WAAG AND CO. [ News | Bulletins ]

In the December 2000 Bulletin, Waag and Co. explained when a meal period must be provided to a non-exempt employee and the penalties that would apply if the meal period were missed. The penalty, an amount equal to one hour of pay at the employee’s regular rate of pay, must automatically be paid to the employee who missed the break. In that same bulletin, we also provided information regarding the one exception to this rule, and explained that there were still some details missing regarding implementation. Although there may ultimately be court interpretations of these rules, the following information reflects the current thinking of the DLSE’s information officers within its General Counsel’s office, which is presently the best source on which employers may rely.

As explained in the December 2000 Bulletin, The new rules provide for one exception to the requirement of paying the one-hour penalty for an "on-duty" meal period. When the nature of the employee’s duties require that the employee cannot be relieved of all duty during the meal period, the employee may agree to an "on-duty" meal period. The classic example of such a job is a night-time security guard; the guard cannot leave the facility unattended, and so must remain on duty during his/her meal period. The "on-duty meal agreement" must be in writing and must state that the employee may revoke this agreement at any time. If there were a legitimate "on-duty meal agreement," then the only change would be that the one-hour penalty would not be payable. The employee still must have a meal period (albeit on-duty) and be paid for all of this time.

Among other requirements addressed in the December 2000 Bulletin, it must be emphasized in order to properly implement an "on-duty meal agreement," the nature of the employee’s job duties must truly preclude being relieved of all duty. It is not sufficient that the enterprise is just too busy for people to really take a break and be free to do as they please for the period, or that it would be more convenient to skip the break.

If all of the legal requirements can be met, the employer may ASK the employee if s/he will sign an on-duty meal agreement. The employer cannot insist. If the employee refuses to sign, the employer must pay the employee the penalty payment for "working" the meal period (even though "working" means nothing more than remaining on site while taking this break). As a result, the employee will be receiving a 12.5% pay raise (assuming an 8-hour shift). It does not matter whether or not this will create financial difficulties for the employer; if the employee works through the meal period without a voluntarily signed agreement, then the penalty must be paid. Moreover, there can be significant morale problems where some employees agree to sign and others do not. The employer cannot fire the non-signing employee, cut the employee’s hours (i.e., to five hours, thereby avoiding the meal requirement), reduce the employee’s pay to offset the penalty, give pay raises only to employees who sign, or take any other action that might be viewed as discriminating against the employee for refusing to sign the agreement.

The effect of signing the on-duty meal agreement is simply that the employee would be waiving the 12.5% windfall of the penalty payment. The DLSE will say that this is not entirely true; if the employee does not wish to sign the agreement, the employer has the option of relieving the employee for the meal period. In such instances, the employee would be losing the extra half-hour of pay that would have been treated as "time worked" simply by signing the agreement and eating lunch on site.

The reality, however, is different. This is because these people cannot be relieved for their meal period, or else the employer would not be allowed to ask them to sign an on-duty meal agreement in the first place. As a result, it will be an unusual employee who will magnanimously give up the 12.5% windfall for no legal reason.It would be a different issue if an employee simply refused to stay on site and "work" the meal period. Assume that the night-time security guard says, "I don’t care how much you pay me for the time worked and in penalties, I’m not sticking around. I’m leaving for my half-hour break." The DLSE agrees that the employer has a right to demand that the employee stay, so long as the penalties and the time worked are properly paid. If the employee refuses to perform the job (i.e. stay on site when required), the employer would have the right to take disciplinary action.

One final twist: Under Wage Orders 4 and 5, an employee who works in the "health care industry" – as narrowly defined in the Wage Orders – is covered by a different definition of "hours worked." For those employees, merely being required to stay on the premises, with no other duties or obligations, is not construed as "hours worked." Accordingly, such employees can be required to "clock-out" for lunch, even though they are required to stay on site during their meal break. It is important to note that not every type of health care organization falls within the Wage Orders’ definition of "health care industry;" employers who think this may apply should carefully review the applicable Wage Order and consult qualified employment counsel before taking any action.