In the latest decision concerning the
application of Fair Labor
Standards Act to Massachusetts public safety officers, Judge
Stearns of the U.S.
District Court for the District of
Massachusetts ruled on which
payments must be added to the overtime rate; whether details
performed for a public employer must be paid at the overtime
rate; whether certain superior officers are exempt from the
FLSA; and how the employer calculates the damages it owes
for FLSA violations. The results, from a public safety union
standpoint, were mixed. The case is Murphy v. Town of Natick,
CA#04-11996-RGS (D.Mass. Sept. 25, 2007)
The FLSA guarantees that most employees, including public
sector employees, receive 1.5 times their “regular rate” (or base pay)
for hours actually worked beyond 40 in a 7-day pay period. Section
207(k) of the FLSA permits public safety employers to elect a different
overtime threshold specifically for police and fire employees – the range
is from 43-hours/7-days to 171-hours/28 days for police and 53 hours/7
days to 212 hours/28 days for fire fighters. This is commonly known as
the §207(k) or §7(k) partial overtime exemption.
Most public safety unions have negotiated
collective bargaining
agreements that provide better overtime benefits than the FLSA,
for instance in terms of hour rate, daily overtime, and minimum
payments, under most circumstances. In limited situations, however,
the FLSA provides a better benefit than the contract, and numerous
unions have taken employers to court to obtain those statutory entitlements.
First, the Court ruled that the federal
overtime rate for police officers MUST
include shift differentials, education incentive, assignment differentials, and
community services, but not in-service training stipends. (Please note that
these payments must be included only when the FLSA compels the payment
of overtime and not necessarily when the union contract does. Normally,
union contracts require overtime pay for many hours that are not deemed
overtime-eligible by the FLSA and may use an overtime rate that does not
include wage supplements.)
Second, the Court ruled that details for
any town department, such as the
recreation department, DPW, and the schools, are considered “hours worked”
under the FLSA and must be paid at FLSA overtime rate (instead of the lesser
detail rate) if they are worked beyond 40 hours. (If the detail rate is greater
than
the FLSA overtime rate, then the detail rate applies.) Judge Stearns’ decision
has two highly controversial features involving the application of the FLSA to
superior officers and the calculation of damages owed by the Town. First,
Judge Stearns appeared to rule that superior officers are by definition exempt
from the protections of the Fair Labor Standards Act. “Executive” employees
are exempt from the entitlement to overtime under federal law and are defined
as employees who a) are paid on a salary basis of at least $455 per week; b)
have a primary duty of managing the workplace; c) customarily and regularly
direct the work of two or more other employees; & d) have the authority to hire
or fire other employees or whose suggestions and recommendations in this
regard “are given particular weight.”
Under regulations issued by the Department
of Labor in 2004, this exemption
does not apply to
police officers, detectives, deputy sheriffs, state troopers,
highway patrol officers, investigators, inspectors, correctional officers,
parole or probation officers, park rangers, fire fighters, paramedics,
emergency medical technicians, ambulance personnel, rescue workers,
hazardous materials workers and similar employees,
regardless of rank or pay level, who perform work such as preventing,
controlling or extinguishing fires of any type; rescuing fire, crime or accident
victims; preventing or detecting crimes; conducting investigations or
inspections for violations of law; performing surveillance; pursuing,
restraining and apprehending suspects; detaining or supervising suspected
and convicted criminals, including those on probation or parole; interviewing
witnesses; interrogating and fingerprinting suspects; preparing investigative
reports; or other similar work.
29 CFR 541.3 (emphasis added). Judge
Stearns interpreted this regulation
narrowly as applying only to officers in the “rank” of detective (detective, as
most
people know, is an assignment rather than a “rank”). This interpretation, to us,
flies in the face of the regulation’s plain language, which already lists
detectives
and all other titles, and the purpose of the exemption. We interpret the
regulation
as protecting superior officers who engage in actual police work (such as a
patrol supervisor or ranking detective) and exempting only those superior
officers,
if any, who primarily supervise other employees or handle administrative tasks.
The 2004 regulations also added a
requirement that executive employees, to be
exempt from the FLSA, must possess the authority to hire or fire employees or to
effectively recommend such actions. In Natick, the Judge found that
“superior
officers play an influential role in the process by evaluating and interviewing
new
hire candidates as well as candidates for promotion.” In many other communities,
superior officers play little, if any, role in personnel decisions and therefore
may be
protected by the FLSA.
In the second controversial aspect of the
decision, Judge Stearns ruled that the
Town may offset its liability by considering the amount of premium pay (in other
words, the one-half of the regular rate paid in addition to the regular rate) it
paid
that exceeded the overtime due under the FLSA and was required by the union
contract or some other requirement.. This is commonly known as the “premium
offset.” Plaintiffs and union advocates argue that the Town may only offset its
liability on a pay period-by-pay-period basis (For example, if the FLSA required
Officer Smith to receive $50 more during Week A, but the contract required the
Town to pay overtime premiums in excess of the FLSA of $30 for that week, the
Town could reduce its liability to $20 for Week A. But if the Town paid excess
premiums in Week B of $20, it could not use this excess payment to reduce its
Week A liability to $0). Taking its cue from the latest chapter in
O’Brien v. Town of Agawam case, another recent Massachusetts decision,
Judge Stearns agreed with the Town that it may apply a credit “regardless of
when the premiums were paid and when the overtime work occurred.”
Curiously, the issue of the §7(k)
exemption did not arise in Murphy, because
the Town conceded that it had not adopted any such exemption, thus supporting
the ruling of the U.S. First Circuit Court of Appeals in O’Brien v. Town of
Agawam
that, at least in police departments with a ‘4 and 2’ schedule, a §7(k)
exemption is
not automatic. A Town must take affirmative steps adopt §7(k) in order to
receive
its benefits.