Are Missed Meals Costing You Millions?

1 August, 2019

Most organizations don’t really worry about Meal Periods except to make sure if it is missed it is paid. No one wants burnout or Department of Labor (DOL) issues. Management assumes their timekeeping system manages meals, either through an automatic deduct the employee or manager can then override or an employee not clocking if they miss the meal period. It should be simple. It is not. Careful analysis of what we will call ‘Missed Meal” or MM often reveals significant abuse, system problems, management issues, and the opportunity for saving significant labor costs.

What are some common issues found when a transactional level analysis is done looking at the occurrences of employees “Missing Meals?"

  • There is often a clear pattern of occurrences for the same employees and the same departments which are often day shift and non-clinical. Savings of addressing only 40% of this can range from $175,000 to $1.5M or more a year, based on the size of the organization, without factoring in the overtime impact for those same employees. It is recognized that there will always be MM in the healthcare environment.
  • When organizations use rounding rules instead of actual clocked time, there is often a clear pattern of employees who get a paid meal by a difference of minutes based on the rounding rules.
  • Although organizations pay millions for Time & Attendance (ATK) Systems and Payroll Systems, there is often no earnings code for MM so it appears as regular time in payroll and there is no way to pull data from the payroll system on MM-either where or when it is occurring. Thus, there is no way to provide management with meaningful reports for their knowledge or action.
  • The same is true for ATK systems. Most ATK systems are set up to capture a paid meal or cancel a meal auto deduct but very few organizations use them. Most managers have no idea how often employees are either not clocking for meal time or self- cancelling in the ATK system when the meal time is set up as an auto-deduct unless it is overridden.
  • Position/Grade payrules define who is eligible for a paid meal if the time is missed. Often, maintaining the integrity of the payrules is not a focus with respect to paid meal eligibility and, as a result, you will see things such as: Exempt employees and per diems who work only 4-5 hours in a shift receiving a paid meal.
What can your organization do to Identify potential issues and savings opportunities in the area of missed meals?
  1. Establish a pay code in ATK and payroll systems so missed meal data can be easily captured for management and leadership reports that are timely. Remember, you should never not pay a missed meal-but rather be informed about missed meals that should not be happening.
  2. Ensure there is a clear policy addressing meal periods and the employee’s responsibility if there is going to be a missed meal. Require supervisory or management approval first unless situation is emergent. The policy should also address corrective action steps for violating policy.
  3. Consider having employee’s clock for meals so actual time is captured. This is considered best practice and is preferred by the DOL. If auto deduct for lunch is the organization’s preference, require approval from the manager prior to employee or the timekeeper cancelling the auto-deduct and be very careful about the time into the shift that the deduct occurs and how that might be impacted by shift differential practice or not working a full shift.
  4. Provide supervisors and managers with missed meal reports on a PP basis and hold them accountable for ensuring all missed meals are necessary. In one hospital, nursing was union and the contract provided 2x pay for a missed lunch. No nurses in that hospital had a missed lunch for the 12 months analysis that was done. Management can be effective if given the right information and held accountable.
  5. Hospital and system leadership should receive a quarterly report on high outliers of missed lunch and the cost of same.
  6. Human Resources and Payroll should be held accountable to ensure no ineligible employees are being paid lunch and pay rules are accurate. This can easily be done once the pay code is established in ATK and Payroll.
An example of actual results in one healthcare system showed an opportunity of $4.4 million annually without factoring in premium pay or overtime costs resulting from missed lunches and assuming 40% of all missed meals would continue.

This is a real area of opportunity to realize significant labor savings with no “take away” from employees (i.e. no pay or benefit changes).
  • Be clear on the policy
  • Set the system up right
  • Give management the tools