The Fair Labor Standards Act

 

I - Historical Background

 

The Fair Labor Standards Act of 1938 (FLSA) is the federal law that regulates the wages and hours worked by employees engaged in interstate commerce.  Initially, the FLSA applied only to private employers.  In 1966, the Act was amended to include school, hospital, nursing home and local transit employees.  The inclusion of these public employees was held to be constitutional by the Supreme Court in Maryland v. Wirtz.[1]  The Act was again amended in 1974 to include most state and local government employees. 

 

However, in 1976 the Supreme Court held that this expanded coverage violated the Tenth Amendment to the Constitution in National League of Cities v. Usery.[2]  In the National League of Cities case, the court held that only non-traditional or so-called proprietary functions of state and local governments could be regulated under the FLSA.  Therefore, traditional, functions of government, such as law enforcement, fire protection, sewer and water works, etc. could not be regulated under the FLSA under the Supreme Court’s ruling. 

 

For that reason, employees in those traditional governmental functions were considered to be beyond the reach of the minimum wage and overtime requirements of the FLSA from 1976 when National League of Cities was decided until early in 1985.  In February, 1985, the Supreme Court reversed itself and overruled National League of Cities in the case of Garcia v. San Antonio Metropolitan Transit Authority.[3]  In the Garcia case, the court rescinded the distinction between traditional and non-traditional governmental functions as an unworkable standard.  The court concluded that the Fair Labor Standards Act must be applied to all governmental functions which are performed by employees within the scope of the Act.

 

            FUTURE TRENDS

 

It is possible that the U.S. Supreme Court will reverse its 1985 Garcia decision and rule that the Fair Labor Standards Act no longer applies to state and local governments.  When Justice Rhemquist authored a vigorous dissent in Garcia, he predicted that once the makeup of the Supreme Court changed, the decision would be reversed.  Now that he is Chief Justice and those that formed the Garcia majority have retired, his prediction appears ready to come true.

 

The Supreme Court, in 1999, decided the case of Alden v. State of Maine, to ruling that the 11th Amendment’s prohibition against a state being sued in Federal Court against its will preclude enforcement of the FLSA against a state by its employees without the state’s consent. 

 

A recently accepted case involving Harris County Texas could also serve as the vehicle for overturning Garcia (which also came from Texas).  The issue in the Harris case is whether forcing employees to use compensatory time violates the FLSA.

 

Certainly departments defending FLSA cases at this time should hold off trying or settling them until the Supreme Court rules, probably some time next year.

 

NOTE:  The enforceability by individual employees of other Federal laws, such as the Age Discrimination in Employment Act (ADEA) and even Title VII of the Civil Rights Act, may be in doubt.  The Supreme Court has recently accepted a case involving Florida State University.  There the court may rule that certain Federal statutes enacted pursuant to the Interstate Commerce Clause may not be enforceable by private employees in Federal or state courts.

 

            PROVISIONS OF THE FLSA

 

            Employees Covered

 

The FLSA provides that certain employees do not come within the coverage of the Act.  Few of these exceptions involve employees of state and local governments.  If a worker is not covered by the FLSA, the provisions of the Act do not apply to the employee, though the employer must, of course, still comply with state wage and hour laws.

 

The Act does not apply to police departments during any week in which less than five full or part-time employees are on the payroll. 

 

Bona fide volunteers, motivated by charitable or civil concerns, are not considered employees under the Act.  However, sham volunteers, or employees who are coerced to perform duties, will not qualify for exemption and will be considered employees.  Furthermore, the law puts an affirmative duty upon employers to ensure that employees do not take it upon themselves to perform work for an employer’s benefit.  An employer will be considered to have employed the worker whenever the employer permits the individual to work or “suffers” the work of the employee.

 

            Minimum Wage

 

Each employee covered by the FLSA must be paid at least the applicable minimum wage.  This minimum wage compensation applies regardless of whether the employee is paid on an hourly or salary basis.  Because most police in this state are paid an amount far greater than the minimum wage, this provision will probably not create serious difficulty for local police departments.  However, where salaried employees occasionally work more than their usual number of hours, care must be taken to ensure that the average hourly rate in a given week or work period does not drop below the minimum wage.

 

            REGULAR RATE OF PAY

 

Section 7(a) of the Fair Labor Standards Act (FLSA) requires that covered, non-exempt employees must be paid overtime pay at a rate not less than one and one-half times their regular rates of pay for all hours worked in excess of 40 hours in a work week (unless an employer makes a 7(k) election for police or fire personnel).[4]  Section 7(e) mandates inclusion in the regular rate of “all remuneration for employment paid to, or on behalf of, the employee” except the following payments which are specifically excluded.[5]

 

(7)                                       Sums paid as gifts; payments in the nature of gifts made at Christmas time or on other special occasions, as a reward for service, the amounts of which are not measured by or dependent on hours worked, production, or efficiency;

 

(8)                                       Payments made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause; reasonable payments for traveling expenses, or other expenses, incurred by an employee in the furtherance of his or her employer’s interests and properly reimbursable by the employer; and other similar payments to an employee which are not made as compensation for his or her hours of employment;

 

(9)                                       Sums paid in recognition of services performed during a given period if either, (a) both the fact that payment is to be made and the amount of the 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 payments regularly; or (b) the payments are made pursuant to a bona fide profit-sharing plan or trust or bona fide thrift or savings plan, meeting the requirements of the Secretary of Labor set forth in appropriate regulations which he is required to issue, having due regard among other relevant factors, to the extent to which the amounts paid to the employee are determined without regard to hours of work, production, or efficiency; or (c) the payments are talent fees (as such talent fees are defined and delimited by regulations of the Secretary) paid to performers, including announcers, on radio and television programs;

 

(4)                                       Contributions irrevocably made by an employer to a trustee or third person pursuant to a bona fide plan for providing old-age, retire­ment, life, accident, or health insurance or similar benefits for em­ployees;

 

(5)                                       Extra compensation provided by a premium rate paid for cer­tain hours worked by the employee in any day or workweek because such hours are hours worked in excess of eight in a day or in excess of the maximum workweek applicable to such employee, under subsec­tion (a) or in excess of the employee’s normal working hours or regu­lar working hours, as the case may be;

 

(6)                                       Extra compensation provided by a premium rate paid for work by the employee on Saturdays, Sundays, holidays, or regular days of rest, or on the sixth or seventh day of the workweek, where such pre­mium rate is not less than one and one-half times the rate established in good faith for like work performed in non-overtime hours on other days;

 

(7)                                       Extra compensation provided by a premium rate paid to the employee, in pursuance of an applicable employment contract or col­lective bargaining agreement, for work outside of the hours established in good faith by the contract or agreement as the basic, normal, or regular workday (not exceeding eight hours) or workweek (not exceed­ing the maximum workweek applicable to such employee under sub­section (a)), where such premium rate is not less than one and one-half times the rate established in good faith by the contract or agree­ment for like work performed during such workday or workweek.

 

In order to calculate an officer’s regular rate of pay, Section 7(e) of the FLSA specifies that it is necessary to take into account “all remuneration for employment paid to, or on behalf of the employee”.  According to a Letter Ruling issued by the Wage and Hour Division of the U.S. Department of Labor, both a cost of living allowance (COLA) and a shift differential applicable to certain employees under a collective bargaining agreement must be included in calculating an employee’s regular rate of pay.[6]

 

Other items that must be included are:

·        educational incentive (but not reimbursement) payments[7];

·        longevity pay[8];

·        hazardous duty pay[9];

·        working out of grade pay[10]; and

·        specialty pay[11].

             

            Overtime Provisions

 

A covered employee who is not “exempt”, and who works in excess of forty hours per week (or other overtime threshold), is entitled to overtime compensation at the rate of one and one-half times the employee’s regular rate of pay. 

 

            Exempt Employees

 

An exempt employee is an employee who satisfies one of two tests:  (1) under the “short” test, an employee is exempt if the employee makes a salary of at least $250.00 per week, has as his or her primary duty the management of the enterprise or a discreet unit thereof, and regularly supervises two or more employees; (2) under the “long” test, an employee is exempt if he or she receives a salary of at least $155.00 per week, has management as a primary duty, supervises two or more employees on a regular basis, is involved in the selection, ­discharge or promotion of other employees, and customarily and regularly exercises discretionary powers and performs  all of these functions at least eighty percent of the time.

