In a recent seminar sponsored by Jackson Lewis LLC, William J. Anthony, Esq. discussed how, even with the best of intentions, some companies go awry of wage and hour laws. Two situations are of particular interest.
In the first scenario, employees approached their manager asking to change their unpaid lunch hour into two unpaid 15-minute breaks and one unpaid half-hour lunch. The manager was happy to comply, and everyone was content—until the Department of Labor came around.
The agency found that the two break periods were actually compensable. “That’s a half hour a day for 2 years, multiplied by the number of employees and double damages,” said Anthony. “Quite a shock to the manager who just tried to respond to employee wishes.”
In another situation Anthony expects to end up in litigation, a HR VP was thrilled with the company’s new timekeeping system. It automatically deducted 30 minutes for lunch. The VP felt that would keep the records accurate, even when employees forgot to punch in or out for their midday break.
Anthony reports massive class actions occurring around this issue. Auto-deduction in itself is not illegal; the problem is failing to accurately record employee time. If you have an auto-deduct system, make sure there is a way for employees to report to their manager if they do not get an uninterrupted lunch period.
The best way to avoid problems, though, is to have the employees actively involved in recording their time. Recording just the number of hours on a given day is not enough, Anthony says. The time in and out should be part of the record.
One client learned the value of accurate time cards when a group of employees claimed they hadn’t been paid enough overtime. They claimed an additional 6 hours per week for each of the group’s 850 members. The employer’s time records, signed by the employees, showed there wasn’t that much overtime. The company will likely pay for just one extra hour per week. “Without the records, the 6 hours might have stood up,” he says.