Dive Brief:
- TE Connectivity Networks and Tyco Electronics will pay $4.96 million to 1,300 non-exempt employees in California who had half-hour meal periods automatically deducted from their paychecks from 2010 through 2017 (Wilson v. TE Connectivity Networks, Inc., No. 14-cv-4872 (N.D. Calif. June 17, 2019)).
- The average settlement amount is approximately $2,450.87 per employee, up to a high of $4,719.68.
- The settlement also provides for $37,500 to be paid to the California Labor and Workforce Development Agency to resolve claims arising under the state's Private Attorneys General Act.
Dive Insight:
This case represents the latest in a trend of employers coming under fire for automatically deducting pay for workers' meal breaks. The law is clear: Nonexempt workers must be paid for all time worked. For this reason, automatic deduction policies can create big problems for employers unless there are safeguards in place.
Employers in various industries are getting nailed for auto-deduct policies, including hospitals and nursing care facilities. Along similar lines, Sprint recently settled allegations that it made illegal 10% deductions from workers' commissions.
Note that it can be risky to track only total hours, even if that record is correct. Even if employees are ultimately paid for the correct number of hours, some experts believe the practice could violate the Fair Labor Standards Act mandate that accurate records be kept. Additionally, employees must sign off on time records when employers adopt exceptions timekeeping, according to U.S. Department of Labor regulations.