 

            Law Enforcement Exemption

 

Other exemptions are not generally applicable to the law enforcement area.  Of most importance to a police chief is a special exemption from the forty hour per week overtime threshold which applies to law enforcement personnel.  To come under the law enforcement exemption, an employee must:

 

(1)        Be a uniformed or plainclothes member of a body of officers and subordinates;

 

(2)        Be empowered by statute or local ordinance to enforce laws designed to maintain public peace and order and to protect life and property from accident or willful injury, and to prevent and detect crime;

 

(3)        Have the power to arrest; and

 

(4)        Have participated in a special course of instruction or study (or will undergo on-the-job training) which typically includes: self-defense, physical training, firearms proficiency, criminal and civil law principles, investigative and law enforcement techniques, community relations, medical aid and ethics.  Not included in this category are such personnel as dispatchers, civilian parking checkers, building security guards and records clerks.

 

It should be noted that a municipality is not required to establish a special work period and may, if it chooses, apply the forty hour per week standard to law enforcement personnel.

 

In order to take advantage of the law enforcement exception, a municipality must establish a regularly recurring work period of at least seven consecutive days and not more than twenty-eight consecutive days.  (See Table 1 in Appendix)  An employer may have one work period applicable to all employees or different work periods applicable to different employees or groups of employees. 

 

Prior approval of the Department of Labor’s (DOL) Wage and Hour Division is not required.  The employer must, however, make some notation in its records which shows the work period for each employee and which indicates the length of that period and its starting time.

 

For those employees who have a work period of at least seven but less than twenty eight consecutive days, no overtime compensation is required until the number of hours worked during such work period exceeds the number of hours shown for that period on Table 1 (see Appendix).  Once that point is reached in a particular work period, all additional hours are paid at one and one-half times the employee’s regular rate of pay.  To use Table 1, select the number in the left-hand column which represents the number of days chosen for a particular employee’s work period.  The corresponding number in the right-hand column represents the maximum number of hours which that employee can work during that pay period without receiving overtime payments.  All hours worked in excess of that number must be compensated at the time and one-half rate.

             

            Compensable Time

 

Compensable hours of work generally include all of the time during which employees on duty were on the employer’s premises or at a prescribed workplace, as well as all other time during which the employee is suffered or permitted to work by the employer.  Compensable hours thus include all pre-shift and post-shift activities which are an integral part of the employee’s principal activity or which are closely related and indispensable to its performance, such as attending roll call, writing up and completing reports or tickets, etc.  It also includes time which an employee spends in attending required training classes and “on call” (see later section) if he or she is thereby restricted from effectively using the time for personal pursuits.  For example, time spent by employees who are confined to barracks while attending police academies are not on duty during those times when they are not in class or at a training session, since they are free to use such time for personal pursuits.  Also, a police officer who has completed his or her tour of duty, but who is given a patrol car to drive home and use on personal business, is not working simply because the radio must be left on so that the officer can respond to emergency calls.  Of course, the time spent actually responding to such calls would be compensable. 

 

Unless the municipality elects to use the special overtime exemption for law enforcement personnel, overtime pay (at a rate of time and one-half) must be provided for all compensable time in excess of forty hours per work week.  (A work week is a period of seven consecutive days comprising 168 consecutive hours).

 

PRACTICE POINTERS

 

A police officer who has a 14-day work period earns an annual salary of $26,000.00 for all hours worked.  After working 96 hours in one 14-day work period, the officer is entitled to overtime pay for the 10 hours he or she worked in excess of the 86 hour maximum under a 14-day work period. 

 

The officer’s pay would be computed as follows:

 

$26,000/year=$1,000.00/work period

26 work periods/year

 

Regular rate of pay:

$1,000(salary for work period)=$10.42/hour

            96 hours worked

 

10 hours of overtime x $10.42=$52.10                                          2

Regular pay:     $1,000.00

Overtime Pay (at half-time)       52.10

Total:    $1,052.10

 

 

Example #2

 

An officer who is assigned to a 28-day work period earns $8.00 per hour.  Where such officer actually works 191 hours (i.e., 20 more than the 171 hour maximum) in a particular work period, he or she will be entitled to compensation as follows:

Regular rate of pay:       $8.00/hour

Overtime:  $8.00 x 1½ = $12.00/hour

171 hours @ $8.00/hour = $1,368.00

20 hours @ $12.00/hour =          240.00

Total:                                     $1,608.00

 

            Trading Time (Shift Swapping)

 

An employer is required to pay overtime for excess hours worked in a work period as a result of “trading time” among employees unless:

 

(1)        The trading of the time is done voluntarily by the employees and not at the request of the employer;

(2)        The trade is not made for reasons related to the employer’s business operations;

(3)        The employer maintains records of all time traded by employees; and

(4)        The time is traded and paid back within a twelve month period.

             

            Meal Time

 

Where the employer has adopted the law enforcement exemption, employers must compensate law enforcement personnel for time spent eating meals where the employee is on duty for twenty-four hours or less during each tour of duty.  Where the law enforcement exception has not been adopted, and the standard forty-hour work week is used, meal time is compensable unless the employee is fully relieved of all duties (including answering telephones) during the period.  Keeping a radio on does not mean that an officer must be paid for a meal time.

             

            Paid Details

 

Time worked by police officers on off-duty assignments or paid details (such as highway construction, concerts, public gatherings, etc.), for which the town is reimbursed by a private entity, is  not treated as compensable time for purposes of determining overtime payments.  However, where the detail is performed for the municipal employer (DPW, Water, etc.), time spent is added to an officer’s regular police work for the given work period.  Therefore, to be safe, cities and towns should ensure that the rates charged for such police protection are sufficient to cover the overtime rates of the officers involved.

             

            Travel Time

 

Pursuant to the FLSA, when travel time is compensable depends entirely on the kind of travel involved.

 

(1)        Home to Work Rule

 

As a general rule, home to work travel is not compensable, even if an employee must travel from home to an outlying site to get to the employer’s premises.  This is true whether an employee works at a fixed location or at different job sites.  Generally an employee is not at work until reaching the job site.[12]  However, if an employee is required to report to a meeting place where he or she is to pick up materials, equipment, or other employees, or to receive instructions, before traveling to the work site, compensable time starts at the time of the meeting.[13]

 

(2)        During Work Day

 

Traveling by an employee from one job site to another job site during the work day is compensable work.  Also, traveling from an outlying job at the end of a scheduled work day to the employee’s premises is compensable.[14]  According to the DOL regulations, if an employee is required to report to a meeting place to receive instructions, perform other work there, or pick up tools, the travel from the designated meeting place to the work site is compensable working time and must be counted as such, regardless of contract, custom or practice.

 

(3)        Transportation Furnished By Employer

 

Employees are not entitled to compensation from home to work merely because the employer furnishes the transportation.  An employee who chauffeurs other employees to work at the direction of the employer, however, is entitled to compensation.  An employee who uses a government car is working while driving on business, but not while going to and from home.  For example, a police officer who has the use of a patrol car and drives it home at night and back to the station in the morning is not entitled to compensation for that time, unless he or she is required to pick up other officers and transport them to and from work or actually responds to an emergency from his or her home.

 

Pursuant to the above quoted regulations, the Department of Labor has issued a letter ruling dated November 15, 1990, which provides further guidance in this area.  The inquiry involved a police officer who was assigned to a police academy for two weeks of traffic accident investigation training.  The classes were scheduled from 8:00 a.m. to 5:00 p.m. each day.  In order to travel to and from the training site each day, the police officer picked up a police vehicle at the municipal building in lieu of using his personal vehicle, since no travel expenses were provided to him for attending the training.  The time spent traveling between the training site (approximately 45 minutes each way) presumably occurred before 8:00 a.m. and after 4:00 p.m. (the officer’s normal shift) each day.

 

According to the Department of Labor, the travel performed by the police officer at the beginning and the end of the work day from the officer’s home to the municipal building, and from there in a police vehicle to the police academy, is considered ordinary home to work travel and would not be considered to be compensable hours of work under the provisions of the Fair Labor Standards Act. 

 

The Department of Labor stated, “an employee who travels from home for his or her regular work day is engaged in ordinary home to work travel which is a normal incident of employment. (We note that the approximate 25 mile difference between . . . and . . . is not an unreasonable distance for home to work commuting.) This is true whether he or she works at a fixed location or at different sites.  Normal travel from home to work is not work time as discussed in sections 785.34 and 785.35 of regulations, 29 CFR Part 785. 

