The practice of automatically deducting a set amount of time (e.g., 30 minutes) from employees' pay to account for meal breaks, instead of having employees actually clock in and out for each meal break, (referred to as "auto-deducting" or "auto-docking") comes with significant risks for any employer that implements the practice. A recent suit against a Dallas-based hospital system underscores that auto-docking is particularly dangerous for employers in the health care industry, creating an unnecessary vulnerability to claims for unpaid wages.
By way of background, under both the federal Fair Labor Standards Act and the New York Labor Law, bona fide meal breaks are not required to be paid. However, if an employee performs any work during the meal period, the employee must be compensated. In addition, employers are responsible for keeping accurate records of all time that employees work. If such records do not exist, the Department of Labor or a court is likely to rely on the employee's account of time he or she worked.
On July 28th, a nurse filed a collective action under the Fair Labor Standards Act on behalf of as many as 1,000 current and former nurses employed by a Dallas-based hospital system. The suit alleges that the nurses are owed pay (including overtime) for time that they performed work during their meal breaks.
According to the plaintiffs in the suit, the hospital has a practice of automatically deducting 30 minutes of pay from each shift that a nurse works, which is intended to account for meal breaks. The plaintiffs allege that the hospital automatically made this 30-minute deduction, even when nurses did not take a full 30-minute meal break or any break at all. The hospital's practice assumes nurses are able to take an uninterrupted 30-minute meal break during each shift and their pay is reduced accordingly, but the plaintiffs claim that, in practice, their meal breaks are often interrupted. The plaintiffs point out in their suit that the hospital's policies require nurses to be responsible for direct patient care throughout their shifts, and require that they carry cordless phones or other electronic devices to receive calls from patients or other hospital personnel, including during meal breaks.
While auto-deduct policies may be attractive due to the administrative convenience of eliminating the practice of clocking in and out for each meal break, the recent lawsuit in Dallas highlights the significant dangers of auto-deduct policies. These dangers are particularly acute in the health care industry (and especially in patient care settings) where employees are under demands to attend to patient needs and emergencies that cannot simply be ignored during a lunch break. By requiring employees to actually record all time worked (whether by clocking in and out, or recording meal break times on a time sheet), employers can considerably reduce their risk of lawsuits over missed meal periods.
If you have questions or require further assistance regarding the information contained in this Legal Alert and the impact on your organization, please contact Susan A. Benz, Co-Chair of the Barclay Damon Health Care & Human Services Practice Area at sbenz@barclaydamon.com or Melissa M. Zambri, Co-Chair of the Barclay Damon Health Care and Human Services Practice Area at mzambri@barclaydamon.com.