Overtime

Overtime is required to be paid for all hours worked over 40 during a workweek. A workweek consists of seven consecutive 24-hour periods. Overtime pay is required at one and one-half the regular hourly rate for hours worked over 40.

The requirement to pay overtime at 40 hours per workweek can be modified for police and fire personnel. A complete exemption exists for bona fide executive, administrative or professional workers, or if the agency employs fewer than five employees. A partial exemption applies for police and fire personnel. (All exemptions are discussed below)

1. What Constitutes "Hours Worked"

Although "hours worked" is usually obvious, this issue is at the forefront of FLSA litigation today. Under the FLSA, employment is broadly defined to include all hours that an employee is "suffered or permitted to work" for the employer. 29 U.S.C. §203(g). This broad definition may require an employee to be compensated for time the employer does not otherwise intend to consider "working time."

The landmark case at the time regarding "hours worked," was Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680, in which the Supreme Court found that time spent walking from the entrance of a plant to their work stations and back was compensable. As a result of that case, $6 billion in FLSA lawsuits were filed, which prompted Congress to enact the Portal-to-Portal Act the next year in 1947.

The Portal-to-Portal Act eliminated from "hours worked" this travel time and other "preliminary" and "postliminary" activities. Generally, the Act does not affect pre- or post-liminary activities that are compensable by contract, custom or practice, or other work done at the employer's behest and for the employer's benefit.

There are several examples of current litigation involving "hours worked." The most common litigation involve "donning and doffing," "on-call time," "early relief," "k-9 pay," and "training time."

2. Donning & Doffing

In 1985, the U.S. Department of Labor ("DOL") issued an opinion letter stating that donning and doffing is not compensable unless made so by MOU or custom and practice. However, in 2005, the U.S. Supreme Court decided IBP Inc. v. Alvarez (2005) 126 S.Ct. 514, unanimously holding that time spent donning and doffing required protective gear and walking back and forth from the locker rooms to the production floor of a meat processing plant was working time.

The Court reached this decision because donning the safety gear was "integral and indispensable" to the employees' "principal activities." In addition, the Court held that donning and doffing itself is a "principal activity." Thus, under the FLSA's "continuous workday" rule, which requires compensation for all work between an employee's first and last "principal activity," the employees were entitled to compensation.

After the IBP decision, the DOL responded with an advisory memorandum attempting to outline its position in light of IBP. In its memorandum, the DOL attempts to make a distinction between those instances when an employer requires the donning and doffing to take place on the employer's premises, versus when it allows it to take place at home. The DOL concluded that that donning and doffing would be compensable if the employer required donning and doffing on the employer's premises, or when the nature of the job required it. However, this memorandum is not binding, but it entitled to some consideration by the courts.

In sum, any department that requires its employees to change clothes and gear up on the Department's premises must compensate for this time. In addition, when the nature of the work, such as law enforcement, requires employees to change clothes on the Department's premises the Department must also compensate employees for this time. Thus, either interpretation of the recent Department of Labor memorandum appears to indicate that donning and doffing must be paid.

The argument presently being made is that donning uniforms and protective gear is "integral and indispensable" to working as a peace officer, and should be compensated. Putting on the uniform is simply part of the continuum of force and is necessary to the principal work performed.

However, to date, there is no 9th Circuit precedent directly on point. There are several district court decisions, with differing results.

California Cases

Abbe v. City of San Diego (S.D. Cal. 2007) 2007 WL 4146696 - Officers not entitled to compensation because the law, employer, or nature of the work did not require on-site donning and doffing and the officers had the option and ability to change at home. Case is still before the District Court.

Maciel v. City of Los Angeles (C.D. Cal. 2008) 569 F.Supp.2d 1038 - Donning and doffing police gear integral and indispensable because done for the benefit of the employer, was required by the employer, and was "[f]or all practical purposes" required to occur at the assigned station; However, Plaintiffs had no damages. Case is on appeal before the 9th Circuit.

Martin v. City of Richmond (N.D. Cal. 2007) 504 F.Supp.2d 766 - Donning/doffing of uniform alone is not compensable, but protective gear may be compensable. Case is still before the District Court.

Lemmon v. City of San Leandro (N.D. Cal. 2007) 538 F.Supp.2d 1200 - Donning and doffing of police uniform compensable because necessary for police work and beneficial to employer, regardless of whether officers had the option and ability to change at home. Case settled in February 2009 for 20 minutes donning and doffing prospectively.

9th Circuit Cases, Outside California

Bamonte v. City of Mesa 2008 WL 1746168 (D. Ariz. 2008) - Officers not entitled to compensation because the law, employer, or nature of the work did not require on-site donning and doffing and the officers had the option and ability to change at home.

Dager v. City of Phoenix 2009 WL 531864 (D. Ariz. 2009) - (same).

