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PA Company Pays Big For Non-Compliant Break Policy

Meal and rest breaks have always been a confusing issue for many employers. While federal law does not require that employers provide employees with meal or rest breaks, many employers choose to do so anyways, as a benefit to their employees.

Generally speaking, an employer is not required to pay an employee for a meal or rest break, unless:

  • State law requires employers to provide paid breaks;
  • The employee is required to work during their break (answering phones, etc.); or
  • The break is shorter than 20 minutes.

It was that last stipulation that tripped up a Pennsylvania marketing company, according to a press release released by the US Department of Labor earlier this month.

The release states that American Future Systems (doing business as Progressive Business Publications), and its owner Edward Satell, have been found in violation of the provisions of the Fair Labor Standards Act (FLSA), the governing piece of federal legislation regarding minimum wage and overtime pay standards, due to its practice of docking its telemarketers’ pay for virtually any time not spent making sales calls.

What got the publishing company into trouble, specifically, was its policy that required telemarketers to clock in and out for every break they took, “even those as short as two to three minutes,” according to the DOL. The company’s time and attendance system would then deduct the time spent “on break” from the employees’ total hours worked during the week.

“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,” said Jim Cain, district director for the DOL’s Wage and Hour Division. “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.”

Under the FLSA, breaks shorter than 20 minutes in duration are considered compensable work hours that must be included when calculating the sum of the hours an employee worked in a given week, and must also be considered when determining overtime.

While the exact amount that Progressive and Satell will be required to pay hasn’t been determined, the DOL estimates that they are liable for at least $1.75 million in back wages and damages to more than 6,000 call center employees that worked for the company through June 2013. The DOL’s statement goes on to say that because the company continued to operate under this policy during the more than two years of litigation until the ruling was issued in December, the amount it will be required to pay in back wages and damages to these employees will “increase significantly.”

G&A Partners, a leading national professional employer organization (PEO) and human resources outsourcing provider, employs a team of HR experts who understand the ins and outs of human resources and employer-related laws. Learn how G&A’s highly trained staff can help your business become compliant with the FLSA, HIPAA, PPACA, FMLA, COBRA and all of the hundreds of other federal, state and local laws regulating employers by calling 1-866-634-6713 or visiting to schedule a free business consultation.

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