NEW EMPLOYER LIABILITY FOR
MISSED REST BREAKS

A recent decision from the Oregon Court of Appeals has, for the first time, created a private cause of action for unpaid wages and penalties resulting from missed rest breaks. As a result, employers must be more vigilant and establish internal procedures to ensure that non-exempt employees take required rest periods.

Oregon employers have long been required to generally provide nonexempt employees with paid rest periods of at least 10 minutes for each four-hour block of time worked. Regulations from the Bureau of Labor & Industries (BOLI) are quite specific and demanding as to when such breaks must be taken, setting out limited “safe harbors” that are difficult for most employers to satisfy. In the past, violations of this requirement may have resulted in administrative fines imposed by BOLI.

However, this new case holds that if employees do not take mandatory rest breaks, it results in underpayment of wages. Under this new and imaginative ruling, employees who do not take rest periods can assert claims for unpaid wages, even though they will have been paid for all time actually worked. The theory used by the court was that for every 4 hours of pay required by law, only 3 hours and fifty minutes (assuming a 10 minute break) have really been worked. Thus if breaks are not taken, employees have worked time for which they have not been paid.

This ruling can result in potential claims under both federal and state laws for failures to pay wages in a timely fashion, to pay final wages, and to pay overtime wages. Under current case law, this could result in multiple layers of penalties and liquidated damages, together with attorneys’ fees. It also raises the potential of class action litigation, which has become a very powerful weapon for employees in wage and hour cases.

Our experience has been that BOLI takes meal and rest breaks very seriously. There is every reason to believe that lawyers representing employees will now have the financial incentive from this new decision to be just as attentive to these issues.

In order to counter these anticipated claims, employers should assume that they will be required to prove that employees took all required rest breaks. Mere anecdotal evidence that “all of our employees always took breaks during the day” will not be sufficient. In order to accomplish this, most employers need to expand existing timekeeping policies. For example, it may be appropriate to revise timesheets to better document these breaks, and to discipline employees who do not take breaks.

It should also be noted that while BOLI will continue to enforce the right of employees to take meal breaks, this recent opinion also ruled that failures to take meal breaks will not result in a private cause of action. This is because, meal breaks, unlike rest breaks, are unpaid; there are no unpaid wages involved.

For more information, and for assistance in structuring internal safeguards that will militate against any such claims, contact Jack Cooper, a partner at Dunn Carney specializing in employment law, or your regular Dunn Carney contact person.

Closely Held
Business Team

The Closely Held Business Team - Dunn Carney is dedicated to assisting business owners in navigating through the opportunities and challenges the law presents to advance each owner’s success in business. They understand the multifaceted issues business owners face each day and the need for responsive and proactive legal counsel.

Team members include:
Randy Duncan, Team leader
Bob Allen
John Barhoum
Merrill Baumann
David Buono
Brian Cable
Jack Cooper
Ken Davis
Tim Hering
Frank Hilton
Elizabeth Howard
Scott Jonsson
Robert Kerr
JoDee Keegan
Kelly Martin
David Rossmiller
Eric Smith
Kyle Stinchfield
Dan Vidas
Matt Wilmot
Bob Winger
David Zehntbauer