Fair Labor Standards Act - Ohio Township Association with the... · Fair Labor Standards Act - January 28 & 30, 2014 Fishel Hass Kim Albrecht LLP (614) 221-1216 - Telephone 400 S

FISHEL HASS KIM ALBRECHT LLP | 400 S. FIFTH STREET, SUITE 200

COLUMBUS, OHIO 43215 | P (614) 221-1216 | F (614) 221-8769

Fair Labor Standards Act

Leaders in Employment Law and Beyond

ATTORNEYS AT LAW

MARC A. FISHEL PARTNER

[email protected]

PRESENTED TO: OHIO TOWNSHIP ASSOCIATION

JANUARY 28 & 30, 2014

FISHELHASS.COM

Fair Labor Standards Act - January 28 & 30, 2014

Fishel Hass Kim Albrecht LLP (614) 221-1216 - Telephone

400 S. Fifth Street, Suite 200 i (614) 221-8769 - Facsimile

Columbus, Ohio 43215 www.fishelhass.com

Fishel Hass Kim Albrecht LLP (“FHKA”) is a mid-sized Columbus, Ohio, based

law firm. FHKA’s purpose is to provide high-quality, affordable legal services to public and

private sector clients. Today, FHKA represents well over two hundred public sector clients

throughout the State of Ohio. We represent municipalities, boards, commissions, agencies, and

office-holders in over sixty-five of Ohio’s eighty-eight counties. Our client base varies from large

metropolitan cities to villages, and from rural areas to the suburbs along with large and small

counties. Additionally, the firm provides services that promote the development of systems and

human resource management in the private sector. Our strength and continuous growth is

reflected in our ability to remain on the cutting edge of our traditional areas of practice, while

expanding our services to encompass the ever-changing areas of the law impacting our clients.

FHKA began with a pro-management philosophy; that same philosophy has carried

forward to the present. The firm’s strength and diversity stems from, and is maintained by, the

strength and diversity of our staff. Our attorneys hail from a wide variety of backgrounds, from

rural farm communities to large cities. Our perspectives and ideology are similarly varied. This

diversity is perhaps best reflected in FHKA’s community involvement.

Our attorneys serve leadership roles in, and are active members of, their churches and

temples. They volunteer in a wide variety of community activities including public and private

school programs, Children’s Hospital, assisted living communities, numerous youth activities,

humane societies, museums, art galleries, and community centers. This diversity allows us to

successfully interact with a wide range of individuals as well as to analyze and address legal

issues and problems from many perspectives.

FHKA was recognized as one of the 2014 U.S. News-Best Lawyers®

in areas of

Employment Law-Management, Labor Law-Management and Litigation-Labor & Employment.

Additionally, several attorneys in the firm have been recognized by their peers as Super Lawyers®

and Best Lawyers® for their outstanding work in areas of Employment and

Labor Law and Litigation.

Firm Profile



400 S. Fifth Street, Suite 200 ii (614) 221-8769 - Facsimile


Marc A. Fishel is a partner in the law firm of Fishel

Hass Kim Albrecht LLP. He received his J.D. from Ohio

State University and a Bachelor of Arts degree in political

science from Cleveland State University. Mr. Fishel

regularly represents public employers throughout the State

of Ohio in all matters relating to labor relations. Marc has

extensive experience in areas of representation including collective bargaining matters,

disciplinary matters (arbitration and civil service), contract negotiations, mediation, and conflict

resolution procedures. Mr. Fishel also represents employers in state and federal courts in

employment related litigation. Mr. Fishel is a former member of the Board of Directors of the

Ohio Public Employers Labor Relations Association and has served as an adjunct professor of

employment law at Wittenberg University. He is a frequent speaker and lecturer on numerous

issues relating to employment law. Marc has been named to the 2015 U.S. News list of Best

Lawyers® and also named to the 2015 Ohio Super Lawyers, recognized for his outstanding work

in the areas of Labor and Employment Law and Litigation.



400 S. Fifth Street, Suite 200 iii (614) 221-8769 - Facsimile


TABLE OF CONTENTS

PAGE NO

I. OVERTIME REQUIREMENTS OF THE FAIR LABOR STANDARDS ACT. .........1

II. NON-COVERED and EXEMPT EMPLOYEES ..........................................................1

III. REGULAR RATE OF PAY ........................................................................................12

IV. HOURS WORKED .....................................................................................................15

V. THE WORK PERIOD .................................................................................................19

VI. COMPENSATORY TIME ..........................................................................................20

VII. PENALTIES ................................................................................................................21



400 S. Fifth Street, Suite 200 1 (614) 221-8769 - Facsimile


I. OVERTIME REQUIREMENTS OF THE FAIR LABOR STANDARDS ACT

A. Generally, for non-safety employees, the Act requires that employees be compensated at one

and one-half times their regular rate of pay for any hours worked over 40 hours in a

designated seven-day workweek.

