MMPA_s Overview of FLSA (3)

596225

11

Fair Labor Standards Act

&

Public Sector Employers

Presented by:

KATHRYN M. MURPHY

MURPHY, HESSE, TOOMEY & LEHANE, LLP

March 3, 2011

596225

These materials are not legal advice and should not be relied upon as such.

2

Agenda

 Overview of the Fair Labor Standards Act (“FLSA”)

 Highlight provisions of the FLSA as they apply to

employment relationships between the public sector

employer and public sector employee

 Highlight developing areas and areas of increased dispute

under the FLSA

596225

Agenda cont.

 In this program we will not be addressing the various Massachusetts wage and

hour laws, or how these various laws apply (or may be argued to apply) in

different public sector workplaces

 Some Massachusetts Laws to consider include the following:

M.G.L. c. 41, §§ 108A & 111H

M.G.L. c. 40, § 21A

M.G.L. c. 149, §§ 30, 31, 33-33A

M.G.L. c. 150E (and its preclusive effect)

M.G.L. c. 48, §§ 58B & 58C

M.G.L. c. 147, §§ 17B & 17C

M.G.L. c. 151, § 1A (Lemieux v. City of Holyoke, 2010 U.S. Dist. LEXIS 101872

(Sept. 28, 2010), and other Decisions have discussed

application of this Massachusetts Overtime Law to public

sector employees. The decisions to date have found that it

does not apply – stay abreast of the status)

These materials are not legal advice and should not be relied upon as such.

596225

Agenda cont.

 Please exercise caution in making wage and hour decisions

 Decisions call for fact intense inquiries and legal analysis

 Variations in regulations

 These materials highlight areas – not legal advise or

representative of all law in the areas

These materials are not legal advice and should not be relied upon as such.

596225

Interplay of Massachusetts Law, CBAs,

Other Laws or Agreements with FLSA

 The FLSA provides minimum standards that may be extended, but cannot

be waived or reduced

 FLSA does not trump or undo separate obligations under other State law(s),

CBAs, Agreements or other laws

 State law or a CBA, for instance, may require additional compensation, or

prohibit a practice permitted by FLSA

 Massachusetts timely payment of wage act expressly applies to public

sector employers

 Separately analyze obligations under other laws or agreements

 This presentation addresses FLSA obligations – Not other laws

596225

Overview of FLSA

 A Federal Wage and Hour Law

 Administered by the U.S. Department of Labor, Wage and

Hour Division (“DOL”)

 Website address: http://www.dol.gov/whd/

596225

Authority of the U.S. DOL

Wage Hour Division

 Authority to interpret the FLSA

 Authority to audit employers for compliance

 Authority to enforce the FLSA, and bring enforcement

actions against employers

596225

U.S. DOL cont.

 Promulgates regulations interpreting FLSA

 Regulations generally at 29 CFR §§ 500-800

 Publishes other sorts of guidance such as fact sheets, posters,

compliance assistance, and elaws

 Tutorials on website

596225

DOL Opinion Letters

 The DOL publishes Opinion Letters

 Opinion Letters are the DOL’s response to specific employer

inquiries

 Can provide useful guidance as to how a particular issue may

be viewed by the DOL

596225

FLSA Public Sector Regulations

Among its many regulations, DOL has published specific

regulations regarding how the FLSA applies to State and

local government employers at 29 CFR 553

596225

Application of the FLSA to

State and Other Public Employers

 Congress incrementally extended coverage of FLSA to State

and local government employees, as described in the statute

 In 1985, in the case of Garcia v. San Antonio Metropolitan

Transit Authority, the U.S. Supreme Court held that the FLSA

applies to state and local governments. 469 U.S. 528

 In 1999, in the case of Alden v. Maine, the U.S. Supreme

Court found that the States have sovereign immunity from

civil suits by their employees under the FLSA. 527 U.S. 706

596225

Application of the FLSA to

State and Other Public Employers cont.

FLSA not extended to cover individuals in government who

meet regulatory definitions of the following:

 “elected officials, their immediate advisors, and certain

individuals whom they appoint or select to serve in various

capacities.” 29 CFR 553.10

 Employees of legislative branches of state and local

governments

 A condition for exclusion is that an employee must not be

subject to civil service law of the employing State or local

agency

596225

Sovereign Immunity Applicable Only to

the State under the FLSA

 While it has been held that Sovereign Immunity prohibits

private civil action by employees against their State employer

under the FLSA, sovereign immunity has not been extended

to non-state public employers

 Non-state public employers (such as Cities, Towns or other

subdivisions) remain subject to suit under the FLSA by their

employees in private civil actions, and have not been

protected from suit based upon sovereign immunity

596225

FLSA Basics

 Sets minimum wage requirements

 Sets overtime requirements

 Generally does not mandate paid time off be provided, such as

vacation, sick, severance, holiday, etc.*

 Generally does not mandate lunch breaks or other types of breaks*

 Massachusetts has laws relative to payment for paid time off and

breaks

*See 2010 Amendment to require break time for Nursing Mothers

596225

FLSA Exemptions

 The FLSA classifies employees as either exempt or non-

exempt from the provisions of the Act

 Non-Exempt means subject to the requirements of the FLSA

 Non-exempt employees must be paid minimum wage for all

hours worked, and overtime at 1 ½ times the employee’s

“regular hourly rate” for work over 40 hours in a workweek

 Partial exemptions in the statute for some types of employees

596225

Non-Exempt Employees Qualifying for

FLSA Section 207(K) Overtime Rule

 Non-Exempt employees engaged in fire protection or law enforcement

activities

 Section 7(k) of the FLSA provides that with regard to public sector

employees “engaged in fire protection or law enforcement activities,”

public employers are permitted to adopt a work period for any period of

at least 7, but no more than 28 consecutive days for overtime purpose and

as set forth (and for reasons set forth) in the law. The work period has

different maximum hour requirements for overtime, as set forth in the

regulations

 7(k) is a form of exception to the rule that non-exempt employees in these

categories must be paid overtime for over 40 hours of work in a work

week, so long as all regulatory requirements are met for applying 7(k)

work period

596225

FLSA Section 207(K) cont.

