What Should A Salary Be Divided By To Determine Hourly Rate

Today’s burning question: Our city calculates our hourly pay by dividing our salary by 56 hours, not 53 hours. In other words, our hourly rate for overtime purposes is calculated by dividing the weekly salary by 56 hours. Shouldn’t they use 53 hours since the FLSA states that is the maximum allowable number of hours per week for firefighters?

Answer: The FLSA allows an employer and an employee to agree to compensation in a number of ways: annual salary, monthly salary, bi-weekly salary, weekly salary, daily salary, hourly rate, piecework, commissions… in other words… virtually any way you can think of to pay someone is OK under the FLSA provided the parties agree and the employee receives at least minimum wage plus time and one-half for all hours worked over the statutory maximum. The statutory maximum for firefighters is 53 hours per week, which may be extended to as long as 212 hours in 28 days.

When an employee is paid by the hour and no additional compensation is provided (longevity pay, medic pay, etc.) the hourly rate is multiplied by 1.5 to determine the overtime rate. However, when an employee receives a salary, there is a secondary consideration: how many hours is the salary intended to compensate the employee for? The FLSA does not require an employer and an employee to limit the hours they intend the salary to cover to the statutory maximum. In fact it may be above or below the statutory maximum.

There are fire departments where a weekly salary is intended to cover 42 hours per week. There are others where the weekly salary is intended to cover 53 hours. There are still others where the weekly salary it is intended to cover 56 hours. There are fire departments where an annual salary is intended to cover 2756 hours of work, and there are others where the annual salary is intended to cover 2912 hours. These are examples and by no means the only options the parties have. It all comes down to the intent of the parties.

Answering a question such as yours is a lot easier when the parties take the time to specify in writing the hours that the salary is intended to compensate. Examples where this information may be found include collective bargaining agreements, salary ordinances, or payroll policies.

The problem is that when the intent of the parties is not entirely clear, disputes may arise. The salary ordinance may conflict with the collective bargaining agreement, or the payroll policy may conflict with the employer’s actual practice. Maybe none of it is in writing and no one has paid much attention to the issue for several decades. The firefighters will argue the salary should be divided by 53 hours/week…. or 2756 hours/year while the city will argue it is 56 hours/week or 2912 hours/year. The FLSA does not dictate which of these is right or wrong. They are all acceptable. The question is – what did the parties intend?

If disputes like this cannot be resolved among the parties, a court will have to settle the dispute based upon its determination of what the parties intended. At the end of the day, the proper number (53, 56 or some other number) will depend upon the intent of the parties.

For those interested in learning more about the FLSA, please join us at one of our upcoming classes on the FLSA For Fire Departments:

October 10, 11, 12, 2017 – Hanover Park, IL
hosted by the Hanover Park Fire Dept.

Details / Register

December 6, 7, 8, 2017 – Las Vegas, NV
hosted by the Clark County Fire Dept.
Details / Register

 

About Curt Varone

Curt Varone has over 40 years of fire service experience and 30 as a practicing attorney licensed in both Rhode Island and Maine. His background includes 29 years as a career firefighter in Providence (retiring as a Deputy Assistant Chief), as well as volunteer and paid on call experience. He is the author of two books: Legal Considerations for Fire and Emergency Services, (2006, 2nd ed. 2011, 3rd ed. 2014) and Fire Officer's Legal Handbook (2007), and is a contributing editor for Firehouse Magazine writing the Fire Law column.
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