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Will Your Company

Will Your Company's Auto-Deduct Policy Leave You Picking Up the Tab?

Money Minute
(May 19, 2014)

Always in search of the next big case, class action plaintiffs' lawyers have focused their attention on finding situations in which employers have failed to pay employees for all time worked and/or to pay overtime. These wage-and-hour lawyers recognize that even small alleged infractions can yield big damages or settlements if the class of employees is large enough.

Automatic deductions for employee meal breaks are frequently the subject of such litigation. If hourly employees skip or cut short unpaid meal breaks that your payroll system assumes they are taking, you have a problem.

The FLSA does not require paying hourly employees for meal breaks lasting at least thirty minutes or more, but the employee must be fully "off duty" for the entire time. While auto-deduct systems may save employees the hassle of clocking in and out for meals, and even encourage employees to take their breaks, they can create liability when an unpaid meal break is interrupted by ANY work.

If your company has an auto-deduct policy or practice, review your policies and train your supervisors regarding the importance of ensuring employees are documenting all time worked, including work performed during a meal break. You should also periodically audit your timekeeping practices and records to ensure appropriate overrides are being made and compliance with the FLSA in this and other areas.


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