Human Resource Blog

PTO for lunch

I am in Utah and I would like to give my employees a half hour paid lunch. Can I consider this PTO so that I am not paying overtime for the 2.5 hrs on any week they get more than 40 hours?

We applaud your sentiment, but we are not big fans of this plan.
First of all, no, this would probably been seen by the U.S. Department of Labor and other enforcement agencies as an Illegal attempt to avoid paying overtime. Second, even if it was legal, forcing employees to use PTO for lunch would make you one of the meanest employers in the world. You would essentially be reducing each employees annual PTO by 130 hours, or 3.25 weeks per year. There is no doubt that everyone who works for you would rather have the extra vacation. And using PTO for lunch would still present a tracking problem. How are you going to know when an employee works through lunch, and is genuinely entitled to overtime?

Rather than jump through hoops giving employees benefits with one hand and taking them away with the other, it makes far more sense to simply give employees unpaid meal breaks. Under the federal FLSA, or Fair Labor Standards Act, any meal break of more than 20 minutes, when the employee is completely relieved of duty, may be unpaid. If the employee is not completely relieved of all duties, then they must be paid for the meal break and it counts towards overtime. This is how 80% of employers handle meal breaks.

The second option would be to give employees paid meal breaks, but let them know they are expected to finish their work in 40 hours, so you do not have to pay overtime.

The third option, of course, is to continue to give paid meal breaks and just pay the overtime. Being a nice guy comes with a price — sometimes a very high price.

The only real purpose in giving paid meal breaks is to convince your employees that you are an exceptionally nice employer — one who provides benefits in the top 20% of all employers. But, by requiring that they use PTO for breaks, you are creating the opposite impression — that you are an extremely miser-like scrooge of an employer.