Charles de Montesquieu, a French social commentator and political thinker during the 1700’s said, “Lunch kills half of Paris, supper the other half.” If small businesses aren’t careful, lunch can kill them as well.
We have received many calls recently asking if our system allows for an automatic lunch deduction. This topic circles around occasionally. The answer is still no…and while avoiding expensive litigation is a great reason NOT to begin this practice, another should be considered. It is our raison d’etre…capturing accurate time.
A company may offer an automatic 30-minute lunch deduction; however if it required employees to clock-in/out for lunch, it may discover that employees are taking more than 30 minutes a day. That would accrue several minutes a day for each employee working 5 days a week, 20 + days a month. An employee who makes $7.50 an hour and is overpaid 5 minutes a day would receive over $160 annually in unearned income. Make it $200 after payroll taxes and FICA, and then multiply that figure by the number of employees on payroll.
Another consideration is not just the unearned, undeserved money that is paid to employees who abuse lunch, but it’s the unmerited time that accrues towards their weekly timecard. According to the guidelines under the new healthcare law that goes into effect January 2014, an employee who averages 30 hours a week (or 120 hours a month) is fulltime equivalent (FTE). If a company has 50 employees or more then it must provide affordable health insurance for these FTE employees or pay a fine.
Unlike any other period, small businesses must diligently pursue accurate time keeping. Allowing unearned time to accrue on timecards for part-time employees can be an expensive, yet a very avoidable threat to a business. We understand small businesses’ need to comply with the law’s requirements for lunch time and breaks, but a better way exists than doing an automatic lunch deduction. Two calls a day (a call out for lunch and then back in from lunch) is only 25 cents a day (or less) per employee. A quarter is a great investment to ensure legal compliance while also strictly monitoring time.
Enjoy your lunch. Don’t let it kill your business.