 Overtime is not required to be paid in this 7(k) work time

period until the number of hours that the employee works in

the time period exceeds the ratio of 212 hours to 28 days for

fire related, or 171 hours to 28 days for law enforcement

officers

 Example: In a 7 day time period under 7(k), overtime is not

due until the fire protection employee works over 53 hours,

and in the case of law enforcement officers, until they have

worked over 43 hours in the 7 day period, as further

described in the regulations

596225

FLSA Section 207(k) cont.

 Employers must properly elect a 7(k) complaint time period, as discussed

later in this presentation, for the 7(k) overtime rules to apply

 Where a 7(k) election has not been made, the general rule applies that

overtime is required whenever the non-exempt employee works over 40

hours in the workweek

 When considering 7(k) election employers must separately consider any

Mass. Gen. L. Ch. 150E bargaining obligations. See City of Boston v.

Comm. Employment Relations Board, 453 Mass. 389 (2009) (holding

that in this case the FLSA did not preempt any separate 150E duty to

bargain over wages, hours, and terms and conditions of employment)

 7(k) referenced more below

596225

FLSA Includes 3 Major Categories of

Exempt Employees

 Bona fide Executive

 Bona fide Administrative

 Bona Fide Professional

596225

Testing for Whether an Employee Meets

an Exemption

Employee must generally meet both of the following:

 job duties and responsibilities of the employee must meet

the DOL regulatory definition of those associated with a

bona fide executive, administrative, or professional

employee, and

 employee must be paid the statutory prescribed salary and

be paid on a salary basis where applicable

596225

Considerations in Applying the

Exemption Tests

 The employer has the burden of showing the exemption

criteria are met

 Salary alone does not determine an employee’s exempt status

 Job titles alone do not determine exempt status

 Job descriptions alone do not determine exempt status

 Scrutinize job duties

 Engage in ongoing process of reviewing exempt status of

position and employee

596225

The Bona Fide “Executive”

All of the following must be met:

 Employee’s primary duty must be managing the enterprise, or managing a

customarily recognized department or subdivision of the enterprise; and

 Employee must customarily and regularly direct work of two or more

other full-time employees or their equivalent; and

 Employee must have authority to hire or fire other employees, or the

employee’s suggestions and recommendations as to the hiring, firing,

advancement, promotion or any other change of status of other employees

must be given particular weight; and

 Employee must be paid on a salary basis (as defined in regulations), at a

rate of at least $455 per week

596225

Executive Exemption cont.

 Does not apply to police, fire, rescue workers, EMTs, and

similar employees regardless of rank or pay, who are acting

as “first responders”

 Investigative work is not executive in nature even though at

scene of crime or accident directing other employees

596225

Job Titles Indicating Management as a

Primary Duty

 Job titles do not determine exempt executive status

(Manager, Supervisor, director, Department Head)

 Rank, alone, will not determine exempt executive status

 In all instances must be a factual analysis of actual job duties

596225

Executive Exemption Examples

 Police Sergeants and Police Chiefs have been found to be exempt

executives where they meet the criteria for exemption, according to

various case interpretations

 Required fact specific analysis of job functions

 Mullins v. City of New York, 523 F. Supp. 2d 339 (S.D.N.Y. 2007)

(holding police sergeants in this case were exempt executives); Murphy v.

Natick, 516 F. Supp. 2d 153 (D. Mass. 2007) (holding sergeants and

lieutenants exempt; O’Brien v. Agawam, 350 F.3d 279 (1st Cir.

2003)(sergeants, lieutenants and captain exempt)

596225

Executive Exemption Examples cont.

 Fire Deputy Chiefs and Fire District Chiefs have also been

found to be exempt executives, where they met the criteria for

exemption

 See Simmons v. City of Ft. Worth, 805 F. Supp. 419 (1992),

decided under former regulations and holding fire deputy

chiefs and fire district chiefs in these cases were exempt

executives

596225

Executive Exemption:

Department or Division Managers

 Apply the full test for exemption, including salary basis

 Primary duties as described in test

 Manage the work of two or more other full-time employees,

or their equivalent

 Regulatory role in decisions regarding other employees

change of status

596225

Executive Exemption:

Department or Division Managers cont.

Caution: pay particular attention when trying to apply this

exemption to second-tier managers or supervisors who may

not have the authority to direct enough people, or do not have

management as a primary duty, or whose authority or roles in

decisions as to change of status of other employees is not met

596225

“Primary Duty”

(See 29 CFR 541.700)

 Requires review of actual job duties and responsibilities

 How much time is spent managing versus performing the

production work of the department or division

 According to the regulations, the amount of time spent performing

exempt work can be a useful guide in determining whether exempt

work is the primary duty of an employee. The regulations provide

that employees who spend more than 50% of their time performing

exempt work will generally satisfy the primary duty requirement.

The regulations, however, also state that time alone, is not the sole

test and that nothing in the regulations requires an employee spend

more than 50% of their time in exempt duties

596225

Executive Exemption cont.

 determining the type of materials,

supplies, machinery, equipment or

tools to be used or merchandise to be

bought, stocked and sold;

 controlling the flow and distribution

of materials or merchandise and

supplies;

 providing for the safety and security

of the employees or the property;

 planning and controlling the budget;

 monitoring or implementing legal

compliance measures.

 interviewing, selecting, and training

of employees;

 setting and adjusting their rates of

recommending promotions or other

changes in status;

 handling employee complaints and

grievances;

 disciplining employees; planning the

work;

 determining the techniques to be used;

 apportioning the work among the

employees;

(Regulations at 29 CFR 541.10229 CFR 541.102 provides examples of job duties)

596225

Bona Fide “Administrative” Employee

To qualify, employee must meet all of the following tests:

 Primary duty must be the performance of office or non-manual

work directly related to management or general business

operations of the employer or the employers customers; and

 Employee’s primary duty must include the exercise of discretion

and independent judgment with respect to matters of significance;

and

 Employee must be paid on a salary basis, at a rate of at least $455

per week

596225

Functional Areas That May Involve

Management or General Business Operations

 Tax

 Finance

 Accounting

 Procurement

 Budgeting

 Auditing

 Insurance

 Quality control

 Purchasing

 Legal and regulatory compliance

 Advertising

 Marketing

 Safety and health

 Personnel management

 Human resources

 Employee benefits

 Labor relations

 Public relations

 Government relations

 Computer/internet/database

administration

596225

Exercise of Discretion and Independent

Judgment Required

Work in a Qualifying Functional Area Must Include Exercise

of Discretion and Independent Judgment with Regard to

Matters of Significance…………….