B. For safety employees, agency can use work period of between seven and 28 days, with a ratio

or corresponding hours equivalent to 53 hours per seven days (for fire) and 43 hours per

seven days (for police).

C. Hours worked in excess of 40 in a seven -day workweek (or in excess of maximum hours in

the alternative work period selected, for public safety employees) must be compensated at the

time and one-half rate. For public employees, this may be in cash or in compensatory time

off (“comp time”), up to a maximum of 240 hours of compensatory time (or 480 hours for

safety employees).

II. NON-COVERED and EXEMPT EMPLOYEES

A. NON-COVERED EMPLOYEES (Not covered by any portion of the FLSA).

1. Independent contractors:

a. Label does not control.

b. Definition: One who follows usual course of employee, dependent on business which

he/she serves, is not an independent contractor.

c. Economic reality test (court test):

i. Degree of control exerted by alleged employer over worker.

ii. Opportunity of worker for profit or loss.

iii. Investment of worker in the business.

iv. Permanence of the working relationship.

v. Degree of skill required to perform the work.

d. Department of Labor (DOL) factors:

i. Extent services rendered are integral part of employer’s business.

ii. Permanency of the relationship.

iii. Amount of individual investment in facilities and equipment.

iv. Opportunities for profit / loss.

v. Degree of initiative, judgment or foresight required of person performing services.





2. Trainees:

a. Must receive no wages, and

b. Meet all five tests:

i. Training must be similar to that at vocational school.

ii. Training must be for benefit of trainees.

iii. Training must not displace regular employees, but work under their close

supervision.

iv. No immediate advantage to employer operations and may actually be an

impediment.

v. Trainees not necessarily entitled to job at end of training.

c. If “trainee” actually hired, then trained, he/she is an employee under Act.

d. If employer requires continuing education to maintain job, time will be counted as

hours worked.

3. Volunteers:

a. Introduction: The Fair Labor Standards Act (FLSA) regulates the payment of wages

for those workers who are covered by the Act. Thus, non-covered workers and

exempt employees are not subject to the FLSA’s minimum wage and overtime

provisions. One group of workers considered not to be covered is bona fide

volunteers. Some of the issues that arise in determining whether a worker is a bona

fide volunteer are:

i. Have the individuals actually volunteered.

ii. Are they volunteering to perform essentially the same services for which they are

also being paid a salary or wages.

iii. Are they volunteering for the same public agency.

iv. Is there a mutual aid agreement between the agencies.

v. Do they receive compensation or benefits for their service.





b. Who is a Volunteer: In 1985 Congress enacted legislation to further clarify the issue

of compensation for so-called “volunteers.” The Amendment to the FLSA (29 U.S.C.

§203(e)(4)(a)) reads as follows:

The term “employee” does not include any individual who volunteers to

perform services for a public agency which is a state, a political

subdivision of a state, or an interstate governmental agency, if:

i. The individual receives no compensation or is paid expenses, reasonable benefits,

or a nominal fee to perform the services for which the individual volunteered.

ii. Such services are not the same type of services which the individual is employed

to perform for such public agency.

A volunteer is generally defined as an individual who performs hours of service for a

public agency for civic, charitable or humanitarian reasons. Moreover, a volunteer

performs these services without promise, expectation or receipt of compensation for

services rendered. If these conditions are met, an individual will not be subject to the

FLSA (29 C.F.R. §553.10(a)).

As the 1985 Amendments state, an individual may not be a volunteer for a public

agency when the volunteer hours involve the same type of service which the

individual is employed to perform for the same agency.

c. Same Types of Services: As for defining the “same type of services,” the regulations

state that this means “similar or identical services” (29 C.F.R. §553.103(a)). In

considering this question, the wage and hour administrator will consider the duties

and other factors contained in the definitions in DOL’s “Dictionary of Occupational

Titles,” and will consider all the facts and circumstances of the case.

The DOL, in an effort to clarify the provisions, has provided examples of services that

are considered to be the “same type of services” and therefore would not qualify as a

“volunteer.” According to 29 C.F.R. §553.103(b)(c), the following employees would

not be considered volunteers:

i. A nurse employed by a state hospital who volunteers nursing services at a state

operated clinic (which is not a separate agency).

ii. A firefighter volunteers as a firefighter at the same public agency.





On the other hand, the following employees would not be considered to be

“volunteers” because the services provided would be considered the “same type of

services”:

i. A city police officer who volunteers as a part-time referee in a city basketball

league.

ii. An employee of the city parks department who serves as a volunteer city

firefighter.

iii. An office employee of a city hospital who volunteers to spend time with a

disabled or elderly person in the same institution during off duty hours.

In several Wage and Hour Opinion Letters, DOL emphasized that public employees

can volunteer for the same agency that employs them if the volunteer position is

substantially different from their paid work.

