Case Studies on Compensation and Benefits

Case 5.1: The 10-Minute Meal Period

For this assignment, you will take on the role of an HR manager and review various case studies  concerning compensation and benefits. Within the case studies, you will. Evaluate which compensation and benefit laws best apply to each scenario. Provide a rationale for each of your decisions. For your rationale, Explain how the situation meets each element that needs to be proven or satisfied under the specific law. Assess possible arguments against your position and counter those arguments with a minimum of three scholarly and/or credible sources.

CASE 5.1 The 10-Minute Meal Period The employees made a deal with their manager that if they took a 10-minute lunch period they would be able to quit 20 minutes early and still work eight hours per day. (They also had two rest periods.) After a 3-year period, one employee evidently got indigestion or a nervous stomach and complained to the Wage and Hour Division. The division took the position that under its regulations, CFR Sect. 785.18, this must be a paid period because it was less than 20 minutes. Investigation revealed that employees left their machines and went to the lunchroom for 10 minutes (one even stated that he went home for lunch). When the bell rang, they all returned to their machines. The Wage and Hour Division demanded two years’ back pay (the maximum amount allowable under state statute) because employees worked 40 hours and 50 minutes per week under their interpretation. This amounted to over $12,000 for about 60 employees. The employer took the position that employees were serving their own interest for the 10-minute meal period, thus the break was not work time and therefore not compensable, refusing to pay. Wage and Hour threatened litigation.

CASE 5.2 Exempt or Nonexempt Fred Ball was an accountant in the finance department of the Little Italy Pasta Company and had been employed in that capacity for three years. Fred held a B.S.B. from Midwest State University and was enrolled in a Master of Accountancy program in a “weekend college” program at City University. Fred was paid $25 an hour for a 40-hour week. All company accountants were paid on an hourly basis, although the chief accountant was paid a monthly salary. Fred was also paid a premium of $50 a week for any new account that he was assigned. This premium was only paid for the first three months that he handled the new account because of the additional work required to set up and regularize these accounts. Fred had no set hours and worked his own schedule. He was allowed to work flexible hours, Monday through Saturday and was not required to submit a time card. No one was allowed to work on Sundays without the express permission of the plant owner and manager. Fred was classified as an exempt employee for overtime purposes.

Case 53 Forced Vacation Jack Franklin is an exempt employee working as a systems analyst for the McGuffey Company, a human resources services firm. Jack continually works more than 80 hours in a two-week period. However, due to some graduate classes he is taking, Jack works only 4 hours during the day every other Friday. Because Jack has worked less than 8 hours in a given day, the employer forces him to take 4 hours of vacation for each of the days that he worked less than 8 hours during a single day. The issue from the employee’s perspective is that he should not have to use vacation when taking a couple of hours off during the day. This is particularly true when the time off is to further his education. The employee is clearly an exempt employee in a professional role and puts in more than enough time working. Jack believes he should be paid for a full day’s work for working less than 8 hours in a day. The employer’s argument is that there is a department policy stating that every employee must work a minimum of 8 hours during the day. This is an informal policy that is normally adhered to only when needed to please the controller of the company. Additionally, the company handbook states an employee will not be docked pay as long as he or she works a minimum of 4 hours in a day.