The Fair Labor Standards Act (“FLSA”) is a federal statute enacted in 1938 with the goal of setting national minimum requirements for employee compensation. It covers areas such as minimum wage and overtime, among other things.
On February 9, 2017, the Third Circuit Court of Appeals was the first United States Federal Circuit Court to address an area of the FLSA which is invoked relatively rarely in civil lawsuits involving compensation disputes. In a case captioned: Secretary, United States Department of Labor v. American Future Systems, Inc., the Department of Labor (“DOL”) sued on behalf of the employees of American Future Systems, Inc., claiming that the employer was violating the FLSA by not paying employees for time that they were logged off of their computers over 90 seconds.
The employer did not deny that it was not paying employees for “breaks” in excess of 90 seconds. The dispute was whether that non-payment violated the FLSA. Two different sections of the FLSA were evaluated.
The first section of the FLSA states:
Rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. They promote the efficiency of the employee and are customarily paid for as working time. They 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.
As a result, the DOL argued that the employees must be compensated for all breaks up to 20 minutes. The second section of the FLSA which was considered states:
Periods during which an employee is completely relieved from duty and which are long enough to enable him to use the time effectively for his own purposes are not hours worked. He is not completely relieved from duty and cannot use the time effectively for his own purposes unless he is definitely told in advance that he may leave the job and that he will not have to commence work until a definitely specified hour has arrived. Whether the time is long enough to enable him to use the time effectively for his own purposes depends upon all of the facts and circumstances of the case.
Thus, the employer argued that the breaks fell under this section and therefore the employer did not have to pay the employees for these breaks. American Future Systems also argued that because the FLSA does not require the employer to provide breaks to its employees, that therefore the employer is not required to compensate employees for these periods.
However, the Third Circuit disagreed, noting that an employee should not have to choose between getting paid and going to the bathroom for more than 90 seconds. The Third Circuit also noted that, with breaks of twenty minutes or less the first section of the FLSA above is applicable, not the second – which would be more appropriately applied to breaks longer than 20 minutes.
Therefore, until and unless the United State Supreme Court later holds differently, employers must compensate employees for breaks up to 20 minutes.
McLaughlin & Nardi, LLC’s employment attorneys are experienced with and knowledgeable about both State and Federal employment laws in a wide variety of areas including compensation requirements. To learn more about what we may be able to do to help, please visit our website, or contact one of our New Jersey lawyers by e-mail or telephone at (973) 890-0004.