Administrative Letter Rulings have taken the position that correction officers

employed by a sheriff’s department may not volunteer as reserve deputies. According

to Daniel F. Sweeney, the Wage and Hour Division deputy assistant administrator, the

duties of the two positions are too similar. Administrator Sweeney’s position is that

“public safety employees taking any kind of security or safety function within the

same local government are never considered to be employed in a different capacity.”

However, he does point out that “civilian employees such as dispatchers, clerks,

secretaries, mechanics . . . . employed by the Sheriff’s Department could volunteer as

reserve or auxiliary deputies.”

d. Same Agency: Under DOL’s Regulations, whether two state or local agencies

constitute the same public agency must be determined on a case-by-case basis. One

of the factors that the DOL suggests that it will examine is whether the agencies are

treated separately for statistical purposes in the Census of Governments issued by the

Bureau of the Census, U.S. Department of Commerce (29 C.F.R. §553.102(b)).

A question was recently posed to the DOL in Columbus regarding whether two

agencies within the same county would be considered the same agency for FLSA

purposes. The DOL responded that an armed uniformed security officer with arrest

powers who was employed as a full time employee of a county agency and also

volunteered for the same county sheriff’s department to maintain her reserve deputy

status was considered to be working for the same agency. The DOL maintained that

the employee was not a volunteer and that the hours performed were hours worked

and would thus be eligible for compensation for those hours worked. However, the

DOL did point out that this employee would qualify for a Section 207(k) exemption.

e. Mutual Aid Agreements: It should be noted that DOL has provided a limited

exception to its rule that volunteers may not perform the same services for the same





employer. 29 C.F.R. §553.105 of the regulations explicitly permits volunteering

through “mutual aid agreements.” That regulation states:

Where town A and town B have entered into a mutual aid agreement

related to fire protection, a firefighter employed by town A who is also

a volunteer for town B will not have his or her hours of volunteer

service for town B counted as part of his or her hours of employment

with town A.

This rule may apply even if the volunteer services for town B are performed within

the geographic limits of town A; for example, units from neighboring towns respond

to a large blaze in town A. Note that nothing in the regulations limits the use of

mutual aid agreements exclusively to firefighters.

f. Compensation for Volunteering: In situations where volunteers receive some form of

compensation or benefits in return for their services, the may be considered covered

employees under the FLSA, and not bona fide volunteers. Courts have often resorted

to the economic reality test to determine whether the individual is a volunteer or an

employee subject to the FLSA. The Supreme Court in Tony and Susan Alamo

Foundation v. Secretary of Labor, 471 U.S. 290 (1985), used the “economic reality”

test to find that the volunteers in question were actually employees despite the fact the

“volunteers” themselves stated that they expected no payment for their services, did

not want to be paid, and that payment was against their religious beliefs. The Court,

however, found that the “volunteers” were completely dependent on the foundation

for food and lodging, that they could be fined for poor performance and that they

received benefits on a “commission” basis. Thus the Court considered these

individuals to be employees and not volunteers.

Volunteers may, however, be paid reasonable expenses, benefits and fees without

losing their status as volunteers (29 C.F.R. §553.106(a)). These expenses may

include a uniform allowance or cleaning expenses, out-of-pocket expenses for meals

and transportation, reimbursement for tuition, meals, and transportation costs

involved in their attending classes intended to teach them to better perform the

services they will provide as volunteers and insurance benefits (29 C.F.R.

§553.106(b), (c) and (d)).

Finally, it is worth noting that an individual’s protestation that he or she is a volunteer

is irrelevant to the determination of the person’s true status.

g. Conclusion: The legislative history of the 1985 FLSA amendments makes clear that

the Act was not intended to disrupt the traditional civic volunteerism of state and

local government employees. The purpose behind the DOL regulations was an

attempt to ensure that employees would not be coerced to “volunteer” time to their

employers for what would otherwise constitute compensable working time.





Failure to comply with the FLSA could result in any of the following:

i. Payment of liquidated damages (double back pay).

ii. Payment of attorney’s fees.

iii. Fines and jail terms for cases of willful violations.

4. Elected Official Exclusion: An individual who holds an elected office and who is not

covered by civil service law is not subject to the FLSA. Official is not covered even if he

or she is performing work outside his or her elected duties.

a. Personal staff exclusion.

i. Requirements:

Persons under the direct supervision of the selecting elected official.

Persons who have regular contact with selecting elected official.

Not subject to civil services laws.

ii. Common law considerations:

Hired at sole discretion of elected official.

Serves at pleasure of elected official.

Works exclusively for elected official.

Legally able to do all elected official can do.

B. EXEMPT EMPLOYEES (Covered by record-keeping requirements but not by minimum

wage and overtime requirements).

1. In order to qualify as an exempt employee, the employee must still be paid on a “salary

basis.”

a. Employees who are paid on a salary basis are paid the same amount per week for any

week in which they perform some work. They need not be paid every week, but the

salary cannot be reduced due to variations in the quality or quantity of the work

performed.

i. Exceptions (new for private sector employers).

