For Whom Does the Clock Tick Public Employers' Liability for Overtime Compensation Under Federal Law
| Publication year | 1994 |
| Pages | 34 |
| Citation | Vol. 63 No. 06 Pg. 34 |
63 J. Kan. Bar Assn. June/July, 34 (1994). FOR WHOM DOES THE CLOCK TICK PUBLIC EMPLOYERS' LIABILITY FOR OVERTIME COMPENSATION UNDER FEDERAL LAW
June/July, 1994
Copyright (c) 1994 by the Kansas Bar Association; Michael Jilka
INTRODUCTION
Persons employed in positions necessary to public safety, such as firefighters, law enforcement officials, and paramedics, work in a manner that is often antithetical to the ordered time frame of "normal" employment. Crime and disaster strike at unpredictable times and require prompt response. Public employers across Kansas and the rest of the nation accordingly must design compensation packages that take into account the nature of these jobs and conform to the applicable law. Otherwise, a public employer risks the potential of being subjected to costly liability, possibly jeopardizing its fiscal stability. Employees must likewise be cognizant of their rights or else run the risk of foregoing compensation to which they are entitled.
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The federal wage-hour law, known as the Fair Labor Standards Act (FLSA), [FN1] was enacted during the Depression to ameliorate the low wages, high unemployment, and long working hours that were prevalent at that time. The principal means used to achieve the FLSA objectives were the establishment of a minimum wage and a ceiling on the number of hours that can be worked in a workweek without payment of overtime compensation. This article discusses various aspects of employee entitlement to overtime compensation under the FLSA and the consequences of a violation.
II. FLSA COVERAGE OF PUBLIC EMPLOYERS
As originally enacted in 1938, the FLSA expressly exempted states and their political subdivisions from its coverage. This exemption was removed in 1966, when Congress amended the FLSA to include within the definition of "employer" the state and its political subdivisions operating certain schools, hospitals, nursing homes, railways or carriers. [FN2] Congress further expanded the FLSA in 1974 to cover virtually all state and local government employees. [FN3]
In National League of Cities v. Usery, the United States Supreme Court held unconstitutional under the Tenth Amendment the FLSA's extension to state and local governments when those entities were performing traditional governmental functions. [FN4] In an opinion by then Justice Rehnquist, the Court held that Congress had exceeded its authority under the Commerce Clause. Nine years later, the Supreme Court overruled Usery and the "traditional governmental functions" test in Garcia v. San Antonio Metro. Transit Auth.. [FN5] According to the Court, the political process protected the states against excesses in congressional exercise of power under the Commerce Clause. [FN6] Congress responded to Garcia by giving state and local government employers a grace period until April 15, 1986, before the FLSA became applicable. [FN7]
III. OVERTIME COMPENSATION REQUIREMENTS OF THE FLSA
The FLSA requires employers to pay overtime at one and a half times the employee's "regular rate" for hours worked [FN8] in excess of 40 per week. [FN9] Certain exceptions to the 40 hour workweek [FN10] are recognized that are pertinent to public employers. The first exception, known as the § 207(k) exception, [FN11] applies to public agencies that employ persons in fire protection or law enforcement activities. [FN12] This exception allows public agencies to calculate an employee's hours for overtime purposes according to "work periods" [FN13] of between 7 and 28 days rather than on a workweek basis. [FN14] The maximum hours an employee subject to the § 207(k) exception can work without collecting
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overtime compensation is set forth in the regulation found at 29 C.F.R. § 553.230. For example, if a law enforcement employer establishes a work period of 28 days under the § 207(k)(1) exception, it must pay its police officers a regular wage for the first 171 hours worked and overtime wages for hours worked in excess of 171. For employees engaged in fire protection activities, the employer must pay a regular wage for the first 212 hours worked and overtime wages for hours worked in excess of 212. [FN15]
Overtime worked by employees subject to the § 207(k) exception is to be compensated according to the exception, and not according to hours worked in excess of 40 per week. [FN16] The employer has the burden of proving by " 'clear and affirmative evidence' " that it has adopted a § 207(k) workweek exception. [FN17]
The § 207(k) exception is lost if employees spend more than 20 percent of their time in "nonexempt activities." [FN18] Such activities are those not performed as an incident to or in conjunction with fire protection or law enforcement activities. [FN19] The consequence to the employer of a miscalculation is that the normal 40 hour workweek rule is applied and the employee must be compensated for working overtime in accordance with the general rule of § 207(a). [FN20] Stated another way, the employer cannot average the number of hours worked over more than one workweek under § 207(a), while it has some flexibility to do so under § 207(k).
