The DOL has filed a lawsuit against Lexington Place Assisted Living Homes Inc. in Dallas, Texas. Certain company officials have also been sued. The DOL has asserted that the company and its leaders have engaged in alleged violations of the FLSA's overtime and record-keeping provisions. The suit is based on DOL investigations in which the agency says it found the employer had committed willful or repeat violations resulting in a total of approximately $40,000 in unpaid overtime compensation owed to 88 employees. Additionally, the agency has assessed the employer $20,570 in civil penalties based on previous violations.
According to the DOL, its investigations found that the company made improper deductions from employees' wages for lunch periods when they didn't take lunch breaks. Because their work time wasn't correctly recorded or paid, the employees didn't receive proper overtime compensation for all hours worked over 40 in a week as required by the FLSA. Also, several employees were paid "straight time" wages, rather than 1.5 times their regular rate, for hours worked over 40 in a week. Finally, the DOL alleges that the employer failed to maintain accurate records of employees' wages and work hours.
Many employers make automatic deductions for lunch breaks through their payroll systems. If employees choose to and are allowed to (or required to) work through any part of their lunch breaks, it could be problematic for those employers. For instance, if an employee is docked an hour a day for lunch but only takes 30 minutes for lunch and works the remaining time, the employee may only get paid for eight hours, even though they may work eight and one-half hours that day. I speculate, but this may be what happened in the DOL case.
In Texas, the DOL looks at overtime from a weekly perspective (40 hours). Most employers have a workweek starting Monday morning and ending Sunday evening. If an employee works 8.5 hours in a day but only gets credit or paid for 8 hours that day, then that employee either has to be relieved at the end of the 8 hour shift, relieved at the end of the week once they reach a total of 40 total hours worked, or paid overtime for all hours worked beyond 40 in a workweek. There are no other options.
Please note though that the company gets to set employees' hours, not the employee. If an employee is violating a policy which requires a 30 minute or 1 hour lunch, and a supervisor learns of it, then the company has to pay for that time but can discipline the employee for failure to follow company policies and procedures related to hours and/or permission to work overtime.
Also note that the DOL sued "company officials." That means they have sued one or more people personally. Please keep in mind that you can be sued individually. It is generally settled law that certain managers, depending on factors such as the amount of interest and control they exert over the structure of an employment relationship, can be individually liable for violations under the FLSA as an "employer." Being an incorporated or limited liability company does not protect you.