Georgia Firefighter Claims Incentive Stipend Belongs in Overtime Rate

A Georgia firefighter has filed a class action suit claiming his fire department failed to include incentive stipends in overtime wages in violation of the Fair Labor Standards Act.

Robert Morris filed suit in US District Court for the Southern District of Georgia last Thursday. He is employed by the Augusta-Richmond County Fire Department.

Morris claims that the annual $1800 paramedic stipend and $1200 EMT stipend should have been included in the calculation of employees’ “regular rate”, which in turn is multiplied by 1.5 to determine the “overtime rate”. Augusta-Richmond County failed to include the stipends as part of the regular rate calculations.

The suit seeks class action status for Morris and approximately 200 similarly situated firefighters.

Here is a copy of the complaint: Morris v Augusta-Richmond

The suit is not unlike a number of similar FLSA actions filed against fire departments in recent years over the failure to include various types of salary adjuncts in regular rate, including educational incentive pay, vacation buy-backs, sick-leave buy backs, and longevity supplements. Because so many fire departments are finding themselves confronted with these types of suits, it is worth discussing this issue further.

The outcome of each suit will turn on the proper determination of regular rate, which the FLSA defines as follows:

29 U.S. Code § 207 – Maximum hours

(e) “Regular rate” defined

As used in this section the “regular rate” at which an employee is employed shall be deemed to include all remuneration for employment paid to, or on behalf of, the employee…

The Department of Labor explains regular rate as follows:

29 CFR §778.108   The “regular rate”.

The “regular rate” of pay under the Act cannot be left to a declaration by the parties as to what is to be treated as the regular rate for an employee; it must be drawn from what happens under the employment contract (Bay Ridge Operating Co. v. Aaron, 334 U.S. 446). The Supreme Court has described it as the hourly rate actually paid the employee for the normal, nonovertime workweek for which he is employed—an “actual fact” (Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419). Section 7(e) of the Act requires inclusion in the “regular rate” of “all remuneration for employment paid to, or on behalf of, the employee” except payments specifically excluded by paragraphs (1) through (7) of that subsection. (These seven types of payments, which are set forth in §778.200 and discussed in §§778.201 through 778.224, are hereafter referred to as “statutory exclusions.”) As stated by the Supreme Court in the Youngerman-Reynolds case cited above: “Once the parties have decided upon the amount of wages and the mode of payment the determination of the regular rate becomes a matter of mathematical computation, the result of which is unaffected by any designation of a contrary ‘regular rate’ in the wage contracts.”

What is important to understand from the above is that regular rate is not what the fire department considers it to be, nor even what a collective bargaining agreement says it is. The proper calculation of regular rate must include other types of supplemental compensation unless that compensation is specifically excluded by the FLSA.

Additional sections in the CFR further explain some of the nuances involved in the regular rate calculations. Click here for more. This is a very complicated area with a growing body of case law developing.

About Curt Varone

Curt Varone has over 45 years of fire service experience and 35 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, 4th ed. 2022) and Fire Officer's Legal Handbook (2007), and is a contributing editor for Firehouse Magazine writing the Fire Law column.
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