 

The mere fact that the employer provides the employee with transportation, for the employee’s convenience, does not convert such travel time to a principal activity.  However, if there is a custom, contract, or practice providing the employee’s regular daily travel between home and the work place is compensable, such time will be so regarded under the provisions of section 4 of the Portal Act of 1947 as indicated in Section 785.34. On the other hand, if the employer requires or directs the employee to drive the employer’s vehicle to a job location, such travel time would constitute hours worked under the provisions of FLSA.  In this regard, see section 785.38 of Part 785.”

 

Based upon the above, in the absence of a “custom, contract or practice,” it is clear that compensation for travel time put in by a police officer prior to his or her working hours and after the normal work day, is not mandated under the Fair Labor Standards Act.

 

Pursuant to Section 4 of the Portal-to-Portal Act, if a department has customarily paid officers for travel time between home and a training facility, or is required to do so by an existing collective bargaining contract, such time must be included in computing hours worked. 

 

(4)        During Assigned Shift

 

A more complicated issue arises when an officer attends a training seminar during at least part of his or her regularly assigned shift but the seminar extends beyond the duration of the shift.  By way of example, an officer assigned to the 8:00 a.m. to 4:00 p.m. shift, who reports to the station at 8:00 a.m., picks up a cruiser and drives for an hour with two (2) other officers to a training facility fifty (50) miles away and, when the seminar ends at 5:00 p.m. drives back to the station, arriving at 6:00 p.m., would be entitled to compensation from 8 a.m. to 6 p.m.

 

Each of the officers should be paid for the morning commute from the station to the academy, not as “travel time” but as regular shift work.  As discussed above, Section 785.38 of the FLSA Regulations (29 CFR), requires that time spent by an employee in travel as part of his or her principal activity must be counted as hours worked.  The Regulations cite examples such as travel from job site to job site during the workday as well as where an employee is required to report at a meeting place to receive instructions or to perform other work there, or to pick up and to carry tools.  In such cases, the travel from the designated place to the work place is part of the days’ work, and must be counted as hours worked regardless of custom, contract or practice. (emphasis added).

 

Likewise, there should not be any disagreement concerning the officers’ entitlement to compensation for time spent in class after the end of the officers’ shift, i.e., from 4:00 to 5:00 p.m.

 

There is room for questioning which, if any, of the officers must be compensated for the time spent traveling from the academy to the station at the end of the day, i.e., 5:00 to 6:00 p.m. Again FLSA Regulation Section 785.38 is helpful in addressing this issue.  The Regulation includes the following example:

 

“If an employee normally finishes his work on the premises at 5:00 p.m. and is sent to another job which he finishes at 8:00 p.m. and is required to return to his employer’s premises arriving at 9:00 p.m., all of the time is working time.  However, if the employee goes home instead of returning to his employer’s premises, the travel after 8:00 p.m. is home-to-work travel and is not hours worked.[15]

 

Certainly the driver is entitled to pay for the time spent returning to the station after the training class ended.  The 50 mile distance might be deemed a normal commuting distance, thus by itself not requiring compensation for travel time.  However, the fact (if not requirement) that the passengers returned to the station, probably would entitle them to such compensation also. 

 

PRACTICE POINTERS

 

In the absence of a custom, practice or preexisting collective bargaining agreement to the contrary, time spent commuting from an officer’s home to and from a training facility should not be counted as time worked for compensation purposes.

 

Officers who travel during their assigned shift to a training facility should be compensated for such travel time.

 

An officer who is required to report to the station and pickup and/or drop off a departmental vehicle to transport himself and fellow officers to and from a training facility must be compensated for all time spent traveling, including time outside the officer’s assigned shift.

 

Where a departmental vehicle is provided to an officer solely as a convenience (and not used for transporting other officers), and where no custom, practice or collective bargaining agreement provides otherwise, such travel time would not be compensable, since it would be considered ordinary home to work travel.

 

            COMPENSATORY TIME

 

Police departments may allow sworn and civilian employees the option of receiving compensatory time off in lieu of monetary overtime compensation.[16]  The rate must be not less than time and one half the number of hours worked for which such overtime compensation is due.  Exempt employees, such as chiefs, may also be permitted to accrue compensatory time off under certain circumstances.

 

            Agreement Required

 

The 1985 Amendments to the FLSA allow state and local governments to use compensatory time off in place of monetary compensation.  This is only permitted when there is an agreement or understanding with an employee or collective bargaining representative.[17]  Any agreement with an employee to accept compensatory time rather than pay must be made “freely and without coercion or pressure”.[18] 

 

It is necessary that there be an understanding or agreement of some kind prior to the work being done.[19]  It is not essential that the agreement be in writing, although that is preferable if confusion is to be avoided.  In any event, a record of such agreement must be maintained by the employer in some fashion.  There is also no need to offer compensatory time off to all employees and it is even lawful to make different comp time arrangements with various employees.[20]

 

At a minimum, an agreement for compensatory time off in lieu of overtime pay shall include: an agreement by the employee or bargaining representative that comp time is a condition of employment, and some notice (orally or in writing) to the employee that under mutually agreeable conditions accrued comp time may be saved, used or, if the employer is so inclined, exchanged for pay.

 

The 1985 Amendments also specified that where there was a comp time practice in place before April 15, 1986, this would satisfy the need for an understanding.  All that was required in such cases was that a notice be given to employees that the practice was a condition of employment.  For employees hired after April 14, 1986, the general rules for having an agreement with such employee or their bargaining representatives would apply.[21]

 

            Restricting Accrual and Use

 

Compensatory time agreements may regulate the accrual and use of such time by employees.  An employee could be limited to accruing a certain number of hours (see below for maximum allowed).  Restrictions can also be imposed on how long the hours may be “banked”, when they must be used, and what amount of notice will be required before use is allowed.  A requirement that an employee use up all accrued comp time before taking any vacation time is expressly permitted, even if this means that such employee forfeits accrued vacation as a result.[22] 

 

An employer could also agree to retain the right to “cash out” all or any part of an employee’s accrued comp time at any time or under any mutually agreeable circumstances.  Since accrual requires a mutual agreement, an employer can specify whether and for what work hours compensatory time accrual is permitted.[23]  Similarly, the agreement can provide for any combination of money and comp time so long as they are both calculated at time and one-half.[24]

             

            Enforcement

 

Enforcement is limited to FLSA overtime, meaning hours worked in excess of FLSA thresholds.  For police, this means hours actually worked in excess of 40 hours per week (or a higher number if an employer has adopted a §207(k) work schedule).  Therefore, even though an employer may allow an employee to accrue time worked in excess of 8 hours in a day or 35 hours in a week or to count sick or vacation days as time worked towards an overtime level, for example, such time need not be compensated at time and one-half under the FLSA.  Enforcement, in such cases, is limited to filing a grievance under the collective bargaining agreement or a complaint under any applicable local ordinance or by-law.

 

            Bargaining Issues

 

Since compensatory time is a mandatory subject of bargaining, any new agreement or material change in an existing practice must involve the exclusive bargaining representative (union), if there is one.  Where a position is in a bargaining unit, an employer commits a prohibited (unfair labor) practice by negotiating directly with an employee on a condition of employment.  This limitation does not preclude an employer from offering a unionized individual the opportunity to work certain overtime hours for comp time rather than pay, so long as that discussion stays within the parameters of an existing practice or bargaining agreement.

 

            Limitation on Use

 

In general, comp time is similar to “money in the bank” for an employee who can spend it when he or she chooses.  In 1995 the U.S. Supreme Court declined to review a decision that held that an employee cannot be forced to use accrued comp time.[25]  However, on October 12, 1999 the Supreme Court agreed to review a similar decision.[26]  The court said it would limit its review to “whether a public agency. . .may, absent a pre-existing agreement, require its employees to use accrued compensatory time.” 

