In a recent and precedential decision by the Third Circuit, employers are obligated to pay their employees for breaks of 20 minutes or less under the Fair Labor Standards Act. In an opinion penned by Third Circuit Judge, Theodore McKee, the Court reviewed the granting of partial summary judgment in favor of the U.S. Department of Labor on claims that Progressive Business Publications failed to pay its employees a minimum wage.
Progressive, a business information publisher and distributor, employs sales representatives working in call centers, which are paid an hourly wage plus bonuses. Progressive had previously eliminated paid 15-minute breaks and replaced it with a program it called “flexible time” under which the employees could log off of their computer workstations during the workday at any time, for any reason, and for any duration. Under the new procedure, Progressive stopped paying the employees after they were logged off for more than 90 seconds. For example, when an employee used the restroom or went for coffee—they were required to log off of their workstation, which the company argued does not constitute “work” under the FLSA.
The Court stated that “[t]he policy that Progressive refers to as ‘flexible time’ forces employees to choose between such basic necessities as going to the bathroom or getting paid unless the employee can sprint from computer to bathroom, relieve him or herself while there, and then sprint back to his or her computer in less than 90 seconds . . . .” “If the employee can somehow manage to do that, he or she will be paid for the intervening period. If the employee requires more than 90 seconds to get to the bathroom and back, the employee will not be paid for the period logged off of, and away from, the employee’s computer. That result is absolutely contrary to the FLSA.”
In reaching this conclusion, the Court applied the DOL’s bright-line rule contained in regulation 29 C.F.R. § 785.18, which states that break periods of 20 minutes or less are compensable. Progressive argued that 29 C.F.R. § 785.16 (dealing with “off duty” time) applied to its policy as opposed to 29 C.F.R. § 785.18 (dealing with “rest”) because the "breaks" taken by its employees while logged off from their workstations are unrestricted periods that can be utilized by employees whenever and however they wish and solely for their own benefit. The Court rejected this contention, concluding that 29 C.F.R. § 785.18 is a separate, more specific regulation addressing the compensability of breaks 20 minutes or fewer. The Court concluded that breaks of 20 minutes or fewer are insufficient to allow for anything other than the kind of activity that benefits the employer.
The ramifications of this case are that employers must abide by 29 C.F.R. § 785.18 and compensate their employees for breaks of 20 minutes or fewer, and that employers cannot dodge this requirement simply by re-characterizing their break time policy.
The case is Sec'y United States Dep't of Labor v. Am. Future Sys., Inc., 16-2685, 2017 WL 4558663, at *1 (3d Cir. Oct. 13, 2017).