Absence for part of a work week due to personal reasons, other than sickness

or disability (unless it’s unpaid FMLA leave).

Absence due to sickness or disability if the employer has a bona fide plan to

provide substitute wage replacement benefits.

Offset for amounts received as witness, jury duty or military pay (Ohio Law).

Penalties or suspensions imposed in good faith for violations of safety rules or

other workplace conduct rules.

Proportionate part of the employees’ full salary if they start or end

employment during a work week.





For public sector employers, the deduction is made pursuant to 29 C.F.R.

541.5d; permission for leave with pay was not sought or not granted, the

employee chose to use leave without pay, or available leave time was

exhausted.

ii. Effect of improper deductions.

Destroys the employee’s exempt status for the period in which the improper

deduction was made.

Destroys the exempt status for all other employees in the same classification.

Destroys the exempt status for all employees working under the manager who

authorized the improper deduction.

iii. Curing the improper deduction.

Have a policy that prohibits improper deductions and that has been clearly

communicated to employees.

Make immediate (i.e., the next paycheck) reimbursement.

Make a good faith effort to comply with law and your policy.

b. Remaining issues under the salary-basis test.

i. Window of Correction: When an employer inadvertently or incorrectly makes a

deduction prohibited by the salary-basis test, the employer may be able to avoid

liability if it reimburses the employee for the improper deductions and promises to

comply in the future. 29 C.F.R. §541.118(a)(6).

ii. Hourly vs. salaried pay: if pay appears to be calculated on an annual basis, or is

adjusted for extra work, this may be viewed as inconsistent with the salary-basis

test.

iii. Overtime pay for exempt employees: It is clear under Ohio law that a local

government can choose to grant overtime compensation, in comp time or cash, for

extra hours worked. But a number of courts have ruled that such extra

compensation is inconsistent with the salary-basis test, and may expose the

employer to full liability under the FLSA (e.g., time-and-a-half instead of hour-

for-hour pay, etc.).

iv. Requiring Exempt employees to keep detailed records of hours actually worked,

or to turn in time sheets, or to work a fixed schedule.

2. White collar exemptions; minimum salary is $455 per week.

a. Can be paid weekly, bi-weekly, semi-monthly or monthly.

i. The principle, main, major or most important duty that the employee performs.





ii. Factors to consider:

Relative importance of the exempt duties.

Amount of time spent performing exempt work (employees who spend more

than 50% of their time performing exempt work will generally be considered

exempt, but the regulations specifically DO NOT require that the employee

spend any specific percentage of time performing exempt duties).

Relative freedom from direct supervision.

Relationship between the employee’s salary and those paid to other employees

performing the same kind of work.

3. Executive positions:

a. Primary duty is management of the enterprise, or managing a customarily

recognized department or subdivision of the enterprise; AND

b. Customarily and regularly direct the work of at least two or more other full-time

employees or the equivalent; AND

c. Have the authority to hire or fire other employees, or have “particular weight” given

to his/her suggestions to hire, fire, advance, promote or any other change of status of

other employees.

i. Management of the enterprise includes ANY of the following:

Interviewing, selecting, training and evaluating employee performance.

Setting and adjusting employees’ rates of pay and hours of work.

Directing and planning the work of employees, including determining the

techniques used to accomplish the work.

Handling employee complaints and grievances.

Disciplining employees.

Apportioning work among employees.

Determining the type of materials, supplies, machinery to be used or

merchandise to be bought, stocked or sold.

Controlling the flow and distribution of materials or merchandise and

supplies.

Providing for the safety of the employees or the employer’s property.

ii. Department or subdivision means:

A discrete work group, not just a collection of subordinates.

A work unit with continuing status and a defined function.

E.g., an Auditors office may have several qualifying subdivisions, accounts

payable, accounts receivable, collections, property tax, etc.





iii. Customarily and regularly means.

Work that must be more than occasional, but may be less than consistent, e.g.

occurs either on a regular basis, weekly, monthly, etc, or with some frequency.

It cannot be an isolated or one-time event.

d. Who will qualify in local government?

i. Generally, all department heads (if two or more employees).

ii. In larger offices/departments, there may be other managerial/supervisor positions

which will qualify.

4. Administrative positions.

a. Performance of office or non-manual work related to the management or general

business operation of the employer or the employer’s customers; AND

b. Hold a position of responsibility with the employer.

i. Related to the management or general business operation means:

Areas such as tax, finance, accounting, auditing, insurance, quality control,

purchasing, procurement, advertising, marketing, research, safety and health,

personnel management, human resources, employee benefits, labor relations,

public relations, government relations, etc.

ii. Position of responsibility means:

Customarily and regularly perform work of substantial importance or

requiring a high level of skill or training.