 

So long as it does not “unduly disrupt” the operations of the department, a  request to use accrued comp time must be granted within a “reasonable period” after the request is made.[27]   A denial must be based on more than inconvenience.  The fact that a replacement will have to be paid at overtime is not a sufficient basis for denying the request.[28]

 

Since neither a union nor an employee can bargain away FLSA rights, any agreement or understanding which contains provisions violating the DOL regulations is invalid.[29]

 

An employee is entitled to be paid for all accrued comp time upon leaving the department.  The payment is calculated as the higher of:

·        the average regular rate received by such employee during the last 3 years of employment; or

·        the final regular rate received by such employee.[30]

 

            Accumulation Limits

 

Police officers may accrue up to 480 hours of compensatory time (equal to 320 hours of work at time and one-half).  Other employees whose work involves public safety (e.g., fire), emergency response or seasonal activity may likewise accumulate up to 480 hours of comp time.  It is not essential that an employee work exclusively in one of these categories to qualify for the higher cap, so long as some of an employee’s work regularly includes such activities.[31]

 

            Seasonal Employees

It is not always easy to determine which employees qualify for the seasonal activity category.  Summer officers would qualify.  In the case of highway department workers, for example, year round employees who have peak demands during snow plowing or road paving periods could also qualify.  Clerical employees in the police department would not qualify even though they experienced certain periods of increased work at budget time, for example.  An underlying issue is whether an employee is likely to be able to do the extra level of seasonal work and stay within the constraints of the lower accrual cap.

 

An employee who transfers from a position with a higher cap to one with the lower limit is able to retain any accrued comp time.  However, such employee must be paid for any new overtime until the number of accumulated hours of comp time drops below 240.[32]

 

The Department of Labor regulations contain the following definitions:

·        Public Safety: personnel engaged in law enforcement, fire fighting or related activities.

·        Emergency Response:  dispatching of emergency vehicles and personnel, rescue work and ambulance service personnel.

·        Seasonal Activity:  work during periods of significantly increased demand that are of a regular and recurring nature.

 

            Comp Time for Chiefs

 

The FLSA does not limit a municipality’s ability to enter in compensatory time arrangements with chiefs.  As exempt employees, chiefs are not limited by the 480 hour cap applicable to regular police officers.

 

Persons with accrued comp time who are appointed chief have several options.  For example, the employee could insist on taking the time or being paid for it prior to starting work as the chief.  The practice of carrying forward accrued comp time hours upon promotion into an exempt position is not covered by the FLSA.  One problem could be that after the applicable 2 or 3 year statute of limitation period, the chief might not be able to utilize the FLSA to enforce his or her right to pay for such accrued time.  Therefore, a preferable course of action would be for an officer to use up or get paid for all accrued comp time before starting work as a chief.  If this is not done, a clear agreement should be reached with the municipality on how past and future comp time will be handled.  Chiefs could include such provisions in their employment agreements.[33]

 

            ON-CALL TIME

 

As a general rule, a non-exempt employee must be paid for on-call time if such time is predominantly for the employer’s benefit.  In attempting to determine when an off-duty employee who is required to remain available if the employer should call must be compensated, it is necessary to review not only the statute and DOL regulations, but also a variety of Federal court decisions.  Unfortunately, since most of the more recent decisions are at the District or Circuit Court levels, some inconsistencies are found.  One thing is clear, however -- the outcome of any case is greatly dependent upon the particular facts involved and how burdensome a court finds the employer-imposed restrictions on an employee’s off-duty time.[34]

 

The fact that an employee must remain available for recall, in and of itself, does not require that such off-duty, on-call time be compensated.  It is the degree of restriction placed upon an employee’s ability to engage in personal pursuits which will be determinative of whether an obligation to pay for such off duty time arises.

 

The Supreme Court first addressed the issue in 1944.  The DOL regulations citing that case and other federal cases, state:

 

“An employee who is required to remain on-call on the employer’s premises or so close thereto that he cannot use the time effectively for his own purposes is working while on-call.  An employee who is not required to remain on the employer’s premises but is merely required to leave word at his home or with company officials where he may be reached is not working while on-call.”

 

While there are certain rules which apply exclusively to public safety employees (which will be discussed), there are some general factors which courts and the DOL appear to weigh most regularly in determining whether compensation is required for on-call time:

 

(1)               terms of a collective bargaining or employment agreement;

(2)               physical restrictions placed on an on-call employee;

(3)               maximum period of time allowed by the employer between the time the employee was called and the time he or she responds to work;

(4)               percentage of calls expected to be responded to by on-call employees;

(5)               frequency of actual calls during on-call periods;

(6)               actual uses of on-call time by an employee; and

(7)               what disciplinary action, if any, is taken for failure to respond to any or a certain percentage of calls.

             

            Terms of Agreement

 

While an agreement which clearly violates the FLSA is void, courts are willing to give some latitude to agreements which embody reasonable terms and shed light on the issue of for whose benefit off-duty hours are being spent.  For example, an agreement that required officers to remain on-call at the police station would presumably trigger a requirement for compensation.  A possible exception might involve a rare instance where a potential for trouble exists (forecast hurricane, Y2K, strike at local plant, etc.) and the officer and municipality agree that no payment would be made for on-call time but double or triple time would be paid if the officer were actually called to duty.[35]

 

            Restrictions on Movement

 

Requiring an officer to remain at home and in uniform, ready to respond immediately would certainly require compensation.[36]  However, employees who are free to pursue personal interests, be with their families or carry on another business are far less likely to be eligible for compensation.  Requiring an off-duty employee to carry a beeper or leave a phone number where he or she  can be reached at all times, by itself, is not enough to trigger a requirement for compensation.[37]  In fact, one court felt that wearing a beeper was something an employee could do to minimize the effect of the employer’s restrictions.[38]

 

            Response Time

 

Where employers require a response within a very short period of time, there is a greater likelihood that on-call compensation will be required.  However, the geography of the community should be taken into account.  For example, in a rural area, where an employee could reasonably be expected to reach any location in town within 5-10 minutes, shorter response times might be allowed.  However, in a larger city, even a 15-20 minute response time requirement might trigger on-call time pay.

 

By way of example, EMT’s who were required to report to work in 5 minutes were entitled to on-call compensation.[39]  Conversely, in a very small rural community, a 7 minute response time was held not too restrictive.[40]

 

            Share of Calls

 

In the private sector, or even in firefighter situations, some employers often require only that employees respond to a certain percentage of calls.  Generally, when a community places a police officer on-call, he or she is expected to respond to all calls.  Many cases have been decided on the basis of whether an employer’s expectations were so restrictive as to require on-call compensation.  In a case involving two X-ray technicians who perpetually shared the on-call duties and were required to respond to the hospital within 20 minutes, the court held that on-call pay was not required. 

 

However, in a situation where only one employee was required to be perpetually on-call (round the clock, seven days per week, 365 days per year), a court ruled that compensation was required.  The court’s decision in the latter case hinged on the finding that the employee was actually shown to be able to pursue personal matters and that, in practice, the on-call policy was not overly restrictive.  On the other hand, an airport caretaker who was on perpetual call was found to be entitled to 15 percent of the pay she received for actual working time.[41]

 

            Frequency of Calls

 

The courts are inclined to consider evidence of the actual number of calls to which an off-duty employee responds over a given period of time.  Firefighters were found entitled to on-call compensation where, on average, there were three to five calls of one (1) hour duration per 24 hour on-call period.  In fact, there were as many as thirteen (13) calls on some 24 hour on-call shifts.[42]  In this case the 20 minute response rule meant that firefighters often had to plan their personal lives accordingly, taking 2 vehicles and hiring stand-by baby sitters.

 

An opposite result was reached in an opinion letter rendered concerning on-call firefighters who were governed by a 15 minute response requirement.  The difference was that in the latter case, firefighters were rarely called.[43]  In the same vein, a regional (less authoritative) Wage and Hour opinion Letter indicated that no compensation was required where there was no more than one call per two-hour period of on-call time.[44]

 

            Actual Use of On-Call Time

 

Where courts learn that on-call employees are able to use their on-call time for substantial personal endeavors, they are less inclined to order compensation.  EMT’s who were able to run their own independent businesses while on-call or to pursue personal hobbies, were ruled not entitled to on-call compensation, even though there was a 10 minute response requirement.[45]  Since decisions will often be governed by the specific facts of a case, evidence of how on-call employees actually spend their time can influence the outcome of the case.

 

            Public Safety Officials

 

Police officers governed by section 207(k) are covered by rules in addition to those discussed above.  For example, while sitting at home on-call until being summonsed to court to testify, in a constant state of readiness, officers must be compensated.[46]  Conversely, academy attendees are not entitled to pay outside of class hours so long as they are free to use the time for their own pursuits, even if confined to a barracks.  In addition, police officers do not become entitled to on-call compensation simply because they are given police cars to take home and use on private business, even where the department requires they keep the radio on and respond to emergency calls.

