Posts Tagged: employment law

Steiner v. Mitchell: Integral and Indispensable Equals Compensable

In the oldie-but-goldie decision of Steiner v. Mitchell, 350 U.S. 247 (1956), the Supreme Court held that time workers spend on activities performed before or after regular working hours is compensable under the Fair Labor Standards Act, if the activities are “integral and indispensable parts of the principal activity” of the worker’s employment. This holding, and the reasoning behind it, is an important principle of “donning and doffing,” equipment preparation, security screening, and similar cases, where workers seek compensation for time spent performing work-related activities off the clock or outside of regular work hours.

Facts

Steiner operated a car-battery manufacturing plant. The plant’s production employees worked with some toxic chemicals. These included lead and sulphuric acid. In the manufacturing process, some of the materials gave off dangerous fumes. Some were inevitably spilled or dropped, becoming a part of the dust in the air. In general, the chemicals permeated the entire plant and everything and everyone in it. Id. at 249-50.

In an effort to make the plant safer and thereby increase the efficiency of its operation, Steiner equipped it with shower facilities and a locker room with separate lockers for work and street clothing. Also, Steiner furnished work clothes for the employees to wear. The cost of providing their own work clothing would be prohibitive for the employees, since the acid caused such rapid deterioration that the clothes sometimes lasted only a few days. The employees regularly changed into work clothes before the beginning of the productive work period, and showered and changed back at the end of that period. In addition, the company required the employees to take afternoon baths to minimize the amount of lead oxide absorbed into their blood. These measures were thought to protect the company and the employees. Id. at 250-52.

Steiner did not pay the employees for the time they spent in these activities, which together amounted to about 30 minutes per day. Steiner conceded that the employees’ clothes-changing and showering activities were indispensable to and integrally related to the performance of their productive work. Steiner, however, contended that these activities fell outside the concept of a “‘principal activity’ and that, being performed off the production line and before or after regular shift hours, the time employees spent doing them was not compensable time under the Fair Labor Standards Act. Id. at 250-52.

The Court’s Decision

The question for the Court was whether the time employees spent changing clothes and showering was compensable under the FLSA in light of the Portal-to-Portal Act, which provided that time spent on activities “preliminary to or postliminary to” an employee’s “principle activities” was not compensable under the FLSA.

The Court decided that this time was compensable. As the backdrop to this conclusion, the Court explained Congress passed the Portal–to–Portal Act in response to the “unexpected liabilities” created by a broad judicial interpretation (as in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946)) of compensable time under the FLSA. See 29 U.S.C. § 251(a). Section § 4(a)(2) of the Portal–to–Portal Act therefore exempted employers from FLSA liability for claims based on “activities which are preliminary to or postliminary to” the principal activities that an employee is employed to perform. 29 U.S.C. § 254(a)(2). 350 U.S. at 253-54.

The Court then determined that for Steiner’s battery-plant employees, changing clothes and showering were parts of their “principal,” rather than their “preliminary” or “postliminary,” activities, within the meaning of § 4(a)(2). Therefore, time employees spent in these activities was required to be counted in measuring their compensable working time under the FLSA.

First, after reviewing the Portal-to-Portal Act’s legislative history, the Court determined Congress intended that activities employees performed either before or after the regular work shift, on or off the production line, would be compensable under the FLSA if those activities are “an integral part of and indispensable to their principal activities,” and are not specifically excluded by § 4(a)(1) of the Portal-to-Portal Act. 350 U.S. at 254-56. That section, § 4(a)(1), generally excludes time spent traveling to and from the workplace. 29 U.S.C. § 254(a)(1).

Second, the Court determined the “integral and indispensable” rule was supported by other provisions of and amendments to the Portal-to-Portal Act. 350 U.S. at 254-56.

Finally, the Court concluded that with respect to Steiner’s battery plant employees, changing clothes and showering were integral and indispensable parts of the principal activity of their employment. Therefore, the time the employees spent on these activities was compensable working time under the FLSA.

Analysis

In sum, Steiner stands for the proposition that time workers spend on activities performed before or after regular working hours, on or off the production floor, is compensable under the FLSA, if the activities are integral and indispensable parts of the principal activity of the worker’s employment. The reasoning behind this holding is an important principle of FLSA cases involving donning and doffing, equipment preparation, security screening, and similar claims where workers seek compensation for time spent performing work-related activities off the clock or outside of regular work hours.

This article also appears on TimCoffieldAttorney.com.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.  