596225

Regulations Suggest Several Factors Be

Examined

 Does the employee have the authority to formulate, effect, interpret

or implement management policies or operations practices?

 Does the employee carry out major assignments in conducting the

operations?

 Does the employee perform work that affects business operations

to a substantial degree in the area?

 Does the employee have the authority to commit the employer in

matters that have significant financial impact?

596225

Regulations Suggest Several Factors Be

Examined cont.

 Does the employee have the authority to commit the

employer in matters that have significant financial impact?

 Does the employee have the authority to deviate from or

waive established policies and procedures without approval?

 Does the employee provide consultation or expert advice to

management?

596225

Regulations Suggest Several Factors Be

Examined cont.

 Is the employee involved in planning long or short-term

business objectives?

 Does the employee investigate and resolve matters of

significance on behalf of management?

 Does the employee represent the company in handling

complaints, arbitrating disputes or resolving grievances?

596225

Inspection or Investigative Work

 Under FLSA regulations, public sector employees

performing inspection or investigative work are not

performing exempt administrative job duties

 Fire prevention, safety, building and construction, and health

and sanitation are examples of the types of investigative work

the regulations state is not administrative

596225

Administrative Exemption cont.

 Skill and experience must be distinguished from discretion

and independent judgment required for exemption

 Applying known standards or prescribed procedures is not

exercising independent discretion and judgment

 Just a thought and a point of caution - if an employee in one

of these functional areas reports to a manager for supervision

in his or her work, it is not very likely this employee meets

the criteria?

596225

Bona Fide “Professional” Employee

The Learned Professional

To qualify as a “learned” professional, an employee must meet all of

the following:

 The employee’s primary duty must be the performance of work requiring

advanced knowledge, defined as work which is predominantly

intellectual in character and which includes work requiring the consistent

exercise of discretion and judgment; and

 The advanced knowledge must be in a field of science or learning; and

 The advanced knowledge must be customarily acquired by a prolonged

course of specialized intellectual instruction; and

 Unless otherwise stated in the regulations, the employee must be paid on

a salary basis (as defined in the regulations), at a rate of at least $455 per

week

596225

Teachers as Learned Professionals

 Teachers can be exempt if their primary duty is teaching, tutoring,

instructing or lecturing in the activity of imparting knowledge, and if they

are employed and engaged in this activity as a teacher in an educational

establishment, as defined in regulations

 According to DOL, exempt teachers can include, but are not limited to,

regular academic teachers; kindergarten or nursery school teachers;

teachers of gifted or disabled children; teachers of skilled and semi-

skilled trades and occupations; teachers engaged in automobile driving

instruction; aircraft flight instructors; home economics teachers; and

vocal or instrument music teachers

 The salary and salary basis requirements generally do not apply to bona

fide teachers. Having a primary duty of teaching, tutoring, instructing or

lecturing in the activity of imparting knowledge said to include, by its

very nature, exercising discretion and judgment. See regulations

596225

Bona Fide Professional Employee

Creative Professional

To qualify as a “creative” professional, an employee must meet all of

the following:

 Employee’s primary duty must be the performance of work

requiring invention, imagination, originality or talent in a

recognized field of artistic or creative endeavor; and

 In most instances, the employee must be paid on a salary basis (as

defined in the regulations), at a rate of at least $455 per week

596225

Creative Professionals

DOL identifies the following list of fields

where this exemption may apply:

 Music

 Writing

 Acting

 Graphic Arts

596225

Highly Compensated Employees

Variation on Duty Requirements

Highly compensated employees performing office or non-manual

work and paid total annual compensation of $100,000 or more (which

must include at least $455 per week paid on a salary or fee basis) are

exempt from the FLSA if:

 they customarily and regularly perform at least one of the duties

of an exempt executive, administrative or professional employee

identified in the standard tests for exemption

596225

“Blue Collar” Workers

 FLSA regulations provide that the exemptions apply only to

“white collar” employees who meet the salary and duties

tests set forth in the Part 541 regulations

 The exemptions do not apply to manual laborers or other

“blue collar” workers who perform work involving repetitive

operations with their hands, physical skill and energy, no

matter how highly paid they might be

596225

Computer Professional Exemption

To qualify for the computer employee exemption,

the following tests must be met:

 The employee must be compensated either on a salary or fee basis

(as defined in the regulations) at a rate not less than $455 per week

or, if compensated on an hourly basis, at a rate not less than $27.63

an hour;

 The employee must be employed as a computer systems analyst,

computer programmer, software engineer or other similarly skilled

worker in the computer field performing the duties described

below (see next slide)

596225

Computer Professional cont.

The employee’s primary duty must consist of:

 The application of systems analysis techniques and procedures, including

consulting with users, to determine hardware, software or system

functional specifications;

 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;

 The design, documentation, testing, creation or modification of computer

programs related to machine operating systems; or

 A combination of the aforementioned duties, the performance of which

requires the same level of skills

596225

The Salary Basis Requirement

 FLSA regulations provide specific criteria which can not be

varied from if an employee is to be considered to be paid on

a “salary basis”, as required for the various exemption tests

 Salary Basis rules vary a bit for public sector employees, to

create some flexibility, generally reflecting issues of public

accountability

596225

The Salary Basis Requirement cont.

