Top Payroll Practices for Employee Breaks: Don’t Be Caught Out of Compliance

Workplace breaks can be deceptive. Employees take a fairly short lunch and even less time to grab a cup of coffee, stretch their legs, use the restroom, or have a smoke. Sounds like trivial stuff. But beneath the harmless surface lay a slew of payroll implications.

Employee breaks are subject to labor laws and company policies, making payroll a nuanced affair. But by knowing the different types of employee breaks and applying best practices, you can make payroll a breeze.

Let’s dig in.

Meal breaks

Under the Fair Labor Standards Act (FLSA), you do not have to give your employees bonafide meal breaks. But if you choose to provide meal breaks, the time is unpaid.

Per the Code of Federal Regulations, Part 785, bonafide meal periods typically last 30 minutes or more. For the meal period to be unpaid, the employee must be fully relieved of their duties. If you require that they do any work — whether active or inactive — during their meal period, then the break must be paid.

Many states have meal period laws. If your employees work in any of those states, you’ll need to analyze both state law and the FLSA, then use the standard most generous to your employees. For example, employees in California are entitled to an unpaid meal period if they work over 5 hours for the day.

Smoke breaks

The DOL categorizes smoke breaks as “short breaks,” which generally last 5 to 20 minutes. FLSA regulations do not require that you provide short breaks, but if you do, the time is paid.

Smoke breaks can be tricky.

Let’s say you offer 2 paid 10-minute breaks per workday, but in rapid succession, a certain employee keeps heading outside for a quick smoke. The allotted minutes will add up in no time. Moral of the story? Be vigilant about smoke breaks.

Also, smoke breaks are not a protected disability that requires reasonable accommodations under the Americans with Disabilities Act (ADA).

Coffee and snack breaks

Coffee and snack breaks are part of the “short breaks” crew, which means they’re paid. Note that you do not have to pay for unauthorized short breaks — such as the employee returning from coffee or snack breaks late without your consent — if you clearly communicated your break rules to the employee.

Rest breaks

Rest breaks lasting up to 20 minutes are compensable under federal regulations. If you choose not to give rest breaks, be mindful of applicable state requirements. Employers in a few states, including California and Colorado, must provide rest breaks throughout employees’ work shift. These states typically mandate a paid 10-minute rest break for every 4 hours worked.

1 day of rest in 7

States such as California, Illinois, New York, and Wisconsin have “one day of rest in seven” laws, requiring that employers give employees 1 day of (unpaid) rest every 7 days. Certain employees may be exempt from this rule.

Religious-oriented breaks

According to the EEOC, you may have to provide reasonable accommodation to employees who need to engage in religious practices, unless the accommodation will cause undue hardship to your business.

You can permit employees to use their unpaid lunch or paid short breaks for religious purposes. Just be sure to inform them of the pay details surrounding the breaks.

FMLA-related breaks

In an opinion letter, the DOL responded to a query asking whether a nonexempt employee who takes 15-minute breaks every hour because of an FMLA-qualifying illness should be paid for the breaks.

The DOL asserted that short breaks are usually compensable because they generally “primarily benefit the employer.” However, in limited circumstances, short breaks “primarily benefit the employee and are therefore not compensable.”

The agency determined that the FMLA-protected breaks described in the query primarily benefit the employee and are therefore unpaid.

Lactation breaks

Pursuant to the FLSA, employers must give nursing mothers a reasonable break time for them to express milk for their nursing child for up to 1 year after the child’s birth. The break must be provided each time the employee needs to express milk.

Though you do not have to pay employees for breastfeeding or pumping breaks, you can allow them to use their paid breaks for those reasons.

Bathroom breaks

The federal regulations do not state the number of short breaks that employees can take in a day, only that they commonly last between 5 and 20 minutes. So, you have a lot of leeway when it comes to restricting the number and length of breaks your employees can take.

However, bathroom breaks can be a slippery slope. Limiting bathroom breaks may not go over well with your employees and might be illegal in some cases. On the flip side, unethical employees may abuse unlimited bathroom breaks by constantly and unnecessarily taking trips to the restroom.

The bottom line is that you generally do not have to pay for bathroom breaks that exceed 20 minutes unless you allow a longer period of time for paid short breaks.

Sleeping time

In a nutshell, sleeping time is compensable if you require employees to remain on duty for less than 24 hours and allow them to sleep when not busy.

Breaks for minors

The FLSA’s youth employment provisions do not regulate or mandate breaks or meal periods for minors, but many states do. In most states, minors must receive at least a 30-minute meal break after working consecutively for a specific length of time. Some states mandate short rest breaks only for minors in certain industries.

Whether these breaks are paid or unpaid is up to the state. Further, the definition of “minor” may vary from state to state.

Breaks for nonexempt and exempt employees

Breaks subject to federal law typically apply only to nonexempt employees, who are paid according to hours worked. So, if the break is paid, you must include it in nonexempt employees’ wages. Conversely, if the break is unpaid, exclude it from their wages.

As for exempt employees, most of them receive a fixed salary, which accounts for paid breaks offered by the employer.

However, exempt employees might be excluded from certain federal break laws. For instance, you do not have to provide lactation breaks to nursing mothers who are exempt from Section 7 of the FLSA, which is the section that regulates overtime pay. Also, some states have break requirements for exempt workers.

Keeping an eye on compliance

To accurately administer employee breaks, you must know which laws pertain to your small business. This may depend on your business’ location, size, and industry plus other factors such as types of employees.

It’s also important to establish break procedures that your employees can easily follow. An easy-to-follow rule would be 1 hour of unpaid lunch and 2 paid 15-minute breaks for each workday. Remember to include any special requirements under federal or state law.

Make sure your nonexempt employees clock in and out for designated meal and break periods, and that your timekeeping system simplifies management of paid and unpaid breaks.

Lastly, retain immaculate records of employee breaks. This is vital to complying with payroll recordkeeping laws and emerging unscathed from a DOL audit.