TimeStation supports multiple shifts per day, typically your employees would Punch Out before lunch/breaks and Punch In when they come back.
If you'd like to keep track of the breaks your employees take, you can setup a new department called "Break". Then assign employees to this departments using the "Members" button in the departments screen.
When employees want to go on break, they would "transfer" into the break department and when they come back, they transfer back to their regular department. This would allow you to track the exact time spent on breaks.
Automatic Time Deductions
If you'd like TimeStation to automatically deduct a lunch break, you can enable automated lunch deductions as per these instructions.