 Intro Rule: employee will be considered to be paid on a

salary basis within the meaning of the regulations if the

employee regularly receives each pay period on a weekly, or

less frequent basis, a predetermined amount constituting all

or part of the employee’s compensation

Which amount can not be subject to reduction because of the

variations in the quality or quantity of the work performed,

which meets minimum salary requirements

 General rule states, salary must be paid in any week where any

work performed {See, however, and compare rule prohibiting

deductions for absences occasioned/caused by employer}

596225

The Salary Basis Requirement cont.

 Predetermined amount of compensation each pay period; meeting

minimum salary requirement in exemption

 Not subject to reduction on account of quality or quantity of work

 Any impermissible deductions from an employee’s salary will cause him

or her to fail the salary basis requirement for exemption

 Most executive, administrative and professional employees must be paid

on a salary basis to be exempt

 If employee’s are not paid on a salary basis, then he/she will be deemed

non-exempt from the FLSA regardless of whether or not their job duties

and responsibilities meet the requirements of the exemption

596225

Salary Basis:

Impermissible Deductions

 Deductions may be made when an exempt employee is absent from

work for one or more full days for personal reasons, other than

sickness or disability {See also additional rule applicable to public-

sector referenced below}

 Deductions may be made for absences of one or more full days

occasioned by sickness or disability, as set forth in regulations if

the deduction is made in accordance with a bona fide plan, policy,

or practice of providing compensation for loss of salary occasioned

for these reasons, as set forth in regulations. Where section

complied with employer is not required to pay any portion of the

employee’s salary for full-day absences for which the employee

received compensation under the plan, policy or practice

596225

Salary Basis:

Impermissible Deductions

 No deduction for absences occasioned by jury duty,

attendance as a witness, or temporary military leave, but may

offset any amounts received as jury or witness fees, or

military pay, for a particular week against salary due

 Result must be that employee still receives full salary, though

part may be from jury fee, for instance

596225

Salary Basis:

Impermissible Deductions

 Deductions from pay may be made for penalties imposed in good

faith for infractions of safety rules of major significance, as defined

by the regulations

 Deductions from pay may be made for unpaid disciplinary

suspensions of one or more full days imposed in good faith for

infractions of workplace conduct rules, as defined by the

regulations, Suspensions must be imposed pursuant to a written

policy applicable to all employees

596225

Salary Basis:

Impermissible Deductions

 Not required to pay full salary in the initial or terminal week of

employment

 May pay in proportion to time actually worked in initial or terminal week,

in accordance with regulations

 As further described in regulations - not required to pay full salary in

weeks in which exempt employee takes unpaid leave under the Family

Medical Leave Act. Rather, when an exempt employee takes unpaid leave

under the Family and Medical Leave Act, an employer may pay a

proportionate part of the full salary for time actually worked. For

example, if an employee who normally works 40 hours per week uses

four hours of unpaid leave under the Family and Medical Leave Act, the

employer could deduct 10 percent of the employee's normal salary that

week

596225

Salary in Week Where No Work is

Performed

 Regulations require salary be paid in any week where any

work is performed, with the exception of the deductions

permitted by the regulations

 Required in full in any week where any work is performed, at

all, subject only to regulatory permitted deductions

 If the full week absence is occasioned by the employer (as

opposed to the employee), the argument exists that the

employee should be paid the salary, even though there was

no work performed. But see discussion of public sector

furloughs

596225

Additional Regulations on Salary Basis and Permissible

Deductions For Public Sector Employees

29 CFR

§

541.710

An employee of a public agency who otherwise meets the salary basis

requirements of the regulations is not disqualified from exemption on the

basis that such employee is paid according to a pay system established by

statute, ordinance or regulation, or by a policy or practice established

pursuant to principles of public accountability, under which the employee

accrues personal leave and sick leave and which requires the public agency

employee's pay to be reduced or such employee to be placed on leave

without pay for absences for personal reasons or because of illness or injury

of less than one work-day when accrued leave is not used by an employee

because:

(1) Permission for its use has not been sought or has been sought and

denied;

(2) Accrued leave has been exhausted; or

(3) The employee chooses to use leave without pay

596225

Furloughs and Deductions from Salary

of Public Sector Employee

Deductions from the pay of an employee of a public agency

for absences due to a budget-required furlough shall not

disqualify the employee from being paid on a salary basis

except in the workweek in which the furlough occurs and for

which the employee's pay is accordingly reduced, if

regulatory requirements for finding a qualifying furlough,

and making a deduction for furlough time off are met.

See

29

CFR

§

541.710(b)

596225

Other No Work Issues - (for instance,

snow days)

 General Rule - An employee is not paid on a salary basis if

deductions from the employee's predetermined compensation

are made for absences occasioned by the employer or by the

operating requirements of the business. If the employee is

ready, willing and able to work, general rule is that

deductions may not be made for time when work is not

available.

 The regulations, however, generally do not prohibit an

employer from charging accrued time off banks

596225

Reducing the Leave Bank of a Exempt

Employee

 According to a DOL publication, an employer can substitute or

reduce an exempt employee’s accrued leave (or run a negative

leave balance) for the time an employee is absent from work, even

if it is less than a full day and even if the absence is directed by the

employer because of lack of work, without affecting the salary

basis payment, provided…

 the employee still receives payment equal to the employee’s

predetermined salary in any week in which any work is performed

even if the employee has no leave remaining

596225

Safe Harbor Policy For Addressing

Improper Deductions From Salary

 Improper Deductions can result in a complete loss of exempt status where

employee no longer qualifies as being paid on a “salary basis”

 As described in regulations, DOL has stated the FLSA exemption will not

be lost completely if (among other requirements) an employer has a

clearly communicated safe harbor policy that includes a complaint

procedure, in accordance with regulations

 Improper deductions must still be isolated or inadvertent, and must be

corrected, as described in regulations

 Inadvertent deductions are unintentional deductions

 Regulations outline criteria for safe harbor policy, etc.

