A Malvern company that publishes newsletters on business topics, including one titled "Keeping Up to Date on Payroll," will face a bill of an estimated $1.75 million to pay 6,000 employees docked for bathroom and other short breaks.
"No worker should have to face the choice: Do I take a bathroom break, or do I get paid?" said Adam Welsh, a senior trial attorney at the U.S. Department of Labor's Philadelphia office.
"I think it's the rare employer who doesn't allow its employees to go to the bathroom," Welsh said.
U.S. District Judge L. Felipe Restrepo has given the Labor Department and the company, American Future Systems Inc., which does business as Progressive Business Publications, until Thursday to submit their proposals for how to manage the payment process, including the final tab.
An attorney for the company, Sarah Bouchard, declined to comment.
The tab will include back pay and liquidated damages to 6,000 people who worked in 14 offices in Pennsylvania, New Jersey, and Ohio from July 2009 to July 2013.
"They haven't come into compliance yet, so damages will grow," Welsh said.
On Nov. 1, 2012, the Labor Department filed a lawsuit, saying the company violated the U.S. Fair Labor Standards Act because employees weren't earning the minimum wage of $7.25 per hour due to the company's policy of requiring workers to clock out while they were going to the bathroom or grabbing coffee or a smoke.
The Fair Labor Standards Act does not require companies to give workers short personal breaks - under 20 minutes. But if employers offer those breaks, they have to pay workers for them.
Her telemarketing job "was stressful and tiring," said former employee Regina Asbury, who worked at the company's Uniontown office from June 2010 to July 2013.
"If I experienced a hostile or unpleasant call, I would sometimes take a break so I could continue to maintain a professional and energetic tone," she said in an affidavit, adding that breaks were unpaid.
Company president Edward Satell, also named in the lawsuit, founded the company in 1959, he says in a video on its website. It now has 700 employees in 14 locations and believes in the importance of philanthropy, he says.
Many of its employees are telemarketers who offer free subscriptions to the company's 20 newsletters. After the first few issues, subscribers are billed unless they cancel their subscriptions. Employees receive an hourly rate and a bonus based on sales.
In July 2009, the company issued a written policy saying that workers could take "personal breaks at any time for any reason," but that those breaks would not be paid.
The company had argued that federal law did not require it to pay employees for short breaks because the employees were completely relieved from duty and could do what they wanted during break time.
In his Dec. 16 decision, the judge disagreed, citing Labor Department regulations and pronouncements promoting the value of short breaks and the necessity that they be paid.
"These are minimum-wage employees," said Ivette Vigano, assistant director of the Labor Department's Wage and Hour Division office in Philadelphia.
"It's a very high turnover because of that," Vigano said, describing them as vulnerable workers. "Most of them aren't kids. They are mature adults. For them not to be able to take a brief break to relieve themselves, to speak bluntly, it's very sad."