 

            Effect of On-Call Payments

 

In calculating an employee’s regular rate of pay (which also serves as a basis for overtime pay) an employer must include any “bonus” paid for on-call time which was not required to be paid.[47]  By way of example, while not required to do so, some employers pay a “bonus” to workers who are required to carry a beeper.  Since on-call pay simply for carrying a beeper is not required, an employer must add the amount of the bonus to an employee’s regular base pay in calculating overtime payments.  (For example, a $40.00/week bonus, when added to a regular base pay of $560.00 per week, will result in overtime calculations on the basis of $600.00 per week for 40 hours or a $15.00 per hour regular (base) rate of pay.)

             

            Pay Before/After a Call

 

An employee must be compensated once he or she arrives for work.  Unless it involves an exempt (e.g., salaried managerial) employee, once the number of hours in a given week or work cycle reaches 40 (or other section 207(k) permitted number), overtime must be paid.

 

Where on-call payments are not required by the FLSA, an employer and employee are free to agree on the amount of on-call compensation.  Where on-call payments are required, they must be at least the minimum wage.  It is permissible to have two sets of wage rates, one for regular duty and one for on-call.[48]

 

At present, DOL regulations have not taken any position on whether home-to-work travel time when on-call and responding to duty must be compensated.  It is possible  that compensation will be required, however, if an on-call employee is required to respond to a place far from home, not simply to the station, for example.

 

PRACTICE POINTERS

 

It should be clear that general rules are difficult to determine, since courts prefer ruling on the facts of each particular case.  However, it is likely that the following examples will result in the indicated rulings.

 

Example 1. A police department will have to compensate off duty officers who are on-call and required to:

(a)        respond to calls almost immediately (5-10 minutes);

(b)        remain in uniform*; and

(c)        face discipline for failure to respond promptly.

 

NOTE: *Even if not specifically required, since an officer must respond in uniform in 5-10 minutes, the officer might argue that he or she is effectively required to remain in uniform while on-call.

 

Example 2. A police department will probably not have to compensate off-duty officers who are on-call, simply because they are required to:

(a)                  respond promptly to infrequent calls; or

(b)                 carry a beeper or leave a number at which they can be reached.

 

 NOTE: The result might be different if the court finds that the actual number of calls is so high that it effectively curtails an officer’s off-duty freedom to such a degree that the primary beneficiary is the employer not the employee.

             

            Special Consideration For Police Chiefs

 

All of the foregoing discussion centered on rules governing on-call officers who are “non-exempt” as defined in the FLSA.  Some communities are placing police chiefs on-call and imposing similar response rules to those governing other officers.  It is arguable that by doing so a community removes the chief from the exempt category and thus entitles him or her to overtime and on-call compensation under the FLSA. 

 

In order to qualify as an exempt employee, and thus be entitled only to salary but not overtime or call time, among the tests which must be met is included the requirement that he or she customarily and regularly exercise discretionary powers, i.e., a chief must be free generally to determine when (and whether) to respond to duty.[49]  Some communities are going even further, by setting an unusually long regular weekly schedule for the chief, all to be covered by a base salary.  While a truly exempt employee is not entitled to overtime pay, he or she must not be penalized (especially on an hourly basis) for incidental absences such as a doctor’s appointment, personal business or other matters involving less than one day.

 

PRACTICE POINTERS

 

The following example is typical of some small Western Massachusetts communities and is not hypothetical:

A salaried police chief is required to work more than a 40 per hour week schedule.  When the chief misses work, he is docked on an hourly basis.  The chief is required to alternate on-call with the town’s only other full-time officer, a patrolman, every other day.  The on-call officer must respond immediately in uniform to every call.  The chief is not compensated for on-call time nor does he receive extra (never mind overtime) pay when actually responding to an off-duty call.  The patrolman receives no on-call pay but is compensated for actual responses.  Based upon the guidelines, and subject to the 5 person rule it would appear that, at a minimum:

 

RE:  Patrolman

 

1.      The patrolman must receive overtime pay for all hours actually worked in excess of forty (40) per week (or other pay cycle if a 207(k) exemption has been adopted).

 

2.      If the patrolman’s freedom is found to be so restricted that his or her on-call time is primarily for the town’s benefit, he or she is entitled to on-call compensation.  A court will look to those factors discussed above in making such a determination.

 

RE:   Chief

 

1.      All hours in excess of forty (40) per week or such other 207(k) cycle as the town may have elected, may be compensable as overtime, since it appears the town is treating him as chief in name only.

 

2.      If the chief (per 1 above) is found not to be an exempt employee, he will fall under the same rules as the patrolman as regards on-call and overtime eligibility for time spent in responding to calls from an off-duty status.

 

·        The Fair Labor Standards Act provides for retroactive compensation for lost wages for a two (2) year period.  However, where the employer’s violation is found to be knowing or intentional (which for municipalities has yet to happen!), a three (3) year period may be used.

 

Communities which suffer from the misconception that a court would be reluctant to impose large retroactive on-call pay awards should read the 1990 Federal District Court case which awarded $57,000,000.00 to 91 mechanics at a pulp mill for on-call time.[50]

 

PRACTICE POINTERS

 

A community not intending to compensate police officers for on-call time should attempt to assure that an off-duty officer’s time is as free as possible.  Where the number of actual calls are few and far between, a community which affords an off-duty officer a reasonable time to respond (and even offers to provide a beeper and off-duty cruiser) may avoid on-call pay liability. On the other hand, where in actual practice the number of off-duty calls is high, and discipline is threatened (or imposed) for less than immediate or a certain percentage of responses, on-call pay is probably required.

 

In situations where on-call pay is not required, a community is free to reach an agreement with a union (or in the absence of a union, the employee directly) concerning on-call compensation.  Where it is required, any similar agreement is acceptable concerning compensation so long as it is at least the minimum wage.  The on-call rate may be different than an officer’s regular pay.

 

In determining what is a reasonable response time, so as not to interfere unreasonably with an officer’s off-duty freedom, the community’s geographic features should be considered.  Where any point in a rural community can be reached in five minutes, a shorter response time may be reasonable.  In a large city, a longer response time is more appropriate and if found to be reasonable will be less likely to invoke on-call pay requirements.

 

Police chiefs should generally not be placed in an “on-call” status.  It is reasonable to expect the chief will voluntarily respond to a true emergency.  However, the practice of having a chief fill a regular on-call slot, (much the same as a regular officer) especially when combined with other factors discussed above, will probably result in the loss of his or her exempt employee status and thus subject the community to a requirement to pay not only on-call but also overtime compensation.

 

            CANINE CARE

 

Police officers assigned to a department’s canine unit usually bring “their” dogs home to live with them while off duty.  This has several advantages:  the department does not have the expense of maintaining its own or contracting out for a kennel for lodging and grooming the dogs, and the bonding process between dog and handler will be heightened, which should result in a more loyal and effective dog.  While at home with the dog, an officer will inevitably engage in numerous activities on a daily basis taking care of the dog, such as feeding, exercising, training, cleaning and grooming.  Additionally, the dog has to be transported back and forth between home and the police station.

 

The issue of whether the Fair Labor Standards Act (“FLSA”) requires the payment of overtime compensation for the time spent taking care of the dog or transporting the dog should be of concern to police chiefs who are considering the establishment of canine units in their departments.  The potential overtime liability under the FLSA is a significant cost factor to be taken into account when preparing a department’s annual operating budget.  Guidance on this issue has been provided by the United Stated District Court for Massachusetts in Andrews, v. Dubois.[51]

 

            Facts

 

The Plaintiffs in the Andrews case were correctional officers employed by the canine unit of the Massachusetts Department of Correction.  As part of their responsibilities, they kept departmental dogs at their homes seven days a week including holidays and vacations, and they had to care for and train the dogs.  Some officers were given departmental vehicles for transporting the dogs, and others used their own vehicles.  Oftentimes, while at home, officers with their dogs would be called for unscheduled, emergency situations.

 

The officers alleged that they averaged three to four hours per day, beyond their regular eight hour shifts, taking care of and transporting the dogs, and they sued for overtime compensation for the “work” performed outside their regular scheduled shifts.