596225

Other Laws and CBAs

 The FLSA provides minimum standards that may be exceeded, but cannot

be waived or reduced

 In addition to the FLSA, Employers must comply, for example, with any

Federal, State or municipal laws, regulations or ordinances establishing a

higher minimum wage or lower maximum workweek than those

established under the FLSA

 Employers may, on their own initiative or under a collective bargaining

agreement, provide a higher wage, shorter workweek, or higher overtime

premium than provided under the FLSA

 Collective bargaining agreements cannot waive or reduce FLSA

protections, however, nothing in the FLSA or the Part 541 regulations

relieves employers from their contractual obligations under such

bargaining agreements

596225

Overtime Requirements Under FLSA

596225

Break Time – 20 Minutes

596225

Overtime Under the FLSA

596225

Overtime Requirements Under the FLSA

 Under FLSA if an employee is not exempt (non-exempt), the

employee must be paid overtime for all time worked in

excess of 40 hours in a workweek

 Note: Mass law is not addressed here. To avoid overtime

requirements, employers must additionally ensure the

employee is exempt from overtime under any applicable

Massachusetts law

 Other Laws, CBA’s policies, etc., may provide for more

overtime than required by FLSA

596225

Overtime is Triggered By Hours Worked

 Under the FLSA, an employee is entitled to overtime when he or

she works in excess of 40 hours in a workweek

 Work time does not include paid time off such as sick, vacation,

personal or holidays where the employee does not work, as that

term is defined by the FLSA and regulations

 Work time generally does not include unpaid breaks of greater than

20 minutes (30 minutes is a recommended benchmark) where the

employee is relieved of all duties and allowed to leave the work

place. Breaks of 20 minutes or less are considered work time

regardless of whether or not the employee is relieved of all duties

and allowed to leave the workplace

596225

Overtime May be Different Under

Policy or CBA

 FLSA overtime arises when work time exceeds 40 hours

 Some policies include paid time off as work time in

determining when policy overtime is triggered, resulting in

more instances where overtime must be paid by policy

 CBAs may include paid time off as work time in determining

when an employee becomes entitled to overtime

596225

Hours Worked

 All time an employee must be on duty

 All time the employee must be on the employer’s premises

 All time the employee must be at a place prescribed by the

employer as his or her workplace

 All time the employee is suffered or permitted to work, i.e.

allowed to work.

596225

Hours Worked

Can include:

 Work at home

 Work before or after shifts

 Study time related to compensable training See - DOL Opinion

Letter 2009-15 discussing limits and compensability

 Changing Clothes See DOL Opinion Letter 2010-2 discussion

donning and doffing of clothing

596225

Hours Worked Cont.

 Waiting Time, where employee is engaged to wait

 Training or time spent in educational courses on behalf of employer

can be included in work time, as set forth in the regulations

 On-call time where criteria to be considered non-compensable work

time are not met

 Unauthorized work time that is permitted by a manager

 Telephone calls made for work, outside of work

 Checking emails

 Issues associated with carrying PDA devices

596225

Overtime Rate

 FLSA Overtime rate is 1.5 times the employees Regular Hourly

Rate of Pay

 “Regular Rate of Pay” is defined in the FLSA

 Regular rate of pay includes all compensation received by an

employee that is not specifically excluded by the Act

 Great deal of litigation involving regular hourly rate of pay, and

requiring public employers go back and recalculate overtime based

upon FLSA regular hourly rate of pay

596225

Regular Hourly Rate of Pay

 Definition of overtime rate in a CBA or policy does not trump

FLSA definition for purposes of determining FLSA overtime

 CBA or policy may require more overtime, and require overtime

be paid greater than required under the FLSA, but not less

 Can not reduce the amount of overtime due under FLSA

 Can not change the FLSA definition of regular hourly rate

 Calculation issues = compare CBA to FLSA

596225

Regular Rate of Pay to Be Used For

Calculating FLSA Overtime

Any “remuneration for employment paid to, or on behalf

of, the employee,” that does not fit into any of the statutory

exception at 29 U.S.C. § 207(e).

596225

Regular Rate: Examples of Items that

Have Been Included

 Shift Differential pay

 Educational Incentive pay (Quinn Bill or other types)

 Longevity pay

 Pay for completing a set period of Military Service

 Certain bonus payments (non-discretionary)

596225

Regular Rate: Examples of Items that

Have Been Included

 Community Service pay

 CompStat Technology pay (for use of the Comp-Stat Community

Policing Program)

 Assignment Differentials (extra compensation for special work, such as

Detectives, and EMTs)

 Personal Time Buy-Back pay (recent Massachusetts U.S. District Court

decision finds that it is included where, under the express terms of the

CBA, the bought back time is compensated at a higher rate than the

employee’s standard hourly rate, and thus considered “an incentive bonus

for employees who forgo taking personal days”) See Lemieux v. City of

Holyoke, 2010 U.S. Dist. LEXIS 101872 (D. Mass.)

596225

Regular Rate: Examples of Items that

Have Been Included

 Sick Leave Buy-Back pay (recent Massachusetts U.S. District Court

decision followed the 8

th

Circuit in Acton v. City of Columbia, 436 F. 3d

969 (8

th

Cir. 2006) and held that sick leave buy-back pay was like an

incentive bonus payment to employees for coming to work consistently.

But see Featsant v. City of Youngstown, 70 F.3d 900, 905 (6

th

Cir. 1995)

(holding that sick leave buy-backs are similar to payments made when no

work is performed due to illness, which is excluded from the regular rate)

 Stand-By pay

 Reimbursements for expenses incurred on the employer's behalf or where

the employee is required to expend sums solely by reason of action taken

for the convenience of the employer to be included if “disproportionately

large” to the expense incurred, the excess amount will be included in the

regular rate, or if the reimbursement is for expenses personal to the

employee, such as traveling to work, paying for lunch and the like

 On-call pay

596225

Regular Rate of Pay

 Scrutinize every type of compensation an employee is being

paid

 All compensation(s) must be included in regular rate for

FLSA overtime unless it is specifically excluded by statute or

interpreting regulation

 Consistently review regulations, law, and recent holdings

596225

Excess Overtime Paid Under Policy or

Agreement

 As descried in the regulations, excess overtime premiums

paid to an employee (though not required by FLSA) may in

some instances be creditable toward the employers FLSA

overtime liability

 Regulations are specific about where/when excess overtime

has been paid and can be credited

 Carefully scrutinize regulations and practices in this area

596225

207(k): Variation for Calculating When

Overtime is Due To Specified Employees

 While most fire protection and law enforcement employees

will be non-exempt and required to be paid overtime, the

FLSA recognizes that fire protection and law enforcement

personnel often have less typical work hours and

workweeks…..

