75 million ruling against a multi-state call center company for failing to pay more than 6,000 employees for trips to the restroom and other short breaks during the workday. In affirming the district court decision in Secretary United States Department of Labor v. American Future Systems, the U.S. Court of Appeals for the Third Circuit held that the Fair Labor Standards Act (FLSA) requires employers to compensate non-exempt employees for all rest breaks of 20 minutes or less.
The Department of Labor (DOL) sued American Future Systems, doing business as Progressive Business Publications, for forcing its employees to log out of their computer systems for such short breaks. Since the employees were paid based on when they logged in and out of their computers, they were not compensated for their break time and the cumulative time spent on breaks did not count toward the total hours used to calculate when overtime pay requirements kicked in.
The FLSA does not require employers to provide breaks to employees, but if the employer chooses to do so, FLSA regulations state that “[r]est periods of short duration, running from 5 minutes to about 20 minutes … must be counted as hours worked. Compensable time of rest periods may not be offset against other working time such as compensable waiting time or on-call time.” 29 C.F.R. § 785.18. Bona fide meal periods (typically lasting at least 30 minutes), serve a different purpose than coffee or snack breaks and are therefore not work time and are not compensable.
After the district court ruled in the DOL’s favor, Jim Cain, District Director for the Department of Labor Wage and Hour Division, stated that “for far too long, American Future Systems penalized its employees for taking breaks to meet the most basic needs during the work day – stretching their legs, getting a glass of water or just using the restroom.”
Cain added that “the judge’s decision reaffirms how clear the FLSA is about short breaks being compensable, and goes a long way in making these employees whole by awarding liquidated damages.”