Examples include; Formulating, interpreting or implementing management

policies; Providing consultation or expert advice to management; Making or

recommending changes to operating policies that have a significant impact on

general business operations or finance; Handling employee complaints,

arbitrating disputes or resolving grievances; Planning long or short term

business objectives.

Carry out major assignments in conducting the operation of the business.

c. Typical examples include:

i. Executive, administrative and confidential assistants, generally in larger agencies.

ii. Advisory specialists for management (e.g. tax, risk management, personnel

analysts).

iii. Heads of one-employee departments (e.g. personnel director, economic

development director, finance director).





5. Professional positions:

a. Performs office or non-manual work requiring knowledge of an advanced type in a

field of science or learning customarily acquired by a prolonged course of specialized

intellectual instruction, but which also may be acquired by alternative means such as

an equivalent combination of intellectual instruction and work experience

(“learned professional”) OR

b. Requiring invention, imagination, originality or talent in a recognized field of artistic

or creative endeavor.

i. Equivalent combination of intellectual instruction and work experience is not

really defined, best possibility is someone who has some college engineering

courses, for example and experience in the engineering field, whose duties are

primarily in the engineering field, but who is not a Registered Engineer.

c. The following are always exempt irrespective of tests:

i. Employee holding valid license to practice law or medicine, actually engaged in

such practice.

ii. Employee holding M.D. or D.O. degree for general practice of medicine in

residency or internship.

iii. Teacher in a school or educational institution.

6. Computer employee exemption:

a. Paid on either a salary or a fee basis of not less than $455.00 per week, OR not less

than $27.63 per hour; AND

b. Employed as a computer systems analyst, computer programmer, software engineer or

other similarly skilled worker in the computer field performing the following duties:

i. Application of systems analysis techniques and procedures, including consulting

with users to determine hardware, software or system functional specifications.

ii. The design, development, documentation, analysis, creation testing or

modification of computer systems or programs, including prototypes, based on

and related to user or system design specifications.

iii. The design, documentation, testing, creation or modification of computer

programs related to machine operating systems.





iv. A combination of the above duties, the performance of which requires the same

level of skills.

c. Does NOT include, trainees or employees in entry level positions learning to become

proficient in these areas or employees in computer occupations who have not attained

a level of skill or expertise that allows them to work generally without close

supervision.

d. Does NOT include employees engaged in the operation of computers or in the

manufacture and repair of computers.

e. Does NOT include employees whose work is highly dependent on, or facilitated by

the use of computers, but who are not engaged in systems analysis, programming, etc.

7. Exception for police, fire, EMS employees:

a. 29 C.F.R. §541.3 states that the exemption categories, particularly executive,

administrative and professional categories do not apply to police officers, detectives,

deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors,

correctional officers, parole or probation officers, park rangers, fire fighters,

paramedics, emergency medical technicians, ambulance personnel, rescue workers,

hazardous material workers and similar employees, regardless of rank or pay level;

as long as they perform work such as preventing, controlling or extinguishing fires of

any type; rescuing fire, crime or accident victims; preventing or detecting crimes;

conducting investigations or inspections for violations of law; performing

surveillance, pursuing, restraining and apprehending suspects; detaining or

supervising suspected and convicted criminals, including those on probation or

parole, interviewing witnesses; interrogating and fingerprinting suspects; preparing

investigative reports or other similar work.

b. The theory behind this exception is that these employees’ primary duty is never

management of the enterprise or of a recognized department or subdivision. The

example given is that an employee who investigates fires or crimes will not meet the

exemption criteria simply because he/she also directs the work of others in

investigating crimes or fires.

c. It is unclear what this means for a police chief or chief deputy or jail administrator,

whose role clearly is primarily administrative.





III. REGULAR RATE OF PAY

A. Definition: May be more than minimum wage, may not be less. All payments made by the

employer to or on behalf of the employee.

1. Exceptions to regular rate:

a. Holiday pay.

b. Reasonable uniform allowances.

c. Weekly overtime pay.

d. Absence pay for infrequent absences (vacation, illness, jury leave).

2. Included in regular rate:

a. On-call pay.

b. Salaries and salary increases.

c. Bonuses for accuracy of work, attendance etc.

B. Bonus Payments: Featsent v. City of Youngstown, 1995 FED App.0344P (6th Cir).

1. 29 U.S.C. §207(g): An employee’s regular rate of pay includes all remuneration for

employment paid to, or on behalf of, the employee.

Certain payments may be excluded from base rate of pay for purposes of computing

overtime based on character or nature. Issue is whether bonus payment is discretionary or

nondiscretionary.

2. Payments that may be excluded:

a. Gifts paid which are not dependent on hours worked.

b. Vacation, holiday, sick leave, production or efficiency; or expense reimbursement.

