Human Resource Blog

Automatic Lunch Deduction - Leaving Premises

	Attendance Management
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What is the federal/state (Michigan) requirements for clocking out for breaks when leaving the premises? Is this strictly company policy?

Our time clock uses an automatic lunch deduct but company policy requires clocking out if leaving the premises.

For whatever reasons (the employees don’t like clocking out for lunch, the payroll office likes the nice rounded automatic 30-minute deductions) I was asked if we could maintain a written lunch log instead of having associates clock out for lunch when they leave the building. Would this satisfy the legal requirements to prove associates are “off the clock”?

This is a matter of company policy, but you will want to check with a labor law attorney before you change it. Frankly, we don’t think it’s a very good idea. The major issue is workers’ comp coverage. Using a time log, it may be difficult to prove that an employee was not “on the clock” when away from the premesis. That could make the employer liable if the employee had an accident. If the employee was injured, it could be a legitimate workers’ comp claim, because the employee was “on the clock.” But many workers’ comp insurance policies specifically exclude employees who are off the premesis. This could result in the company being financially liable for medical bills in the thousands of dollars — or even exceeding $100,000.  If, heaven forbid, an employee was involved in an auto accident that killed someone else, the employer might be liable for that, as well, because the employee was on the clock. It’s possible that the employer would win this case in court. It’s also possible that the legal fees to do so would exceed $250,000.

Generally employees don’t want to clock out because they are actually taking more than 30 minutes, which affects productivity. Accounting people like the automatic deduction because it permits them to dock the employee’s time even when they don’t take a break (which is illegal.) Under the federal FLSA, employers must maintain ACCURATE payroll records. Clocking in and out for breaks does this. Our recommendation would be that you have all employees clock out for breaks, whether they are leaving the premesis or not. It’s almost impossible to “prove” that employees are off the clock if they are not off the clock.