Employer Facing Big Bill For Requiring Workers to Clock Out for Bathroom Breaks

January 5, 2016, 6:56 PM UTC
Berlin Inaugurates Gender-Neutral Toilets
BERLIN, GERMANY - NOVEMBER 24: Urinals hang on a wall in a newly-inaugurated gender-free toilet at the office building of the city's Senate Administration for Work, Integration and Women (Senatsverwaltung fuer Arbeit, Integration und Frauen) on November 24, 2015 in Berlin, Germany. The administration has converted four of its previously separate men's and women's toilets to gender-free toilets in a sign of respect towards Berlin's trans-gender community, who otherwise often face potentially uncomfortable decisions or confrontations in the use of public toilets. (Photo by Sean Gallup/Getty Images)
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An employer that had required workers to clock out for bathroom breaks has been ordered to pay at least $1.7 million in damages and back pay.

American Future Systems Inc., a newsletter publisher that employs mostly telemarketers, is required to submit a proposal on how it will manage payment by Thursday, after a judge ruled in December that the Malvern-based company was in the wrong, according to the Philadelphia Inquirer.

American Future Systems will be required to pay out at least $1.75 million in back pay and damages to around 6,000 workers spread across 14 call centers. The company and Department of Labor are still working out how much the total cost will be.


The Labor Department filed a lawsuit against the company in 2012 after discovering that, after accounting for unpaid breaks as short as two or three minutes throughout the day, employees weren’t earning a $7.25 minimum wage. “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,” Jim Cain, the district director for the Department of Labor’s Wage and Hour Division, said in a press release. “The judge’s decision reaffirms how clear the FLSA [Fair Labor Standards Act] is about short breaks being compensable, and goes a long way in making these employees whole by awarding liquidated damages.”

The Fair Labor Standards Act doesn’t require companies to give their employees lunch or coffee breaks, but short breaks are covered for compensation under the law, according to the Department of Labor.

Fortune reached out to the company and will update this story with any response.