3. Discretionary bonuses.

a. A bonus is discretionary if:

i. Both the fact that payment is to be made and the amount of payment are

determined at the sole discretion of the employer at or near the end of the period





and not pursuant to any prior contract, agreement or promise causing the

employee to expect such payment regularly.

ii. The payments are made pursuant to a bona fide thrift or savings plan meeting the

requirements of the appropriate regulations.

iii. The payments are talent fees paid to performers, including announcers on radio

and television shows.

29 U.S.C. §207(e)(3).

b. Nondiscretionary bonuses:

i. Paid pursuant to contract, agreement or promise.

ii. Bonuses paid pursuant to a collective bargaining agreement.

iii. Bonuses paid pursuant to a promise made at the time of hiring.

iv. Bonuses that employer announces to employees to induce them to work more

rapidly, steadily or efficiently.

v. Attendance bonuses.

vi. Group production bonuses.

vii. Shift differential.

4. Contribution to trustee or third person per retirement plan, etc..

5. Extra compensation per premium rate for extra or overtime work.

6. Premium pay for Saturdays, Sundays, holidays or regular days off.

7. Contractual premium for work outside hours established by contract.

C. Computation of nondiscretionary bonuses:

1. Bonuses paid on weekly basis. Computed in hourly rate for the workweek.

2. Bonuses for periods more than work week. Once bonus is ascertained, it must be paid by

apportioning back over relevant period. Additional overtime compensation paid on this

amount for relevant period.





D. Longevity Pay.

May have prospective application included in computation of base rate of pay. May depend

on language in collective bargaining agreement.

E. Retroactive Pay.

29 C.F.R. § 778.313

Must be included in overtime calculation for the period it is paid.

F. Basic Rate of Pay.

29 U.S.C. § 207(g)(3)

Must be arrived at by agreement and be substantially equivalent to the average hourly

earnings of the employee exclusive of the premiums.

29 C.F.R. §548.2

The requirements of Section 7 of the Act with respect to the payment of overtime

compensation to an employee for a workweek longer than the applicable number of hours

established in Section 7(a) of the Act, will be met under the provisions of Section 7(g)(3) of

the Act by payments which satisfy all the following standards:

1. Overtime compensation computed in accordance with this part and Section 7(g)(3) of the

Act is paid pursuant to an agreement or understanding arrived at between the employer

and the employee or as a result of collective bargaining before performance of the work.

2. A rate is established by such agreement or understanding as the basic rate to be used in

computing overtime compensation thereunder.

3. The established basic rate is a specified rate or a rate which can be derived from the

application of a specified method of calculation.

4. The established basic rate is a bona fide rate and is not less than the minimum hourly rate

required by applicable law.

5. The basic rate so established is authorized by §548.3 or is authorized by the

Administrator under §548.4 as being substantially equivalent to the average hourly

earnings of the employee, exclusive of overtime premiums, in the particular work over a

representative period of time.

6. Overtime hours are compensated at a rate of not less than one and one-half times such

established basic rate.





7. The hours for which the employee is paid not less than one and one-half times such

established basic rate qualify as overtime hours under Section 7(e)(5), (6), or (7) of the

Act.

8. The number of hours for which the employee is paid not less than one and one-half times

such established basic rate equals or exceeds the number of hours worked by him in any

workweek in excess of the maximum workweek applicable to such employees under

Subsection 7(a) of the Act.

9. The employee’s average hourly earnings for the workweek exclusive of payments

described in paragraphs (1) through (7) of Section 7(e) of the Act are not less than the

minimum hourly rate required by this Act or other applicable law.

10. Extra overtime compensation is properly computed and paid on other forms of additional

pay which have not been considered in arriving at the basic rate but which are required to

be included in computing the regular rate.

IV. HOURS WORKED

A. General Definition: “All time during which an employee is necessarily required to be on the

employer’s premises on duty or at a prescribed work place.”

Remember: “employ” means to “suffer or permit to work.”

B. Exclusions from “Hours Worked.”

1. Paid leave time.

a. FLSA does not count for purposes of calculating overtime:

i. Sick leave.

ii. Holiday leave.

iii. Vacation leave.

iv. Jury duty.

v. Other similar paid leaves.

b. Employers may count one or more of these as “hours worked,” but FLSA does not

require.

2. Compensatory time off (“Comp time”) actually used in a work week does not count as

“hours worked.”

3. De Minimis Rule: Employer need not pay for de minimis work time. The DOL has said

that 10 minutes is not de minimis. However, court cases have held that 10 minutes is de

minimus.





C. “Volunteered” Work Time.

1. Emergency situations:

a. If while off duty, employee performs duties of his or her or a similar position, time

put in is “hours worked” for overtime purposes.

2. Non-emergency situations:

a. If an employee arrives early or stays late, time counts as “hours worked” for overtime.

i. Make sure all employees know that they cannot arrive early or stay late without

prior written authorization from supervisor.

ii. On work logs, record actual starting/stopping times, and have employees sign.

b. Lunch Periods: if the employee stays at desk and performs even occasional work, e.g.

answering the phone, time counts as hours worked.

