This post is a courtesy of Fox Rothschild attorney Mark Tabakman, Esq., and was first published on Fox’s Wage & Hour – Developments and Highlights Blog. It is particularly relevant for health care providers that automatically deduct lunch breaks from their employees’ wages:
The health care industry seems to be ground zero for a particular kind of class action lawsuit. Many of these health care institutions have policies where a thirty-minute lunch period is automatically deducted from the daily scroll of hours. This is quite understandable, from an operational perspective, as it usually is difficult for employees to go to their time clock, punch out and then back in for lunch. Although this facilitates operational efficiency, it also leads to allegations that employees supposedly worked through lunch and were not paid. Then, a class action ensues.
The latest example of this is a group of nurses who have received conditional certification for a class in a FLSA collective action based on the theory that they took their lunch breaks when they really worked. The case is entitled Hamid et al. v. The Chester County Hospital and was filed in federal court in the Eastern District of Pennsylvania.
Securing conditional certification in a class action suit is often not that hard, as only a modest showing of commonality has to be made. In approving the request for conditional certification, the Judge agreed that the named plaintiff showed sufficient commonality with other workers, concluding she had the same job duties and same kind of claims as the other hourly nurses at the Hospital. He concluded that “Hamid has provided some evidence, beyond mere speculation, of a ‘factual nexus’ between defendants’ pay and break structure policy for Hamid and defendant’s pay and break structure policy for other nurses.”
The lawsuit charged that the hospital automatically deducted break times from employee wages notwithstanding that the employees duties’ prevented them from taking their breaks. A second theory of the lawsuit is the employer’s alleged failure to include weekend premium pay, e.g. shift differentials, when computing overtime pay. Under the FLSA regulations, these kinds of extra payments must be included when the employer calculates overtime.
The Judge noted that the plaintiff had presented sufficient evidence to meet the “lenient” standard for conditional certification. This low standard necessitates that the named plaintiff must demonstrate a “factual nexus” between the application of the employer’s policy to not only the named plaintiff but to the co-workers allegedly affected in the same manner. The Judge concluded that the employer’s pay and break policies applied to all workers, causing them to not receive all of the wages to which they were entitled . The Judge also found that the named plaintiff had made “a modest showing” that she worked under the same terms and conditions of employment as the other employees. Thus, a class, at this time, was appropriate.
The concept of a fail-safe mechanism is critical. Any employer who utilizes an automatic deduction system for lunches, which is quite legal, must ensure that there is some way for employees who ostensibly work through lunch to report that missed lunch. Then, the employer can pay for the time if it deems it was properly worked. That way, if the employee does not use the reporting system and then files a suit for wages, he is put on the defensive as to why he did not use the reporting mechanism.
And, there is no (good) answer to that for an employee…