THE THIRD CIRCUIT COURT REAFFIRMS PAID BREAKS RULE

by Carter Hastings on Jan. 11, 2018

Employment 

Summary: THE THIRD CIRCUIT COURT REAFFIRMS PAID BREAKS RULE

The Third Circuit court recently reaffirmed the paid breaks rule in Secretary U.S. Dept. of Labor v. American Future Systems, Inc., 873 F.3d 420 (3d Cir. 2017). The paid breaks rule states that breaks lasting between five (5) and twenty (20) minutes must be paid for. The rule originates fromTitle 29 of the Code of Federal Regulations § 785.18

In the American Future Systems case the employer, known as Progressive, allowed sales representatives who were paid an hourly wage, to work from home. Progressive only paid these Sales Representatives for time that they were logged-in to their computer system. The company allowed these employees to take a break from work at any time, for any reason, and for any duration. Progressive did not pay the employees for any break that lasted more than ninety (90) seconds. Progressive called this policy, “flex time.”

The Department of Labor (“DOL”) initiated suit against Progressive arguing that the “flex time” policy violated the Fair Labor Standards Act. The Court agreed with the DOL and began by reiterating long standing bright line rules: That it is well established that some breaks constitute “hours worked”; That hours worked is not limited to the time an employee actually performs his or her job duties; That companies are not required by the FLSA to provide their workers with breaks and; If an employer chooses to provide short breaks of five to twenty minutes, the employer is required to compensate employees for such breaks as hours worked.

The Court noted that Progressive’s “flex time” policy forced employees to choose between basic necessities such as going to the bathroom or getting paid. Progressive argued that when breaks are for the benefit of the employee, such as time to take a child to school, it should not have to pay employees. The Court found Progressive’s argument flawed, all of Progressive’s examples of tasks employees could perform during their breaks could not be completed in less than twenty minutes. The Court went on explaining that when breaks are under twenty minutes they are generally for tasks that benefit the employer. Breaks such as coffee breaks do benefit the employee but they are also “beneficial to the employer in that they promote more efficiency and result in greater output.”

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