Current Status: Bamonte, Maciel and Dager are currently pending before the Ninth Circuit. The Bamonte case is furthest along, with the briefing completed in December 2008.

3. On-Call Time

The fact that an employee must remain available for recall, in and of itself, does not require that on-call time be compensated. The general rule is employers must compensate workers for time spent "predominantly for the employer's benefit." Thus, 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. Armour & Co. v. Wantock (1944) 323 U.S. 126.

The DOL regulations 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." 29 C.F.R. §785.17.

Determining the compensability of on-call time involves a fact-specific, case-by-case analysis. While no one factor is decisive, courts routinely view each of the following factors in conjunction when determining compensability:

(1) terms of a collective bargaining or employment agreement;
(2) physical restrictions placed on an on-call employee;
(3) "response time," or the 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.

These factors are meant to determine the primary inquiry, that is, the amount of freedom enjoyed by the employee while on call, and whether this measure of freedom allows the on-call time to be effectively used by the employee for his or her own purpose.

Terms of a Collective Bargaining Agreement.
Courts look to agreements for guidance as to whether the parties indicate what restrictions are placed upon on-call employees.

Restrictions on Movement.
When an employer requires employees to remain in a fixed location while on call, compensation is almost always required. The DOL has stated that requiring an officer to remain at home and in uniform ready to immediately respond, requires compensation.

However, employees who are free to pursue personal interests, spend time with their families or carry on other businesses at home, 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, is not by itself enough to trigger a requirement for compensation. See Wage & Hour Opinion Letters of January 4, 1968, March 12, 1987, September 16, 1987, December 10, 1987 and November 3, 1988.

In fact, one court felt that wearing a beeper was something an employee could do to minimize the effect of the employer's restrictions. Norton v. Worthen Van Service, Inc. (10th Cir. 1988) 839 F.2d 653.

Response Time.
This factor involves both the amount of time the employer gives the employee to contact the employer and actually return to work. In short, where employers require a response within a very short period of time, there is a greater likelihood that on-call compensation will be required.

The DOL has indicated that EMTs who were required to report to work within 5 minutes were entitled to on-call compensation. See Wage & Hour Opinion Letter of November 16, 1988. However, a court held that water department employees who had an hour to respond (30 minutes for the foreman) did not have to be compensated. Gilligan v. City of Emporia (1992) 30 Wage and Hour Cas. 1539.

In addition, the geography of the community is also to 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. The DOL has indicated that a 7-minute response time for firefighters would not be too restrictive given that they worked in a very small rural community. Thus, the firefighters could actually pursue all in-town personal affairs without risking violating their employer's on-call policy.

By contrast, in a larger city, even a 15-20 minute response time requirement might trigger on-call time pay. In Spencer v. Hyde County (1997) 959 F.Supp. 721, the court compensated EMTs who worked on an island that required a 2 ½ hour ferry ride to return to work. The court found that the 5 minute return to work policy effectively restricted their ability to leave the island, and required compensation.

Returning Calls and Frequency of Calls.
If the employer allows the employee to ignore any percentage of calls, compensation is generally denied.

In addition, if the frequency of calls to the employee is significant, compensation is likely to be required. In Refro v. City of Emporia (10th Cir. 1991) 948 F.2d 1529, firefighters were entitled to compensation for their on-call time because the frequency of calls that they received, three to five hour-long calls per 24-hour on-call period, was burdensome. In Bartholomew v. City of Burlington (1998) 5 F.Supp.2d 1161, patrol officers were denied on-call pay since they were subject to call-backs less than once a week.

Actual Use of Time.
This factor is probably the most important, but is essentially a derivative of the others. If the court is convinced that the employees were able to use the on-call time for substantial personal projects and affairs, it is less likely to be compensable. In Spires v. Ben Hill County (1990) 745 F.Supp. 690, the court acknowledged the short response time required (10 minutes), and the high frequency of calls returned, but concluded that the two plaintiffs (EMTs) were still able to run their independent businesses while on call and still found time to enjoy personal hobbies. Thus, on-call pay was not required.

4. Early Relief
When officer relieve the previous shift prior to their scheduled starting time, the compensable hours worked is not ordinarily affected, as long as the early relief is voluntary on the part of the employees and does not constantly occur.

5. K-9 Pay
Officers who live with their dogs and spent off-duty time caring and maintaining their dogs, must be compensated for all reasonable time spent.

The amount of wages paid for K-9 care must be reasonable. In Leever v. City of Carson (9th Cir. 2004), the Ninth Circuit found that a $60 per week stipend meant to cover canine care expenses was not reasonable, despite the premium being negotiated between the city and the union. In order to be reasonable, the city must take into account the actual number of hours spent caring for the dog when deciding compensation.

6. Training Time

Time that an employee spends in training programs, lectures, labor-management committee meetings and safety meetings is not compensable if the following four criteria are met:
1) the training must be outside employees' regular work hours;
2) attendance must be voluntary;
3) the employee must do no productive work while attending the training; and
4) the program, lecture or meeting is not directly related to the employee's job.