D. Travel Time.

1. Using patrol cars:

a. An officer who takes a patrol car home and uses it for travel to and from work is not

entitled to pay for commuting time, even if they are required to keep the radio on to

respond to emergencies if:

i. Driving the employer’s vehicle between home and work is strictly voluntary.

ii. Vehicle is a type normally used for commuting.

iii. Employee incurs no cost for driving vehicle home and parking.

iv. Work sites are w/in normal commuting area.

See Aiken v. City of Memphis, 1999 U.S. App. Lexis 21268 (6th

Cir. September 7, 1999).

b. Once an emergency call is received, however, the response time is “hours worked.”

i. For example, if the police officer is ordered to respond to a call during his

commute, the time spent responding to the call will be compensable as it furthers

the principal activity of the police department.

ii. However, if the police officer is only required to leave the police radio on in the

car during the commute, the police officer does not have to be compensated for

his commute time.





iii. The monitoring of a police radio is de minimis, thus, exempting such activity from

being compensable.

2. To and from work:

a. To determine whether travel time is compensable under the FLSA, one needs to look

at whether or not the travel time is for the benefit of the employer.

i. As a general rule, the time an employee spends commuting to and from work is

not compensable. 29 C.F.R. § 785.35.

ii. Any “walking, riding or traveling to and from the actual place of performance of

the principal activity or activities which the employee is employed to perform” is

also not compensable. 29 U.S.C. § 254(a).

iii. Once an employee’s travel furthers the principal activity of the employer’s

business, the travel time becomes compensable.

b. Generally, employees compensated for all travel unless overnight outside regular

working hours on a common carrier where no work is done.

c. To and from work not compensable unless performing work for employer en route.

3. Travel on business or to training.

DOL’s regulations provide that the travel time is compensable work time when it occurs

during the employee’s regular working hours. 29 C.F.R. § 785.39. This is true regardless

of whether the employee is working since the employee is simply substituting travel for

other work duties. Id. Moreover, if the travel occurs on non-working days, such as a

weekend, the time is compensable if it occurs during the employee’s regular hours of

work. Id.

a. The first example that best illustrates this is attending conferences in another city when

the employee travels to the conference and back again in the same day. If the

conference is a one-day conference and the program starts at 9:00 AM and ends at 4:00

PM, all seven hours are compensable. If the employee must leave at 7:00 AM to be on

time for the start of the program and will not return home until 6:00 PM, then the

additional four hours is also compensable. This would be considered a “special one-

day assignment” and all time would be compensable except that you may deduct time

for regular meal periods if there is no program occurring at that time. If the employee

does not drive, but takes other transportation, e.g., train or bus, you may also deduct

the time it takes the employee to travel between his/her home and the bus or train

depot. 29 C.F.R. §785.37.





b. The second example is travel to a conference or seminar in another city when the

employee must travel on a day he/she is not normally scheduled to work in order to be

at the conference site for the start of the program. If the employee must travel on

Sunday, for example between 2:00 PM and 8:00 PM and the employee’s normal hours

of work are 8:00 AM to 5:00 PM, the hours between 2:00 and 5:00 PM must be

considered hours worked, even though the employee is traveling on a day he/she is not

scheduled to work.

c. However, DOL does not consider overnight travel that occurs outside of regular

working hours as a passenger on an airplane, train, boat, bus, or car to be compensable.

29 C.F.R. §785.39. Therefore, in the above example, the hours between 5:00 and 8:00

PM would not be considered hours worked. Also, as in the first example, time spent

traveling from home to the airport, bus or train station and meal periods may be

deducted.

d. Employees who are required to work while traveling must be compensated. 29 C.F.R.

§ 785.41. An employee who is required to ride with another employee as an assistant

or helper is working while riding, except during bonafide meal periods or when he is

permitted to sleep in adequate facilities furnished by the employer. Id.

e. Remember that travel time does not automatically result in overtime payments to non-

exempt employees. You have the option of adjusting the employee’s weekly work

schedule to offset any additional compensable time occasioned by the employee’s

travel on your behalf.

E. Training Pay:

1. Generally, if the employee is required to spend time in training programs, lectures, labor-

management committee meetings and safety meetings, it is compensable.

2. For the activity not to be counted as working time, the following four general principles

must be met:

a. Attendance must occur outside the employee’s regular working hours.

b. Attendance must in fact be voluntary.

c. The employee must do no productive work while attending.

d. The program lecture or meeting should not be directly related to the employee’s job.

29 C.F.R. §785.27.

3. It is directly related to the employee’s job if it aids the employee in handling his or her

present job better, as distinguished from teaching the employee another job or a new or

additional job skill. See Merrill v. Exxon Corp., 387 F.Supp. 458 (S.D. Tex. 1974).





