Q&A: Recouping pay for lunch hours not clocked out

Question

We recently discovered that one of our employees has not been properly clocking out for lunch, resulting in unintentional compensation for those hours. Given that we are located in Texas, we’d like to know if we can require that the employee compensate us for those hours of “lunchtime” that we weren’t intending to pay the employee?

Answer

Federal wage and hour law does not mandate that employees be given either paid or unpaid rest or meal periods. Whether breaks are required is left up to the states. Texas has no requirements for rest or meal breaks. Employers are not required to pay employees for time spent during bona fide meal periods.

During such an unpaid meal period, an employee must be completely relieved from duty for the purpose of eating a regular meal. It is not necessary that an employee be permitted to leave the premises if they are otherwise completely freed from duties during the meal period. An employee who is required to perform any duties, whether active or inactive, while eating is not considered to be completely relieved of duties. For example, an office employee who is required to eat at their desk or a factory worker who is required to be at their machine is working while eating.

Some courts have adopted a strict reading of this “completely relieved from duty” standard (see, e.g., Abendschein v. Montgomery Co., Md., 984 F. Supp. 356 (D. Md. 1997)). However, many other courts have adopted a slightly more relaxed view, ruling that in certain circumstances, an employee may be asked to perform minimal work duties during the meal break and not be compensated for that time. This more relaxed standard has been referred to as the “predominant benefit” standard, referring to the courts’ inquiry into whether the worker’s mealtime is spent predominantly for the benefit of the employer or for the worker. Under this interpretation, courts generally rule that if the meal break is spent primarily for the employer’s benefit, it is compensable. If the period is spent primarily for the employee’s benefit, it is not compensable. In applying this standard, courts usually look at whether the employee primarily is engaged in work-related duties during the meal periods.

Texas’s wage deduction law provides that an employer may withhold part of an employee’s wages only if the employer is ordered by a court of competent jurisdiction, is authorized by state or federal law, or has written authorization from the employee to deduct part of the wages for a lawful purpose (Tex. Lab. Code Ann. § 61.018). The Texas Workforce Commission (TWC) has acknowledged that case law on deductions for wage overpayments is unclear. However, the TWC has strongly suggested that an employer is permitted to recover a wage overpayment by making a wage deduction as long as the employee consents in writing.

The TWC also issued a sample wage overpayment and underpayment policy containing an employee acknowledgment that states: “If the employee has been paid in excess of what he or she has earned, the employee will need to return the overpayment to the Company as soon as possible. No employee is entitled to retain any pay in excess of the amount he or she has earned according to the agreed-upon rate of pay. If a wage overpayment occurs, the overpayment will be regarded as an advance of future wages payable and will be deducted in whole or in part from the next available paycheck(s) until the overpaid amount has been fully repaid. Each employee will be expected to sign a wage deduction authorization agreement authorizing such a deduction.”

If the employee has been performing any sort of work during these breaks, we would not recommend attempting to recoup the time without consulting with an attorney first. If this employee has been off-site and not performing any work, you may be able to recoup those hours, however, you would need to obtain the employee’s authorization in writing.

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