 

            FLSA Requirements

 

The Fair Labor Standards Act mandates the payment to an employee of overtime compensation, at a rate of one and one-half times the regular rate of pay, for all hours worked in excess of forty hours per week.  (Longer work periods and hourly thresholds may be established for police officers and firefighters.)  The FLSA also specifically provides, however, that an employer is not required to pay an employee for activities which occur before or after an employee’s principal activity, i.e., for so-called “preliminary or postliminary” activities.

 

            Time Spent Caring for Dogs

 

The first question the Court addressed was whether the time spent by the officers in caring for the police dogs at home is a principal activity of their jobs or simply a preliminary or postliminary activity.  The term “principal activity” has been interpreted to include any activity that is “an integral and indispensable part of the principal activities for which covered workmen are employed.”  According to the Court, activities are “integral and indispensable” if they:

 

·        are made necessary by the nature of the work performed;

·        fulfill mutual obligations between employers and employees;

·        directly benefit employers in the operation of their business; and

·        are so closely related to other duties performed by employees as to be an integral part of those duties.

 

The court applied this test and concluded that time spent on canine activities at home by the canine officers was compensable “time spent working.”  The court compared the dogs to “security equipment” necessary for the officers to perform their principal activities (i.e., canine assisted patrol and emergency response).  Therefore, activities performed caring for the dogs are indispensable parts of maintaining the dogs as law enforcement tools and are closely related to the work duties of a canine officer.  The Court also noted that time spent on activities such as feeding, grooming, and walking the dogs is time the officers do not have to themselves.  The Court ruled, therefore, “that these activities are performed as part of the regular work of the canine officers in the ordinary course of business and are . . . not preliminary or postliminary activities.”

 

This conclusion is consistent with decisions from other jurisdictions.  A 1995 decision involving the New York Transit Authority concluded that walking, feeding, grooming, training and cleaning up after police dogs are integral and indispensable parts of the officers’ principal activities and are compensable under the FLSA.[52]   Attendance at canine training sessions, unscheduled emergency calls, and canine demonstrations were found to be integral and indispensable parts of the officers’ principal activities.[53]

             

            Transportation Time

 

Although the Court agreed with the canine officers that time spent at home caring for the dogs is compensable work time under the FLSA, it rejected the officers’ arguments that time spent transporting the dogs back and forth between home and the station is also compensable.

 

In reaching the conclusion that time spent transporting the dogs is not compensable, the Court focused on the following explicit language of the FLSA which excludes commuting time:

 

[N]o employer shall be subject to any liability . . . on account of the failure of such employer to pay an employee . . . [for] walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform . . . . 29 U.S.C. §254(a)(1)

 

The Court stated that the presence of the dogs during the ordinary commute between work and home does not add any time to that commute.  Since the officers would be making the same commute whether or not they had dogs with them, the commute itself is not an integral and indispensable part of the officers’ principal activities, and, therefore, is not compensable.  If extra effort and time were required because of the presence of the dogs, this conclusion might be different, but the Court noted that loading the dogs in and out of the car requires only a negligible or de minimus degree of time and effort that does not rise to the level of compensable work time.

 

While there is some split of authority on this issue, the Court noted that a majority of the courts that have addressed this transportation issue have concluded that such commuting activity is specifically excluded by the FLSA and that canine officers are not entitled to additional compensation for what they would have to do anyway, i.e., getting to work. 

 

            Volunteers

 

A police department would not be able to avoid overtime liability under the FLSA by claiming that the canine officers volunteered for those duties.  As the Court noted, the fact that an employee volunteers for an activity does not mean it is not compensable.  This is because the FLSA prohibits employees from volunteering to provide (without proper compensation) the same type of services which they ordinarily perform for the employer.  The apparent intent of this prohibition is to prevent employers from avoiding FLSA requirements by directly or indirectly pressuring employees to “volunteer” their services.

 

Prior FLSA letter rulings of the Department of Labor (e.g., August 11, 1993) have also held that ownership of the dogs is not a relevant factor in determining the compensability of time spent on principal work activities under the FLSA.  Thus, even if an officer volunteers for canine unit work, using his own dog, there will be overtime liability exposure under the FLSA for time spent caring for the dog at home.

 

Additionally, the Supreme Court has held that employees cannot waive their compensation rights under the FLSA.[54] 

 

            Statute of Limitations

 

Since the Court found the Department of Correction liable to the canine officers for time spent at home caring for the dogs, it then had to address the back pay issue.

 

The FLSA generally has a statute of limitations which allows employees to recover back wages for the two years prior to commencement of the lawsuit.  However, this may be extended to three years of back pay if the employer’s violation of the FLSA is found to be “willful.”

 

Citing Supreme Court precedent, the Court noted that an employer commits a willful violation where it knew or acted with reckless disregard of whether it was violating the statute.

 

The employer’s state of mind or awareness of the law is not relevant when determining if the employer acted willfully; the significant inquiry is the employer’s knowledge, awareness, and motivation.

 

However, evidence that an employer was aware of the FLSA’s requirements does not, in and of itself, prove that the employer willfully violated the law.  Since the Department of Correction did not anticipate the particular application of the law involved in this case, the Court concluded that there was not a willful violation.

 

PRACTICE POINTERS

 

The following are examples of common misconceptions:

 

·        Don’t be in a hurry to conclude pending on threatened FLSA claims.  The U.S. Supreme Court may rule that the statute no longer applies to municipal employers.

·        For FLSA base pay calculations, the following must be included:

-  education incentive

-  longevity pay

-  hazardous duty pay

-  working out of grade pay

-  specialty pay

·        The FLSA does not count time not actually spent working in calculating hours towards the overtime threshold.  Not counted are:

-  sick leave

-  vacation

-  meal breaks

-  I.O.D. leave

-  documented hours not worked when a minimum recall or court time payment is involved.

·        Even though certain superior officers are in a bargaining unit, they may be “salary, exempt” for FLSA purposes.  In that case no claim for overtime compensation could be brought under that law.  This could result in less exposure for claims that certain items must be included in base pay.  A collective bargaining provision or past practice to exclude certain items would be binding at arbitration.

·        Energetic, over-achievers, who come in early and stay late must have all hours counted towards their FLSA overtime threshold.

·        Adopting the law enforcement exemption, thus increasing the FLSA overtime threshold above 40 hours per week, does not require any specific form of action.  The selectmen could vote to adopt §207(k) and simply put a notation on officers’ pay stubs.  (Although mid-term bargaining with the union, if requested, would be required.)

·        Shift swaps must be paid back within 12 months.

·        Requiring officers to keep their portable radios on during meals does not mean that meal time must be compensated or counted towards the FLSA overtime threshold.

·        An officer that drives other officers in a cruiser to or from work or training must have such hours counted for FLSA purposes.

·        Most commuting time to and from the station, even if in a cruiser, is not compensable under the FLSA.

·        Compensatory time, which must be calculated at time and one half, need not be offered to all employees.  It is possible to make different agreements with various employees or groups.

·        Agreements on comp time use and accrual are generally allowed.  However, the question of whether an employee can be forced to use up accrued comp time is being looked at again by the U.S. Supreme Court.

·        Denials for requests to use accrued comp time must be for very good reasons.  It is not enough that it will result in having to call in a replacement at overtime.

·        As exempt employees, chiefs are not governed by the FLSA rules or 480 hour accrual cap.  They may make any agreement with a municipal employer that both sides find reasonable.

·        Placing an officer “on call” does not necessarily require compensation.  This is the case even where officers are required to carry a beeper or leave a number where they can be reached.

·        Most canine officers must have time spent caring for dogs at home counted as hours worked for FLSA purposes.  Typically 45 minutes per day is used.


 

Chapter 2 - FLSA RECORD-KEEPING RULES (2004)

 

Employers are required to keep records for both exempt and non-exempt employees in order to comply with the Fair Labor Standards Act (FLSA).[55]  Depending upon the nature of the work performed by an employee, such record-keeping requirements vary.  No particular form or order of records is specified in the regulations.  An employer is free to maintain the required records on paper, microfilm or other source documents of an automated data processing system, so long as it has viewing and reproduction (e.g. printing) equipment available.[56]  Obviously, computerized record-keeping complies with such regulations.[57]

 

An employer may use any timekeeping method it selects for keeping track of employees’ hours worked.  It is possible to use an individual acting as a timekeeper or to rely on a time clock, so long as the method is complete and accurate.[58]

 

Employers are required to maintain different records for exempt employees (e.g., supervisors, command staff and chief) than for non-exempt workers (patrol officers, civilian clerks, dispatchers, etc.).