It is important not to confuse the concept of training time with trainees, who are exempt

from the FLSA if they meet the DOL’s Standards.

F. Uniforms: Time spent picking up and being fitted for uniforms is not compensable hours

worked.

G. Court Time: Time spent testifying in court as part of the employee’s official duties is

compensable hours worked.

H. On-Call Time:

1. Must compensate if:

a. Time is spent predominantly for the employer’s benefit §201

b. Determined on a case-by case basis. Factors to consider:

i. Terms of employment agreement.

ii. Physical restrictions placed on employee.

iii. Time allowed between call and time required to be at work.

iv. Percentage of call to be returned by on-call employee.

v. Frequency of actual calls during on-call.

vi. Uses of on-call time by employee.

2. Disciplinary action if employee does not respond.

V. THE WORK PERIOD

A. Safety Employees.

1. Definition: Any established and regularly recurring period of work not less than seven

and not more than twenty-eight consecutive days. Need not coincide with pay period.

2. 29 U.S.C. §213(b)(20): Exemption from overtime if law enforcement agency employs

fewer than five employees during the workweek.

a. Must count employees on leave.

b. May be eligible for exemption in one work week but not in the next.

3. 207(k) partial exemption:

a. Must be a public employer (not quasi-public).

b. Work period between seven and 28 days.





c. Overtime based on proration of 171 hours per 28 days for law enforcement, and 2/2

hours and 28 days for fire safety.

d. When calculating overtime, employer should look to employee’s work period.

i. State and local government must declare work period. Notation on payroll

indicating length of period and starting time. Should indicate that schedule is

adopted pursuant to 207k.

e. If employer does not declare a work period, overtime pay will be based on usual 40

hour week.

VI. COMPENSATORY TIME

A. Use of Compensatory Time Off (“Comp Time”).

1. Comp time may only be used, instead of cash, if there is a prior agreement or

understanding to this effect between employer and employee. Satisfied if there is:

a. Collective bargaining agreement so providing.

b. Notice to employees, such as written policy distributed to employees. employees then

bound if:

i. They fail to object, or

ii. Accept comp time instead of cash.

c. Employees must receive notice of comp time policy before overtime worked.

2. Use of compensatory time by employee:

a. Generally, employees must be permitted to use compensatory time as requested,

unless the request creates an undue burden on the employer. The DOL has taken the

position that merely having to pay overtime to another employee is not an “undue

burden.”

b. Mortensen v. Sacremento County, 368 F.3d 1082 (9th Cir. 2004) and Scott v. City of

New York, 2004 U.S. Dist LEXIS 11543 (S.D. N.Y. 2004), have ruled otherwise;

stating that the employer is not required to allow the employee to use compensatory

time on the exact date requested if the use of compensatory time would result in

another employee earning overtime. The courts reasoned that §207(o)(5) allows the

employer to schedule the compensatory time “within a reasonable time” of the date

requested and that to require the employer to grant each employee’s request would

“eviscerate the flexibility contemplated by §207(o)(5).”





B. Use of 480 Hours Comp Time Ceiling. Only for public safety, emergency response or

seasonal employees.

1. “Public safety activities.”

a. Includes law enforcement, fire fighting, and related activities, as defined in

regulations.

b. Work must “regularly involve” these activities.

2. Emergency response activities.

a. Rescue work and ambulance service.

b. Work must regularly involve these activities.

3. Seasonal activities.

a. Includes “work during periods of significantly increased demand, which are of a

regular and recurring nature.”

i. DOL will look to whether the projected, increased load is likely to generate more

than 240 hours in comp time.

ii. NOT limited to seasonal activity due to changes in weather.

iii. Mere short-but intense periods do not make work “seasonal.” But if road crews,

for example, have a “significant period of peak demand,” may qualify for higher

cap.

iv. Facilities open for specific, limited seasons are usually “seasonal.”

VII. PENALTIES

A. Enforcement.

1. The FLSA is enforced by the Wage and Hour Administration of the U.S. Department of

Labor.

a. DOL can institute a compliance audit at any time, with or without a complaint.

b. DOL, an employee, or a union can bring suit to enforce the provisions of the FLSA in

federal court.





2. Beware of vengeful employees and unions! It is very easy for a disgruntled worker or a

union desiring to bring pressure to bear on an employer to file a complaint with the DOL,

triggering an audit that will go far beyond that employee’s circumstances.

B. Penalties.

1. Employees may recover the back pay for overtime worked but not paid, at the time-and-

one-half rate if applicable.

2. In addition, the court may assess a “liquidated damages” penalty doubling the amount of

the award, in effect “triple pay” if the premium rate applies.

3. The statute of limitations is two years, or three years for “willful violations. The standard

for willful violations is an easy one: the court need only find that the employer “knew

that the FLSA was in the picture,” i.e., that the Act might apply. In an overwhelming

majority of cases, the violation is found to be “willful.”

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