Federal courts have stated that training is directly related to the employee's job if it aids the employee in handling his or her present job better.

In addition, an exception to the requirement to pay for training time exists if the employer establishes a program of instruction which corresponds to courses offered by bona fide learning institutions. Employees who attend these courses would not be entitled to compensation, despite the four criteria above being met.

7. Computation of Overtime Rate

While most people view the FLSA as applicable only to "overtime" payment, there are several other provisions within the FLSA that may subject public employers to liability, including proper computation of the overtime rate. Overtime pay equals one and one-half times the employee's "regular rate" of pay. Where disputes arise in this area is in calculating the correct "regular rate" of pay to determine what the overtime payment should be. The FLSA does not equate the "regular rate" as merely the employee's salary.

Pursuant to the FLSA, the regular rate includes "all remuneration for employment paid to, or on behalf of, the employee." Thus, there have been actions challenging virtually every benefit possible. Below are examples of what has been held to be required inclusions in determining the regular rate of pay:
• Shift differential pay;

• Longevity pay;

• Special assignment pay;

• Hazard pay;

• Educational incentive pay;

• POST Certificate pay

• On call pay;

• Bonus for quality of work;

• Lunch or meal expenses paid by employer; and

• Salary increases, including retroactive increases.

Items which, although are a part of remuneration paid to employees, have been held not to be required as part of the regular rate of pay include the following:

• Discretionary bonus;

• Holiday pay (if paid in the holiday pay period);

• Retirement contributions;

• Call-back pay;

• Health premiums;

• Uniform allowances;

• Tuition reimbursement;

• Automobile reimbursement.

8. Timeliness of Payment of Overtime

Public employers have lost millions of dollars by simply failing to timely pay overtime. In one significant case, the City of Los Angeles paid out fifty million dollars to its police officers for failing to timely pay their overtime after the riots which occurred in the aftermath of Rodney King. The FLSA requires an employer to pay overtime "as soon as

practicable." Courts have generally construed these requirements to require that overtime be paid on the regular payday following the pay period in which the overtime was worked. The only exception to this is where the amount of overtime compensation cannot be determined until sometime after the regular pay period. However, in such case, the overtime must be paid as soon as the employer can compute the pay and arrange for payment.

9. Payment and Usage of Compensatory Time

Until 1985, the FLSA provided employers with the right to provide compensatory time (comp time) off in lieu of monetary overtime compensation, at a rate of not less than one and one-half hours of compensatory time for each hour of overtime worked. 29 U.S.C. §207(o).

However, in 1985 amendments to the FLSA allowed for comp time only by agreement. An agreement can only be reached by negotiation with the employee, the employees' representatives, or through collective bargaining. If it was the employer's practice to pay existing employees comp time prior to April 1985, that practice evidenced an "agreement" permitting the payment of comp time.

Since comp time constitutes a legal liability for the employer, employees generally may accrue only 240 hours of comp time. However, public safety personnel may accrue up to 480 hours.

The FLSA requires that an employee who has accrued comp time and requests use of the time must be permitted to use the time off within a "reasonable period" after making the request if it does not "unduly disrupt" the operations of the agency. 29 U.S.C. §207(o)(5).

What constitutes "undue disruption" is unclear, and will likely depend upon the circumstances. However, it is clear that undue disruption is the only legitimate reason for denying comp time leave, and it means more than mere inconvenience to the employer. Also, the fact that the employer may have to pay overtime to a substitute employee is not a legitimate reason for denying leave.
In May 2000, the U.S. Supreme Court ruled that an employer can force an employee to use comp time. Christensen v. Harris County (2000) 120 S.Ct. 1655. In fact, the employer can even select the dates that it wants the employee to use. However, unfortunately for employees, the same is not true.

There has been extensive litigation regarding employers' obligations to grant comp time leave upon request. In Mortensen v. County of Sacramento (9th Cir. 2004) 368 F.3d 1082, the Ninth Circuit held that an employer's leave policy which resulted in an employee's leave request being denied since there were no leave openings, complied with its obligations under the FLSA. Even more troubling was the fact that the court held that a collective bargaining agreement which allowed the employer up to a year to grant comp time was not unreasonable.

Note: Keep in mind that the Mortensen case controls the minimum requirements under the FLSA. If your MOU requires the employer to allow use of comp time at the employee's option, the MOU will control. Also, if it has been past practice (since it was legally required until Mortensen) to allow the employee to decide when to use comp time, that practice must continue until the employer changes it through the meet and confer process. El Cajon Police Officers Association v. City of El Cajon (2006) WL 1359647.

Finally, upon separation of employment, an employee must be paid for unused comp time. Comp time must be paid at either the average regular rate received by the employee during the last three years, or the final regular rate, whichever is higher.