 FLSA has created a rule applicable to “fire protection or law

enforcement” in “public agencies” which provides public

sector employers some relief in dealing with these less typical

work hours, work weeks, and overtime

596225

207(k)

 Provides employer has not violated the maximum hours worked

requirements for overtime under the FLSA (40 hours) as long as

police or fire employees work an aggregate of less than 212 hours

in 28 days for fire-related employment and 171 hours to 28 days

for law enforcement officers, where a compliant schedule and

other FLSA requirements for application are met, including a

proper election to apply this section of the law, instead of the

regular 40 hour rule

 To use a 7(k) work period, an employer must have a compliant

schedule and make the proper election in advance of work being

performed, as described in the Act, regulations and cases

596225

FLSA 207(k) cont.

7(k) alternative overtime work schedule and requirements is available to “public

agencies” and to those employees in the public agency who are engaged in “fire

protection or law enforcement”

 Cities and Towns

 Correctional officers are law enforcement; dispatchers are not (Baker v. Stone

Cnty., Mo., 41 F.Supp. 2d 965 W.D. Mo. 1999)

 Civilian workers in departments do not qualify for 7(k)

 Can apply to Paramedics and EMTs who respond to fires and are considered fire

protection (Justice v. Metro. Gov’t of Nashville, 4 F.3d 1387 (6

th

Cir 1993); Bond

v. City of Jackson, 939 F2d 285 (5

th

Cir. 1997). But see Cleveland v. City of Los

Angeles, 420 F.3d 981(9

th

Cir. 2005)(if not routinely engaged in fire suppression,

then 207(k) inapplicable).

596225

207(k) – Fire Protection Defined

 Regulatory Tests

 Fire Protection Activities as defined in regulations (29 CFR § 553.210)

 Employed by organized fire department or fire protection district

 Trained to extent required under state law

 Who has legal authority to engage in prevention, control or

extinguishment of fire and

 Who performs activities required for and directly concerned with

prevention, control or extinguishment of fires (including fire inspections)

 Not included- dispatchers, maintenance workers (i.e., “civilian”

employees of department or district)

596225

207(k) –Law Enforcement Defined

 Law Enforcement Activities as defined in regulations(29 CFR

§ 553.211)

 Unformed or plainclothes

 Empowered by state statute to enforce laws

 Has power to arrest

 Undergone law enforcement training

596225

207(k) – Ambulance Employees as Fire

Protection or Law Enforcement

 Regulations- Ambulance employees are covered if:

 Activities substantially related to firefighting or law

enforcement, as defined in regulations (29 CFR §

553.215)

 Received training in rescue of fire or crime victims, or

rescue of law enforcement or firefighters, and

 Are regularly dispatched to fires, crime scenes,

accidents, etc.

596225

207(k): Position Related to or Supporting

Fire Protection or Law Enforcement

 DOL states 7(k) does not apply to administrative employees in fire or police

departments

 DOL states it does not apply to dispatchers in departments

 Limited application. Must fall within specific statutory definition of public

employee meeting criteria for varied schedule.

 Regulatory examples of where 207(k) does not apply:

 (1) Building inspectors (other than those defined in § 553.213(a));(2) Health

inspectors; (3) Animal control personnel; (4) Sanitarians; (5) civilian traffic

employees who direct vehicular and pedestrian traffic at specified

intersections or other control points; (6) Civilian parking checkers who patrol

assigned areas for the purpose of discovering parking violations and issuing

appropriate warnings or appearance notices; (7) Wage and hour compliance

officers; (8) Equal employment opportunity compliance officers; (9) Tax

compliance officers; (10) Coal mining inspectors; and(11) Building guards

whose primary duty is to protect the lives and property of persons within the

limited area of the building, dispatchers, alarm operators, apparatus and

equipment repair and maintenance workers, camp cooks, clerks,

stenographers

596225

207(k): Otherwise Exempt Positions

207(k) does not preclude the applicability of other section

207 exemptions (such as administrative, executive, etc.). See

29 CFR § 553.216

596225

207(k) cont.

 Meaningful FLSA option, if properly applied and elected.

 No overtime violation under FLSA for not paying overtime

for hours worked in excess of 40 in a work week if the

municipality adopts and elects to pay overtime in accordance

with a compliant 7(k) schedule for eligible employees, and

pays in accordance with 7(k) requirements.

 Election of a 7(k) work period for FLSA can implicate

bargaining obligations under Mass Labor Relations Act,

Chapter 150E. Check obligations under 150E. See City of

Boston case referenced on other slides

596225

207(k): Compliant Schedule

 No overtime violation under FLSA if the municipality elects

7(k), adopts a compliant schedule and complies with

requirements. 29 CFR § 553.230

 Compliant schedule:

 Work period of 7 to 28 days

 Overtime only in excess of 212/28 (or equivalent ratio of

total hours worked/work period) for fire

 Overtime only in excess of 171/28 (or equivalent) for

police

596225

207(k) – 29 CFR553.230

Maximum Hours Standards

 Work period (days) Maximum hours standards

 Fire protection Law enforcement

 28 212 171

 27 204 165

 26 197 159

 25 189 153

 24 182 147

 23 174 141

 22 167 134

 21 159 128

 20 151 122

 19 144 116

 18 136 110

 17 129 104

 16 121 98

 15 114 92

 14 106 86

 13 98 79

 12 91 73

 11 83 67

 10 76 61

 9 68 55

 8 61 49

 7 53 43

596225

207(k)

Regulation Example:

 Section 7(k) permits public agencies to balance the hours of work

over an entire work period for law enforcement and fire protection

employees. For example, if a firefighter's work period is 28

consecutive days, and he or she works 80 hours in each of the first

two weeks, but only 52 hours in the third week, and does not work

in the fourth week, no overtime compensation (in cash wages or

compensatory time) would be required since the total hours worked

do not exceed 212 for the work period. If the same firefighter had a

work period of only 14 days, overtime compensation or

compensatory time off would be due for 54 hours (160 minus 106

hours) in the first 14 day work period.

