Fire Law Blog Fire Service and Public Safety Legal Issues Blog by Curt Varone
The City of New Haven, Connecticut is facing a class action lawsuit filed by 174 present and former firefighters alleging a violation of the Fair Labor Standards Act in terms of how much they were paid for overtime hours.
The suit was filed in US District Court on September 1, 2015 alleging that New Haven miscalculated the firefighters’ “regular rate” by not including “certification pay, education incentive pay, acting pay, haz-mat pay, and longevity pay” in the regular rate. The regular rate is an employee’s hourly compensation rate that is multiplied by 1.5 to determine an employee’s overtime rate.
The suit is similar to dozens of suits by firefighters across the country over the miscalculation of the regular rate. The problem arises because the employers fail to include all of the various wage augments that employees are entitled to when determining the “regular rate”
Under the FLSA, 29 U.S. Code §207 (e), regular rate is defined as including “all remuneration for employment paid to, or on behalf of, the employee”, subject to eight listed exceptions.
The US Department of Labor regulations further explain 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 [8] of that subsection.
778.109 The regular rate is an hourly rate.
The “regular rate” under the Act is a rate per hour. The Act does not require employers to compensate employees on an hourly rate basis; their earnings may be determined on a piece-rate, salary, commission, or other basis, but in such case the overtime compensation due to employees must be computed on the basis of the hourly rate derived therefrom and, therefore, it is necessary to compute the regular hourly rate of such employees during each workweek, with certain statutory exceptions discussed in §§778.400 through 778.421. The regular hourly rate of pay of an employee is determined by dividing his total remuneration for employment (except statutory exclusions) in any workweek by the total number of hours actually worked by him in that workweek for which such compensation was paid. The following sections give some examples of the proper method of determining the regular rate of pay in particular instances: (The maximum hours standard used in these examples is 40 hours in a workweek).
778.110 Hourly rate employee.
(a) Earnings at hourly rate exclusively.
If the employee is employed solely on the basis of a single hourly rate, the hourly rate is the “regular rate.” For overtime hours of work the employee must be paid, in addition to the straight time hourly earnings, a sum determined by multiplying one-half the hourly rate by the number of hours worked in excess of 40 in the week. Thus a $12 hourly rate will bring, for an employee who works 46 hours, a total weekly wage of $588 (46 hours at $12 plus 6 at $6). In other words, the employee is entitled to be paid an amount equal to $12 an hour for 40 hours and $18 an hour for the 6 hours of overtime, or a total of $588.
(b) Hourly rate and bonus. If the employee receives, in addition to the earnings computed at the $12 hourly rate, a production bonus of $46 for the week, the regular hourly rate of pay is $13 an hour (46 hours at $12 yields $552; the addition of the $46 bonus makes a total of $598; this total divided by 46 hours yields a regular rate of $13). The employee is then entitled to be paid a total wage of $637 for 46 hours (46 hours at $13 plus 6 hours at $6.50, or 40 hours at $13 plus 6 hours at $19.50).
The New Haven Register quoted IAFF Local 825 President James Kottage, himself one of the plaintiffs, as saying the damages will likely “add up to seven figures.” We are seeing a lot of these types of lawsuits being filed by firefighters. My database has 43 similar fire service cases filed since 2010.
The regular rate issue is one of the areas of focus in our new three-day program, Fair Labor Standards Act for Fire Departments, being held in Las Vegas – February 9-11, 2016, hosted by the Clark County Fire Department. For more information, including $49/night rooms at the Orleans Hotel & Casino, click here.
Here is a copy of the complaint: 2015 New Haven
