Be Careful When Requiring Non-exempts to Be On-call During Lunch

You manage payroll for a company that wants to require a large group of non-exempt employees to be “on-call” during their half-hour lunch break. The employees will not be allowed to leave their workstation and will likely be interrupted at least a few times a week to perform work duties. You’ve been asked to determine whether (a) your company can require the employees to be on call during their lunch break; (b) whether they must be paid for their time; and (c) whether the company can provide a meal to the employees in lieu of wages.

Can your company require the employees to be on call during their lunch break?
The FLSA does not require employers to give workers a meal period. However, many states have laws or wage orders that require employers to give workers a meal period and possibly additional rest periods during the work day. With respect to meal periods, the requirements usually specify a 30-minute or one-hour meal break somewhere in the middle of the shift. The standards may also declare that requiring or permitting an employee to work during a meal period will lead to counting the time as hours worked. If your state has such a law, your company may be prohibited from requiring the employees to be on-call during lunch.

Must the employees be paid?
Unless the following three conditions are satisfied, the non-exempt employees’ meal periods must be counted as hours worked:

1. The meal period usually must be at least 30 minutes, but shorter periods may be justified in special cases; however, coffee and snack breaks cannot be treated as shorter, noncompensable meal periods.
2. The employee must be completely relieved of all duties, even inactive duties.
3. The employee must be free to leave the duty post, although confining the employee to the plant premises is permissible.

The mere possibility that emergency work may have to be performed during lunch periods if machinery breaks down does not give pay rights to employees who choose to remain on the plant premises during those periods. However, “on-call” status during meal times is compensable, as are meal periods taken by night watchmen. Similarly, employees not allowed to leave the business location during the break period must be compensated.

Because your non-exempt employees will be required to remain at their workstations, and will be called on to perform duties, their lunch break must be paid.

Can the company provide a meal in lieu of wages?
Your company must pay its employees at the regular rate of pay or provide them with in-kind compensation (such as a meal) equal to or greater than minimum wage. If the value of the meal is less, your employer could face substantial liability.

Another issue may be whether the employees must be given the choice between wages or a meal credit. A Department of Labor regulation concerning acceptance by employees of “facilities” has been interpreted by the Department to mean that employees for whom a meal credit is available must be given the option of choosing whether or not their meals will count toward wages.

However, some federal courts of appeals have disagreed. For example, the Eleventh Circuit has allowed a restaurant employer to take a credit on the cash component of its minimum wage obligation for meals regularly provided, even if employees are not given the continuing option of taking cash instead. In a similar ruling, the Sixth Circuit noted that the FLSA is silent as to whether employees must be given a choice of whether to accept a meal in lieu of a portion of their minimum wage. The court held that a restaurant’s practice of deducting all employees’ wages for the average cost of meals offered through its meal credit plan (based upon the number of hours they work) does not violate the minimum wage provisions of the FLSA—regardless of whether employees actually accept the offered meals.

Cite: 29 CFR §531.30; 29 CFR 785.19; Herman v. Collis Foods, Inc (6thCir 1999) 138 LC 33,872, 176 F3d 912; Davis Brothers, Inc v. Donovan (11thCir 1983) 96 LC 34,346, 700 F2d 1368.

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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.