 

It is also necessary for an employer to display conspicuously the Wage and Hour Division’s minimum wage poster.  This briefly outlines the FLSA provisions.

             

            Non-Exempt Employee Records

 

The regulations do not specify any particular form of record-keeping.  Records on wages, hours, sex, occupations and other terms and conditions of employment must be maintained for a specified amount of time.

 

As regards non-exempt employees, in addition to recording retroactive wage payments,[59] the following records must be maintained:

 

1.                  name in full, as used for social security record-keeping purposes, and, on the same record, the employee’s identifying symbol or number, if such is used in place of name on any payroll records;[60]

2.                  home address, including zip code;[61]

3.                  date of birth, if under age 19;[62]

4.                  sex and occupation;[63]

5.                  time of day and day of week on which the employee’s workweek begins.  For employees employed under §207(k) of the FLSA, the starting time and length of each employee’s work period is required;[64]

6.                  regular hourly rate of pay for any workweek in which overtime compensation is due.  The basis for the regular rate, and any exclusions therefrom, must also be explained;[65]

7.                  hours worked each workday and total hours worked each workweek;[66]

8.                  total daily or weekly straight-time earnings or wages due for hours worked during the work day or workweek;[67]

9.                  total premium pay for overtime hours;[68]

10.              total additions to, or deductions from, wages paid each pay period;[69]

11.              total wages paid each pay period;[70] and

12.              date of payment and the pay period covered by payment.[71]

             

            Exempt Employee Records

 

By and large, the record-keeping requirements for exempt employees are nearly identical to those for non-exempt employees.  However, the employer must keep records reflecting the basis on which it pays its exempt employees.  Such records must contain enough information to allow the calculation, for each pay period, of an employee’s total compensation for employment, including perquisites and fringe benefits.  The basis of payment may be shown as a dollar amount of earnings per month, per week or other pay period, with appropriate notation such as “plus hospitalization and insurance plan” or “___ week(s) paid vacation”.

 

There are special record-keeping requirements for employees granted compensatory time under §207.[72]

             

            Records Retention

 

An employer must preserve for at least three (3) years the following records:[73]

 

·        Payroll records;

·        Certificates, collective bargaining agreements, and individual contracts; and

·        Sales and purchase records.*

 

A two (2) year preservation requirement applies to the following:[74]

 

·        Basic employment and earning records;

·        Wage rate tables;

·        Order, shipping and billing records*; and

·        Records of additions to or deductions from wages paid.

 

*Generally not applicable to municipal employers.

 

An employer is free to keep its records in any place it chooses, so long as they are safe and accessible.  When the records are kept at a central location separate from the place of employment, such records must be made available within 72 hours of a request from the Wage and Hour Division of the U.S. Department of Labor.[75]

 

There are both criminal and civil penalties or actions that may result from a willful falsification of records.

 

            Comp Time Records

 

Additional record-keeping requirements are applicable to employers that permit workers to utilize the compensatory time provisions of 29 U.S.C. §207(o).

 

Required records include:

 

·        The number of hours of compensatory time earned each workweek, or other applicable work period, by each employee.  The hours must be calculated at a rate of one and one-half hour for each overtime hour worked.[76]

·        The number of hours of compensatory time used each workweek, or other applicable period, by the employee.[77]

·        The number of hours of compensatory time paid in cash.  The total amount paid and the date of payment should also be included.[78]

·        Any collective bargaining agreement, or written understanding or agreement with respect to earning and using compensatory time off.  This includes oral agreements, because a record of the existence of non-written agreements must be maintained.[79]

             

            207(k) Records

 

It is possible for an employer of law enforcement and fire protection personnel to elect a “work period” of between 7 and 28 days under §207(k).  In such cases, the FLSA overtime provisions would apply after a given number of hours (greater than 40 that applies to most other workers), depending on the length of the work period.

 

The regulations specify that such employers must make some notation on payroll records showing the length of the work period and its starting time.  (For example, “28-day work period, starting at 8:00 a.m.”).  If all employees have identical work periods under §207(k), it is sufficient to make a single notation of the time of day and the beginning day of the work period.[80]

 

            Penalty Provisions

 

At present, the FLSA does not specify any civil penalties for employers that fail to maintain accurate work records (so long as they are not willfully falsified).  However, such failure may hinder an employer during FLSA lawsuits by employees claiming back wages and overtime.  As a practical matter, once an employee makes a claim for uncompensated time or deficient overtime pay, the burden of proof in FLSA cases generally is on the employer.  Therefore, the lack of records could adversely impact an employer’s ability to defend itself.  Where an employee is classified as exempt, for example, it is crucial to show that such individual has been paid on a salary basis.

 

Courts may creatively impose the equivalent of fines where an employer fails to maintain required records.  In a 1997 case, the court effectively imposed a $120,000 fine.[81]  The fines were actually civil money penalties for the underlying minimum wage and overtime violations, or for contempt of a prior court order, rather than for the record-keeping violations themselves.

             

            Rounding Hours Worked

 

It is possible to “round’ employees starting and quitting times.[82]  The rule assumes that, over time, everything evens out fairly.

 

Under the Portal-to-Portal Act, certain activities performed before and after an employee’s primary job duties need not be considered time work.  In police cases, for example, an officer that arrives a few minutes early – without being required to do so – to get ready (put on uniform, check log, etc.) need not have such time counted towards the FLSA overtime threshold.  This would fall under the “de minimus” rule.  (Typically a 10 minute threshold applies.)[83]  On the other hand, where roll-call is mandatory, and takes place before the formal start of an officer’s shift, such time must be compensated and included as hours worked for overtime eligibility. 

 

            Leave Period Records

 

Records of all time off must be kept, regardless of whether an employee is paid for such periods.

 

Time off for such things as holidays, vacation, personal days or bereavement leave is not included as hours worked for FLSA purposes, unless the employer agrees otherwise.

 

            Burden of Proof

 

The burden on an employee in an FLSA suit is relatively low.  Such employee “has the burden of proving  that he performed work for which he was not properly compensated.”[84]  An employee must simply prove that he or she performed work for which he or she was improperly compensated, and must produce sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.  The amount of such required proof need be no more than the employee’s credible sworn testimony.[85]

 

Once this happen, “(t)he burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference from the employee’s evidence.”[86] 

 

Should the employer not be able to produce records of exact times worked, the court will accept an employee’s assertions.  Essentially, the burden is shifted to the employer to disprove the conclusions that result from whatever evidence the employee submits.

 

An employee is required to make use of whatever records an employer maintains.  Failure to do so may be deemed “failure to met the employee’s burden of proof.”[87]

 

Where an employer fails to keep appropriate records of an employee’s time, an employee’s damages can be calculated based solely on his or her testimony and the “just inferences” derived from such assertions.[88]

 

Where an employee fails to show either inaccurate record-keeping by the employer, or employer-knowledge of alleged overtime work, he or she should not prevail on an FLSA suit.[89]  Successful employees should be able to show they kept track of their hours worked, especially if the employer had no reason to know that overtime was being worked.[90]

 

Another burden that falls on an employer is the obligations to prove that an allegedly “exempt” employee meets the criteria for exemption under the FLSA.[91]

 

Practice Pointers

 

Employers facing and FLSA claim or suit will be forced to take a close look at the adequacy of their record-keeping system.  The following list is derived from various court cases where record-keeping became an issue:

 

·        An employer violated the FLSA’s record-keeping rules when it failed to display required information on its payment records, failed to label information in such a way as to avoid confusion about the significance of particular record-keeping entries, and combined unrelated information into single entries in a false or misleading manner.[92]

·        A violation occurred where an employer falsified records to conceal employee overtime hours and destroyed certain records that would have revealed the falsification.[93]

·        As discussed earlier, an employer was ordered to pay $120,000 for failing to maintain accurate records of employees’ actual work hours during each work day and work week.[94]

·        An employer that asks employees to keep their own records of hours worked does so at its own risk, and cannot thereby escape its FLSA record-keeping obligations.[95]

·        Requiring employees to complete certain tasks, but telling them to record their own hours, resulted in employees not being paid for all hours worked.[96]

 

Periodically asking employees to verify the accuracy of an employer’s records may bar a subsequent FLSA claim that the records did not accurately reflect all hours worked.  One area of possible concern to chiefs might be whether their administrative or clerical assistants have been properly paid.  Permitting such employees to work through their lunch periods, or to come in early and/or leave late, may result in FLSA exposure.

