On August 30, 2023, the US Department of Labor (DOL) finally released their long-awaited proposal for updating the FLSA. This includes increasing the minimum salary that an exempt employee must earn to avoid overtime eligibility to nearly $55,000 per year. There are many other key aspects of the DOL’s proposal, so stay tuned to MP as we will be offering content in a variety of formats as this story unfolds.  

But before we address any potential changes, let’s take a brief look at the current FLSA. 

A Brief Look at the FLSA 

Since 1938, the FLSA has been protecting workers’ rights by establishing certain basic labor standards including minimum wage, overtime pay, and child labor regulations. Unless otherwise exempt, the FLSA ensures that employees are paid time and a half whenever working more than 40 hours in a work week. The FLSA also dictates strict recordkeeping requirements to track hours worked and wages paid.  

Enforced by the US Department of Labor Wage and Hour Division (WHD) of the US Department of Labor,¹ the FLSA does not require employers to provide: 

• Time off for holidays 
• Vacations or sick leave 
• Meal periods or rest breaks 
• Premium pay for weekend or holiday work 
• Notice prior to termination or layoff  
• Pay raises or fringe benefits.  

While the FLSA does not require employers to provide the above-listed items, state and local laws may have additional requirements on these matters.  

Note: However, if an employer does offer meal periods or rest breaks, under the FLSA, the employer must document the employee break and compensate the employee for breaks between five- and 20 minutes.  

Breaks of 20 minutes or Less Can Be Counted as Hours Worked  

Many states require that an employer offers its employees breaks, and that the employer compensates its employees for breaks of 20 minutes or less. While this is a general rule of thumb, it also depends on the length of the worker’s shift, and the state in which the work is being performed.  

In fact, according to the Wage and Hour Division’s (WHD) interpretation of the FLSA under 29 C.F.R. § 785.18, a provision states that: “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.”  

Appeals Court Case Reinforces Compensation for Short Breaks under the FLSA 

Just six years ago, ”Secretary of the United States Department of Labor (DOL) v. American Future Systems” (2017) was heard by to the Court of Appeals for the Third Circuit. This case affirmed that the FLSA requires employers to compensate employees for breaks of 20 minutes or less, during which they are free of any work-related duties. Thus, having a good understanding of, and being compliant with, federal state and local laws, can save a company thousands of dollars, while showing employees that they work for an organization that values them and treats them fairly.  

In fact, we recently spoke with a company that had always asked its employees to punch out for five- and 10-minute breaks. This was never a problem until the company was audited by the DOL. When the DOL reviewed the company’s timekeeping records, the DOL found the company to be in violation of labor laws pertaining to breaks. Because labor regulations mandated that employers pay for employee breaks of 20 minutes or less, the company was ordered to provide back pay to employees for all breaks that were 20 minutes or less. What’s more, the company was also ordered to pay additional fines and damages. 

We can’t stress enough how important it is that employers are up to date in their understanding of all relevant federal, state, and local laws, as well as being diligent about strict recordkeeping and employee compensation strategies. 

If you have questions about timekeeping, documenting, and compensating employees for breaks, please reach out to us.  

While we took a brief look at the FLSA and employee breaks of 20 minutes or less in this article, there are other factors for employers to consider regarding compliance with federal labor laws, which we’ll be focusing on in upcoming articles. 

To learn about compliance with federal overtime regulations, be sure to read MP’s article, “Preparing for Upcoming FLSA Changes: Revisiting the FLSA, and the Importance of Complying with Overtime Regulations.”

Questions? Comments? Contact us today!  

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