Third Circuit Rules Employers Have to Pay Workers for Short Breaks

What is Flex Time?

American Future Systems, d/b/a Progressive Business Publications (“Progressive”), a publisher and distributor of business publications, employed sales representatives who were paid an hourly wage and received bonuses based upon the number of sales per hour while they were logged onto the computer at their Progressive workstations. Progressive maintained a company policy that allowed the employees to log off of their computers at any time. However, the employees were only paid for time they were actually logged onto the computers. Progressive referred to this as “flexible time” or “flex time”. Under Progressive’s “flex time” policy, the employees could log off of their computers at any time, for any reason, and for any length of time and could leave the office when they were logged off; they could also choose their start and end time (between 8:30 am and 5:00 pm, Monday through Friday, as long as they did not work more than 40 hours per week) and could take as many breaks as they pleased. However, Progressive only paid the employees for time they were logged off of their computers if they were logged off for less than ninety seconds. That included time employees were logged off to use the bathroom or get coffee.

The Secretary of the U.S. Department of Labor (the “DOL”) filed suit against Progressive arguing that the “flex time” policy violated the federal Fair Labor Standards Act (the “FLSA”). Specifically, the DOL argued that the “flex time” policy violated the following FLSA regulation which it contended created a bright-line rule that employees must be paid for all breaks of less than twenty (20) minute duration:

Rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. They promote the efficiency of the employee and are customarily paid for as working time. They must be counted as hours worked. Compensable time of rest periods may not be offset against other working time such as compensable waiting time or on-call time.

29 C.F.R. § 785.15 (the “break regulation”).

Break Time Versus Flex Time

After summary judgment was granted, in part, to the DOL, Progressive appealed to the Third Circuit Court of Appeals arguing that that it does not have a “break policy” per se. Rather, it claimed that the “flex time” policy, which allows employees to do whatever they wish and be wherever they want for periods of twenty minutes or less while logged off of their computers, does not constitute “hours worked.” Therefore, according to Progressive, since the FLSA does not require it to provide breaks, it does not need to compensate its employees for these periods. Secretary United States Department of Labor v. American Future Systems, Inc., 873 F.3d 420, 425 (3d Cir. 2017). The court rejected this argument. Ibid. The court began its analysis of Progressive’s appeal by first reaffirming some general principles under the FLSA: (a) it is well established that some breaks constitute “hours worked” under the FLSA; (b) hours worked is not limited to the time an employee actually performs his or her job duties; and (c) the FLSA does not require employers to provide their employees with breaks; however, 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. Ibid. The court then provided the following analysis:

The “log off” times are clearly “breaks” to which the FLSA applies.

The 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 ninety 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 ninety 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. The FLSA is a “humanitarian and remedial legislation” and “has been liberally interpreted.”

Although employers need not have any break policy, we refuse to hold that the FLSA allows employers to circumvent its remedial mandates by disguising a break policy as “flexible time,” as Progressive is seeking to do here. Accordingly, we find that Progressive does have a break policy, and thus, the FLSA applies.

Id. at 426.

This case provides guidance on a number of key points employees must understand regarding their rights under the FLSA. First, employers are not required to give you breaks. Second, if an employer does offer you break time, they must pay you for breaks lasting less than 20 minutes and count them towards overtime. Third, and conversely, however, if your employer gives you a lunch break that lasts more than 20 minutes, it does not have to pay you for it and that extra half-hour to one-hour lunch break does not count toward overtime hour accumulation for the week. These are important principles to remember.

Get in Touch with an Experienced New Jersey Employment Lawyer

If you believe your employer is not properly paying you for breaks or is not counting break time toward overtime accumulation, contact the New Jersey wage and hour dispute attorneys at The Sattiraju & Tharney, LLP, located in Princeton, New Jersey, at (609) 722-7039 for a free telephone consultation. We fight for workers’ justice under a litany of employee-rights statutes including the FLSA and the New Jersey Wage and Hour Law.