 29 CFR § 553.23

596225

207(k)

 First Circuit/Massachusetts law:

 “[t]he work period requirement is ordinarily not a high

hurdle.” O'Brien v. Town of Agawam, 350 F.3d 279, 291

n.21 (1st Cir. 2003) (overruled on other grounds by 14

Penn Plaza LLC v. Pyett, 129 S. Ct. 1456, 1463, 173 L.

Ed. 2d 398 (2009)). “Virtually any bona fide, fixed,

recurring period of between 7 and 28 days will suffice.”

Id.

596225

207(k)

 First Circuit law:

 Essentially, public employers can establish a 207(k) work

period either by declaring their intent to do so or simply

by demonstrating that their employees “actually work a

regularly recurring cycle of between 7 and 28 days.”

 Lemieux v. City of Holyoke, 2010 U.S. Dist. LEXIS

101872 (Sept. 28, 2010) (referencing Calvao v. Town

of Framingham, 599 F. 3d. 10, 13 (1

st

Cir. 2010))

596225

207(k)

 Calvao v. Framingham, 599 F.3d 10 (1

st

Cir. 2010)

 No express way under the law to adopt a 207(k) qualifying work

period

 Framingham adopted it by sending a memo to town counsel, HR

director, police and fire chiefs (no evidence of notice to union or

individual union member):

 “Pursuant to section 207(k) of the Fair Labor Standards Act

and 29 C.F.R. Part 553, the declared work period for Police

and Fire regular shifts is 24 days. This declaration is

effective with work periods commencing April 13, 1986.”

596225

Cases Discussing 207(k)

 O’Brien v. Agawam, 350 F.3d 279 (1

st

Cir. 2003)

 207(k) NOT met because evidence showed town

employed officer on a 6 day cycle, thus not meeting the

requirements of 207(k)

 6 day schedule explicit in CBA. No other documents

or statements showing intent of town to adopt 28 day

schedule.

596225

Mass Labor Relations under Chapter

150E and 207(k) Pay Period

 See City of Boston v. Comm. Employment Relations Board,

453 Mass. 389 (2009): City decided to adopt a 28/171

schedule. Union demanded bargaining as part of process to

bargain over successor contract, city refused but offered to

impact bargain. Held on these facts that the FLSA did not

preempt MGL Chapter 150E bargaining requirements

 City Required to bargain 7(k) election for Chapter 150E

purposes

596225

Paying for Overtime

596225

Compensatory Time Off –

Public Sector Employer Option

 Rule is overtime must be paid in cash

 The FLSA permits Public sector employees be given a compensatory time earned

at the rate of time and one half in lieu of payment for overtime hours, limited as

set forth in the FLSA, if regulatory requirements for paying overtime with comp

time are met. See 29 USC § 207(o)(5).

 Before deciding to pay overtime with Comp time, a public agency must consider

several factors, such as:

 Terms of any CBA

 If Comp time would be consistent with any separate Massachusetts State law

requirements

 If there is compliance with FLSA to provide comp time – regulatory requirements

are met

596225

Comp Time – Agreement in Advance

 Municipality and employees must have a “mutual understanding” with employee that

comp time applies to the work relationship and payment of overtime, in advance of

paying overtime with comp time

 CBA or other representative – where employees have a representative the

agreement must be between the representative and the public agency, as set

forth and compliant with the regulations (ex. in MOA or CBA or other

writing)

 For non union employees, must have an understanding prior to performance

of work

 Need not necessarily be in writing with the employee, but agreement

must be recorded and kept, which essentially means it must be

documented somewhere. Strongly recommend a writing with employees

 No requirement in the FLSA or regulations that all employees must have

an identical agreement.

596225

Comp Time – Maximum Accrual

 Amount of Comp time an employee may earn is capped. 29 USC §

207(o)(3).

 After these limits, either time off must be given or overtime paid

 240 for “regular” employees

 480 for public safety, emergency response, or seasonal

employees, as defined in the regulations in this context

 Comp time payments = hours of comp time x regular rate at the

time the employee receives the payment.

 If terminated, comp time paid at either final regular rate or

average rate of last 3 years, whichever higher, as defined in

regulations

596225

Comp Time

 Employees who request use of comp time must be allowed to use it within a

“reasonable period” that does not “unduly disrupt” operations. 27 CFR §

553.25

 (1) Whether a request to use compensatory time has been granted within a

"reasonable period" will be determined by considering the customary work

practices within the agency based on the facts and circumstances in each case.

Such practices include, but are not limited to (a) the normal schedule of work,

(b) anticipated peak workloads based on past experience, (c) emergency

requirements for staff and services, and (d) the availability of qualified

substitute staff.

 For an agency to turn down a request from an employee for compensatory

time off requires that it should reasonably and in good faith anticipate that it

would impose an unreasonable burden on the agency's ability to provide

services of acceptable quality and quantity for the public during the time

requested without the use of the employee's services.

 “Mere inconvenience” to the employer is insufficient as a basis to deny an

employee’s request for comp time.