Ambulance and rescue service employees can fall within the § 207(k) exception if their work is "substantially related to firefighting or law enforcement activities." [FN21] The substantial relation test has two prongs. First, the public agency must show the employees have received training in the rescue of fire, crime, and accident victims. Second, the agency must show the employees are regularly [FN22] dispatched to fire, crime scenes, riots, natural disasters and accidents.
The first prong is readily ascertainable, [FN23] but what constitutes being "regularly" dispatched is less clear. The Eleventh Circuit recently articulated a series of factors to be considered in deciding what constitutes being regularly dispatched:
(1) the percentage of the [EMS] Service's total calls that are dispatches to fires, crimes, and automobile accidents; (2) the percentage of total EMT man-hours spent responding to dispatches to fires, crimes, and automobile accidents; and (3) the percentage of the total number of all fires, automobile accidents, and police calls that occur throughout the county to which the Service is dispatched. [FN24] An employer seeking to avail itself of the § 207(k) exception for its paramedics should note that separate tables control the compensation of firefighters and law enforcement personnel. [FN25] Since paramedics are dispatched incident to both firefighting and law enforcement functions, their classification is of great significance. A paramedic will wish to be classified as performing a law enforcement function, while an employer will wish to classify the paramedic as a firefighter. In determining which classification is applicable, courts focus on the number of hours spent in each type of activity as opposed to the percentage of calls falling into each classification. [FN26]
A second exception to the requirement of overtime for hours worked in excess of 40 in a week is known as the Belo [FN27] exception. [FN28] Under this exception, an employer can pay an employee a guaranteed salary for up to sixty hours of work per week without incurring liability for overtime compensation, provided that the regular hourly rate does not fall below the minimum wage and the employee receives compensation at one and a half times their regular hourly rate for hours worked in excess of 40. The Belo exception is very useful in situations where an employee has widely fluctuating hours on a regular basis. The Belo exception affords the employee the security of a regular weekly income and allows the employer "to anticipate and control in advance at least some part of its labor costs. [FN29] In order to qualify as a Belo plan, an employer's pay scheme must (1) be made pursuant to a bona fide individual contract or collective bargaining agreement; (2)
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the duties of the employee must "necessitate irregular hours of work"; (3) the contract must specify a "regular rate of pay" for the first forty hours and "compensation at not less than one and one-half times such rate" for all hours above forty; and (4) must provide a "weekly guarantee of pay for not more than sixty hours." [FN30]
The phrase "irregular hours of work" contemplates significant variations in work hours both below and above forty hours per week. [FN31] The variations below forty must result from work requirements, not vacations, holidays, illness, or personal reasons. [FN32] Situations in which an employee works an irregular number of hours according to a predetermined schedule do not satisfy the requirement. [FN33]
If the Belo requirements are not met, the employee must be compensated according to the general rule of § 207(a). [FN34]
A. On-Call Time
One of the issues that most commonly arises under the FLSA is compensating employees for time spent on-call. Public employers must be able to call upon the services of a sufficient number of employees to respond to emergencies as they arise. In towns across Kansas, however, public employers frequently do not have the luxury of employing sufficient numbers of persons on active duty at any given time to respond to all emergencies. They must make arrangements to call upon the services of off-duty employees in the case of an overload. Depending on the nature and degree of restrictions upon the employees, the time spent on-call may be compensable.
The test for determining whether on-call time is compensable under the FLSA is whether the " 'time is spent predominantly for the employer's benefit or for the employee's.' " [FN35] Application of the test " 'requires consideration of the...
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