Tuesday, February 26, 2019

Automatic Pay Deductions for Lunch Breaks Could Automatically Lead to a Lawsuit

Do you have a timekeeping system that automatically deducts time from an employee’s paycheck for things like lunch breaks? If so, you should take a look at Magpayo v. Advocate Health and Hospitals Corp., where such a system subjected an employer to a class action lawsuit.

The class action lawsuit was brought by 262 emergency room nurses who claimed that they did not receive the pay they were entitled to because automatic deductions were taken out of their paycheck for lunch even when they did not take a lunch break. Although the nurses were often required to work through their lunch breaks, this was not captured by the hospital’s payroll software, which automatically deducted the time the nurses supposedly spent on their lunch breaks. The lawsuit also claimed that the payroll software did not indicate when the nurses worked overtime, assuming that they only worked 40 hours each week.

The hospital eventually settled for $1.5 million, with $600,000 going to the attorneys for the nurses. This expense could have been avoided completely if the hospital had more accurate timekeeping software or required the nurses to punch in and punch out when they were on the job. Such provisions seem simple but class action lawsuits for wage and hour violations are pretty common, so employers are obviously having trouble properly paying wages. While properly keeping track of time spent by employees on the job is a tedious task, it is something that employers should take seriously and invest resources in. This may include having one or two employees’ whose sole job it is to keep track of employee time.