596225

Overtime Hours

Second Jobs – Same Public Employer

 Combine hours in both jobs, unless a specific regulatory exception

applies

 In general, where an employee in a single workweek works at two or

more different types of work for which different straight-time rates have

been established, the regular rate for that week is the weighted average of

such rates, in accordance with regulations (29 CFR 778.419)

 That is, the earnings from all such rates are added together and this total

is then divided by the total number of hours worked at all jobs. In

addition, section 7(g)(2) of the FLSA allows, under specified conditions,

the computation of overtime pay based on one and one-half times the

hourly rate in effect when the overtime work is performed. The

requirements for computing overtime pay pursuant to section 7(g)(2) are

prescribed in the regulations, generally at 29 CFR 778.415 through

778.421

596225

Second Job - Sporadic

 If a municipal employee works only “occasionally” or

“sporadically” on a part time basis for the same agency in a

“different capacity” the hours worked are not combined with

the first job for purposes of overtime. 29 CFR § 553.30

 Sporadic- infrequent, irregular, scattered, defined in

regulations

 Employee must be free to refuse the assignment

 Different capacity- look at the dictionary of occupational

titles and regulations

 Among other things, if work occurs on a regular basis or as

part of job duties it is not sporadic

596225

Second Job-Sporadic cont.

29 CFR 553.30(b)(3)

Example provided in regulations:

Typically, public recreation and park facilities, and stadiums or auditoriums

utilize employees in occasional or sporadic work. Some of these employment

activities are the taking of tickets, providing security for special events (e.g.,

concerts, sports events, and lectures), officiating at youth or other recreation

and sports events, or engaging in food or beverage sales at special events,

such as a county fair. Employment in such activity may be considered

occasional or sporadic for regular employees of State or local government

agencies even where the need can be anticipated because it recurs seasonally

(e.g., a holiday concert at a city college, a program of scheduled sports

events, or assistance by a city payroll clerk in processing returns at tax filing

time). An activity does not fail to be occasional merely because it is recurring.

In contrast, for example, if a parks department clerk, in addition to his or her

regular job, also regularly works additional hours on a part-time basis (e.g.,

every week or every other week) at a public park food and beverage sales

center operated by that agency, the additional work does not constitute

intermittent and irregular employment and, therefore, the hours worked

would be combined in computing any overtime compensation due.

102

596225

Second Job-Sporadic cont.

29 CFR 553.30(c) (3) – (4)

Example from regulations continued:

 a public park employee primarily engaged in playground maintenance

also from time to time cleans an evening recreation center operated by the

same agency, the additional work would be considered hours worked for

the same employer and subject to the Act's overtime requirements

because it is not in a different capacity

 a bookkeeper for a municipal park agency or a city mail clerk

occasionally referees for an adult evening basketball league sponsored by

the city, the hours worked as a referee would be considered to be in a

different general occupational category than the primary employment and

would not be counted as hours worked for overtime purposes on the

regular job

 A person regularly employed as a bus driver may assist in crowd control,

for example, at an event such as a winter festival, and in doing so, would

be deemed to be serving in a different capacity

103

596225

Second Job – Volunteer Work

 Persons performing volunteer services (as defined by

regulations) for state and local governments not regarded as

employees. 29 CFR § 553.101

 Volunteer only if services offered freely and without

coercion, without expectation of compensation

 An employee may not volunteer to perform the same type

of services for the same public agency he works for

596225

Second Job-Volunteer Work

 Examples given of an individual performing services which

constitute the "same type of services" is a nurse employed by a

State hospital who proposes to volunteer to perform nursing

services at a State-operated health clinic which does not qualify as a

separate public agency. Similarly, a firefighter cannot volunteer as a

firefighter for the same public agency.

 Examples given of volunteer services which do not constitute the

"same type of services" include: A city police officer who

volunteers as a part-time referee in a basketball league sponsored

by the city; an employee of the city parks department who serves as

a volunteer city firefighter; and an office employee of a city

hospital or other health care institution who volunteers to spend

time with a disabled or elderly person in the same institution during

off duty hours as an act of charity.

105

596225

FLSA: Mandatory Break Time for

Nursing Mothers

 FLSA amended in 2010 to require employers to provide

“reasonable break time for an employee to express breast

milk for her child for 1 year after the child’s birth each time

such employee has a need to express milk”

 Provide breaks of reasonable duration and frequency to

express milk – no statutory limit

 Employer must provide private place, which may not be the

bathroom

 Employers of less than 50 employees may be exempt IF they

can show the breaks would cause an undue hardship

596225

Record Keeping

 The FLSA and regulations have very specific requirements

regarding the types of records that must be kept regarding

employee and employee work hours

 Incorrect records are non-compliant records

 Records must be available for inspection

 See regulations for further discussion

596225

Examples of Major Topics in

Recent Litigation

 Class action suits

 Suits for inclusion of various benefits into the regular rate,

 Attempts to classify Sergeants and Lieutenants, and other supervisors as

exempt

 Misclassification Cases

 Application of Massachusetts Overtime Law Chapter 151, Section 1A

 Work time – inclusion of prep work

 Opinion Letter – paying for study time related to compensable training

596225

Examples of Major Topics in

Recent Litigation cont.

 Definition of work time

 Creditable excess overtime

 Election of 7k pay period

 Compliant 7k schedule

 Use of comp time, where permitted – unduly disruptive

issues

 Definition of “Detail” work

596225

DOL Audits

 The DOL has the authority to audit workplaces for FLSA

compliance

 Be prepared…….

596225

Next Steps

 Review wage and hour practices

 Check for compliance with FLSA, CBA, and any State law

or other laws that apply

 Train managers on the importance of complying with

record keeping requirements, controlling work time, etc.

 Read regulations and obtain legal advice.

596225

Questions

596225

Quincy Boston Springfield

Crown Colony Plaza 75 Federal Street One Monarch Place

300 Crown Colony Drive Suite 410 1414 Main Street 1310R

Quincy, MA 02169 Boston, MA 02210 Suite 1310R

Springfield, MA 01144

Tel: (617) 479-5000 Tel: (617) 479-5000 Tel: (888) 841-4850

Fax: (617) 479-6469 Fax: (617) 338-1324 Fax: (617) 479-6469