Tuesday, December 19, 2023

This is what it looks like to kick a business while it’s down

Last week, Corky & Lenny's, a deli that has been a local institution for the past 67 years, closed its doors. The owners cited staffing shortages and burnout as the primary causes.

Just three days later, one of its former employees filed a collective action lawsuit under the Fair Labor Standards Act for unpaid wages against the business and its owners. The named plaintiff, who worked as a server at the restaurant, claims that the business automatically deducted 30 minutes per shift for lunch for all non-exempt employees regardless of whether they took their lunch breaks or worked through them. She further claims that the business no longer had any method for employees to report days on which they did not take a lunch break, and otherwise ignored complaints of unpaid wages.

Ohio has no requirement that an employer provide any breaks at all to its employees. If, however, an employer provides breaks, the FLSA governs whether the break time is paid or unpaid.

😴 Rest periods — defined as breaks of 20 minutes or less — are counted as hours worked whether or not the break is paid. Because they count as working time regardless, these rest breaks are customarily paid.

🍽️ Bona fide meal periods — breaks of more than 20 minutes — are not considered hours worked. To qualify as a bona fide meal period, however, the employee must be totally relieved of his or her work duties. According to the Department of Labor: "The employee is not relieved if he is required to perform any duties, whether active or inactive, while eating."

Thus, while a meal period can be unpaid, any work performed by an employee during a meal period would disqualify that break as a bona fide meal period under the FLSA and the statute would require the employer to compensate the employee for that time.

The key legal phrase to know here is "suffered or permitted to work." Work that an employer knows or should know that an employee performed counts as work time for which the employer must pay. This legal standard would encompass Corky and Lenny's servers who worked through their lunch breaks. The reason is immaterial; the hours count as compensable work time.

If (and it's a big if) Corky & Lenny's servers are working through their lunch breaks without pay and the business knows or should know that they are working, the restaurant and its owners have some liability concerns.