 


 



[1] Maryland v. Wirtz, 392 U.S. 183 (1968)

 

[2] National League of Cities v. Usery, 426 U.S. 833 (1976). 

 

[3] Garcia v. San Antonio Metropolitan Transit Authority, 469 US 528, 105 S. Ct. 1005 (1985).

 

[4]FLSA, 29 CFR 778. §7A.

 

[5]28 CFR 778.107 and 29 CFR 778.108.

 

[6]February 25, 1994

 

[7] Featsent v. City of Youngstown, 2 WH Cases 2d 1967 (6th Cir 1995)

 

[8] Id.

 

[9] Id.

 

[10] Id.

 

[11] Id.

 

[12] Dillion v. North States Power Company, 75-1612, 22 WH cases (BNA) 1187 8th Cir. 1976. 

 

[13] 29 CFR §785.35.

 

[14] 29 CFR §785.38

 

[15] Walling v. Mid-Continent Pipeline Co., 143 F.2d 308 (CA 10, 1944)

 

[16]Fair Labor Standards Act, 29 U.S.C. §207(o)

 

[17]29 C.F.R. §553.23

 

[18] 29 C.F.R. §553.23(c)

 

[19] 29 C.F.R. §553.23(a)

 

[20] 29 C.F.R. §553.23(c)

 

[21] 29 C.F.R. §553.23(c)(2)

 

[22] Wage and Hour Opinion Letter, April 1, 1994

 

[23] 29 C.F.R. §553.23(a)(2)

 

[24] Ibid.

 

[25] Heaton v. Moore, 43 F.3d 1176 (8th Cir. 1994) cert. den. 115 S.Ct. 2249 (1995)

 

[26] Christenson v. Harris County, No. 98-1167.

 

[27] 29 U.S.C §207(o)(5)

 

[28] Wage and Hour Opinion Letter, August 19, 1994

 

[29] Wage and Hour Opinion Letter, August 19, 1994; see also, Barrentine v. Arkansas Best-Freight System, 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981)

 

[30] 29 C.F.R. §553.27(b)

 

[31] See House Report 99-331, 99th Cong. 2nd Sess 21 1985

 

[32] 29 C.F.R. §553.24(b)

 

[33] See M.G.L. c. 41, §108O

 

[34] Skidmore v. Swift & Co., 323 U.S. 134 (1944)

 

[35] See an analogous security guard case in Allen v. Atlantic Richfield Co., 724 F.2d 1131 (5th Cir. 1984)

 

[36] See D.O.L. Opinion Letter, September 4, 1987, regarding deputy sheriffs

 

[37] See Wage and Hour Opinion Letters of January 4, 1968, March 12, 1987, September 16, 1987, December 10, 1987, and November 3, 1988

 

[38] Norton v. Worthen Van Service, Inc., 839 F.2d 653 (10th Cir. 1988)

 

[39] Wage and Hour Administrator, Opinion Letter, November 16, 1988

 

[40] Wage and Hour Administrator, Opinion Letter, September 8, 1988

 

[41] Brown v. Allen Parish Police Jury 526 So.2d 1190, 29 Wage and Hour Cas. (BNA), 229 (La.Ct. App. 1988)

 

[42] Renfro v. City of Emporia, 729 F.Supp. 747, 29 Wage & Hour Cas. (BNA) 1049 (D.Kan. 1990)

 

[43] Wage and Hour Administration, Opinion Letter, March 12, 1987

 

[44] Kansas City Regional Wage and Hour Office, Opinion Letter, April 15, 1989

 

[45] Spires v. Ben Hill County, 745 F.Supp. 690,, 29 Wage & Hour Cas. (BNA) 1545 (M.D. Ga. 1990)

 

[46] 20 C.F.R., §553.14

 

[47] 29 C.F.R., §778.223

 

[48] Townsend v. The Mercy Hospital of Pittsburgh, No. 86-651 (W.D. Pa. 1988)

 

[49] 29 C.F.R. §541.1 and 541.101.

 

[50] Owens v. ITT-Rayonier, Inc., 30 Wage & Hour Cas. (BNA) 373, 1991 U.S. Dist.  Lexis 3810 (W.D. Wash. 1990)

 

[51] Andrews, v. Dubois, Civil Action No. 93-11338-NGY (May 1995).

 

[52] Reich v. New York Transit Authority, 45 F.3d 646 (2d Cir. 1995)

 

[53] Truslow v. Spotsylvania County Sheriff, 783 F.Supp. 274 (E.D. Va. 1992)

 

[54] Brooklyn Savings Bank v. O’Neil, 324 U.S. 697 (1945).

 

[55] 29 U.S.C. § 211(c); 29 C.F.R. Part 516.

 

[56] 29 C.F.R. §516.1(a)

 

[57] Wage and Hour Opinion Letters dated Oct. 26, 1993 and March 10, 1995.

 

[58] See, Record-keeping Requirements Under The Fair Labor Standards Act, Wage and Hour Division Fact Sheet No. 021.

 

[59] 29 C.F.R. §516.2(b).

 

[60] 29 C.F.R. §516.2(a)(1).

 

[61] 29 C.F.R. §516.2(a)(2).

 

[62] 29 C.F.R. §516.2(a)(3).

 

[63] 29 C.F.R. §516.2(a)(4).

 

[64] 29 C.F.R. §516.2(a)(5).

 

[65] 29 C.F.R. §516.2(a)(6).

 

[66] 29 C.F.R. §516.2(a)(7g).

 

[67] 29 C.F.R. §516.2(a)(8).

 

[68] 29 C.F.R. §516.2(a)(9).

 

[69] 29 C.F.R. §516.2(a)(10).

 

[70] 29 C.F.R. §516.2(a)(11).

 

[71] 29 C.F.R. §516.2(a)(12).

 

[72] 29 C.F.R. §553.50.

 

[73] 29 C.F.R. §516.5.

 

[74] 29 C.F.R. §516.6.

 

[75] 29 C.F.R. §516.7(a).

 

[76] 29 C.F.R. §5553.50(a).

 

[77] 29 C.F.R. §5553.50(b).

 

[78] 29 C.F.R. §5553.50(c).

 

[79] 29 C.F.R. §5553.50(d).

 

[80] 29 C.F.R. §553.51.

 

[81] Herman v. Palo Group Foster Home, 976 F.Supp. 696 (W.D. Mich. 1997).

 

[82] 29 C.F.R. §785.48(b).

 

[83] 29 C.F.R. §785.47; Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946).

 

[84] Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 66 S.Ct. 1187 , 90 L.E.2d 1515 (1946).

 

[85] See Arias v. United States Service Industries, Inc., 80 F.3d 509 (D.C. Cir. 1996).

 

[86] Id.

 

[87] See Myers v. The Cooper Cellar Corp., 192 F.3d 546 (6th Cir. 1999).

 

[88] Nowicki v. Forward Ass’n., 116 NYS 2d 766 (N.Y. 1952) citing Anderson.  See also, Reich v. Waldbaum, Inc., 833 F.Supp. 1037 (S.D.N.Y. 1993); citing Anderson.

 

[89] Bjornson v. Daido Metal U.S.A., Inc., 12 F.Supp.2d 837 (N.D. Ill. 1998).

 

[90] McKnight v. Kimberly Clark Corp., 149 F.3d 1125 (10th Cir. 1998).

 

[91] Elwell v. University Hospitals Home Care Services, 276 F.3d 832 (6th Cir. 2002); Murray v. Stuckey’s Inc., 50 F.3d 564 (8th Cir. 1995).

 

[92] Usery v. Goodwin Hardware, Inc., 426 F.Supp. 1243 (W.D. Mich. 1976).

 

[93] Mitchell v. Southwest Engineering Co., 271 F.2d 427 (8th Cir. 1959).

 

[94] Herman v. Palo Grove Foster Home, Inc., 976 F.Supp. 696 (W.D. Mich. 1997).

 

[95] Mitchell v. Reynolds, 125 F.Supp. 337 (W.D. Ark 1954).

 

[96] Hodgson v. General Motors Acceptance Corp., 347 F.Supp. 9 (S.D. Fla. 1972).

 


 

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