Malvern, PA–For telemarketing workers of a Malvern publishing company, deciding when to take water, bathroom and rest breaks was a matter of dollars and cents.
The workers had their pay docked for virtually all time not spent making sales calls, sometimes bringing their wages below the federal minimum wage.
A federal judge recently found the defendants in violation of the Fair Labor Standards Act, and determined that American Future Systems, doing business as Progressive Business Publications, and its owner, Edward Satell, are liable for pay back wages resulting from these unpaid breaks, plus an equal amount in liquidated damages.
Although the exact amounts have not yet been determined, the U.S. Department of Labor estimates that for violations occurring through June 2013, Progressive and Satell are liable for at least $1.75 million in back wages and liquidated damages to more than 6,000 employees who worked in 14 call centers throughout Pennsylvania, New Jersey and Ohio. Progressive’s refusal to come into compliance for more than two years during the course of the litigation will increase significantly the amount of back wages and damages due its employees as a result of its illegal pay policy.
“For far too long, American Future Systems penalized its employees for taking breaks to meet the most basic needs during the work day — stretching their legs, getting a glass of water or just using the restroom,” said Jim Cain, district director for the department’s Wage and Hour Division. “The judge’s decision reaffirms how clear the FLSA is about short breaks being compensable, and goes a long way in making these employees whole by awarding liquidated damages.”
Issued on December 16, 2015, by a judge in the U.S. District Court for the Eastern District of Pennsylvania, the decision resolves the primary issues in a department lawsuit filed after a Wage and Hour Division investigation found that telemarketers had to clock in and out for every break, even those as short as two to three minutes. The timekeeping system then deducted the break time from their total hours worked each week. The Wage and Hour Division advised the company that the practice violated the law, but the employer failed to comply with the FLSA. The court found the company also violated FLSA recordkeeping requirements.
“Rehabilitative breaks have always been considered compensable time under the law,” said Oscar L. Hampton, the department’s regional solicitor in Philadelphia. “This action underscores how aggressively we plan to enforce the law to ensure that workers receive the proper wages.”
The Wage and Hour Division’s Philadelphia District Office conducted the investigation. Attorneys in the department’s Philadelphia regional solicitors’ office litigated the case.