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Court Rules Employees Not Required To Clock In and Out Every Break

PHILADELPHIA — According to a federal court, employers must compensate employees for taking short breaks under the Fair Labor Standards Act (FLSA). The court issued this decision in a lawsuit brought by the U.S. Department of Labor’s Wage and Hour Division (WHD) on behalf of telemarketing employees against their employer, American Future Systems Inc. After conducting an investigation, the WHD found that American Future Systems violated FLSA and, subsequently, filed the lawsuit.

According to the DOL, the company is potentially liable for at least $1.75 million in back wages and liquidated damages to more than 6,000 employees who worked in 14 call centers throughout Pennsylvania, New Jersey, and Ohio. Liquidated damages are the result of the court finding that the company failed to show good faith efforts to comply with FLSA.

Unlawful Break Policy

The court’s opinion stated that American Future Systems violated FLSA by implementing a break policy that required telemarketing employees to clock in and out for every break, even those breaks that lasted only a few minutes. The company apparently penalized employees for taking breaks to meet the most basic needs during the workday, including stretching their legs, getting a glass of water, or using the restroom. The policy required employees to spend all of their time making sales calls, which resulted in their wages falling below the minimum wage.

Additionally, the court found that American Future Systems developed this uniform break policy and implemented it across all of its call centers. The policy expressly stated that personal break time was not paid because it was a disadvantage to the employees to do so, even though it did not explicitly prohibit them from taking breaks.

Breaks Under FLSA

According to the WHD, rest periods of short duration (20 minutes or less) promote the efficiency of employees and are commonly paid for as working time. FLSA requires that employers count these short break periods as hours worked and compensate employees accordingly. If the employer has clearly communicated to employees that they are only authorized to break for a specific length of time, any extension of that break is contrary to the rules and may not be counted as hours worked. However, bona fide meal periods lasting 30 minutes or more generally need not be compensated as work time. Employees must be completely relieved from duty during meal breaks, and if they are required to perform any duties, that time may be compensable work time.

Employees should not be penalized for taking short breaks that promote employee efficiency, and FLSA likely counts those hours as compensable time. If you believe that you have been deprived of your wages due to an unlawful employer policy regarding work hours, you should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page. Our wage lawyers will evaluate your situation and help you craft the best strategy for obtaining compensation. Call our experienced attorneys today.

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