Bostock v. Clayton County: Title VII Protections for LGBTQ Employees

In the landmark Bostock v. Clayton County, No. 17–1618, 590 U.S. ___ (2020), the Supreme Court held that an employer who fires an individual for being gay or transgender violates Title VII of the Civil Rights Act of 1964.

Facts

In each of three consolidated cases, an employer fired an employee at least in part for being homosexual or transgender. Clayton County, Georgia, fired Gerald Bostock for conduct “unbecoming” a county employee when began playing a gay recreational softball league. Altitude Express fired Donald Zarda days after he mentioned being gay. R.G. & G.R. Harris Funeral Homes fired Aimee Stephens, who presented as a male when she was hired, after she informed the company that she planned to “live and work full-time as a woman.”

Each employee sued, alleging sex discrimination under Title VII of the Civil Rights Act of 1964. The employees’ cases shared a common theory: that Title VII’s prohibition of workplace discrimination “because of sex” prohibited discrimination because an employee is homosexual or transgender. Their respective Circuit Courts reached conflicting conclusions. The Eleventh Circuit allowed the dismissal of Bostock’s suit, holding that Title VII does not prohibit employers from firing employees for being gay. The Second and Sixth Circuits, however, allowed Zarda’s and Stephens’ sex discrimination claims, respectively, to proceed under Title VII.

The Court’s Decision

The Supreme Court held that Title VII prohibits an employer from firing or otherwise treating an employee differently because the employee is gay or transgender.

Title VII makes it “unlawful . . . for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual . . . because of such individual’s race, color, religion, sex, or national origin.” 42 U. S. C. §2000e–2(a)(1). The Court determined that a straightforward application of these terms, interpreted using their ordinary public meaning at the time of their enactment, meant that Title VII prohibited discrimination against an employee for being gay or transgender. No. 17–1618 at 4 – 12.

But-For Causation and Intent under Title VII

First, the Court observed the parties agreed the term “sex” in 1964 referred to the biological distinctions between male and female. And in University of Texas Southwestern Medical Center v. Nassar, 570 U.S. 338, 350 (2013), the Court held that “the ordinary meaning of ‘because of’ is ‘by reason of’ or ‘on account of[.]’ ” The term “because of” incorporates the but-for causation standard. Nassar at 346, 360.

Importantly, the Bostock Court clarified that a termination (or other employment action) can have many but-for causes. Thus, for a termination or other employment decision to violate Title VII, discrimination need not be the only cause of the decision. The Court observed that under Title VII, a defendant employer cannot avoid liability just by citing some other factor that contributed to its challenged employment action. The Court looked to Webster’s New International Dictionary to confirm that the term “discriminate” simply meant “[t]o make a difference in treatment or favor (of one as compared with others).” Id. At 745.

The Court, citing its decision in Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 986 (1988), further observed that in Title VII “disparate treatment” cases, the difference in treatment based on sex must be intentional. And the statute’s repeated use of the term “individual” means that the focus is on “[a] particular being as distinguished from a class.” Webster’s New International Dictionary, at 1267. No. 17–1618 at 4-9.

Second, having established the meaning of the law’s operative terms, the Court observed that those terms generate a straightforward rule: An employer violates Title VII’s “because of sex” provision when it intentionally fires an individual employee based in part on sex. The Court emphasized that it makes no difference if other factors besides the plaintiff’s sex contributed to the decision or that the employer treated women as a group the same when compared to men as a group. A statutory violation occurs if an employer intentionally relies in part on an individual employee’s sex when deciding to discharge the employee. No. 17–1618 at 9-12.

Therefore, the Court concluded, the plain language of Title VII forbids discrimination against an employee because the employee is gay or transgender. Because discrimination on the basis of homosexuality or transgender status requires an employer to intentionally treat individual employees differently because of their sex, an employer who intentionally penalizes an employee for being homosexual or transgender also violates Title VII. The Court emphasized that in this scenario, the discrimination “because of sex” is necessarily intentional.  Just as sex is necessarily a but-for cause when an employer discriminates against homosexual or transgender employees, an employer who discriminates on these grounds inescapably intends to rely on sex in its decisionmaking. No. 17–1618 at 9-12.

The Court then discussed three of its previous cases that supported its analysis of Title VII’s language. In Phillips v. Martin Marietta Corp., 400 U.S. 542 (1971), the Court held that a company violated Title VII by refusing to hire women with young children, even though the discrimination also depended on other, non-sex factors, like being a parent of young children, and even though the company favored hiring women over men. In Los Angeles Dept. of Water and Power v. Manhart, 435 U.S. 702 (1978), the Court held that an employer’s policy of requiring women to make larger pension fund contributions than men because women tend to live longer violated Title VII, notwithstanding the policy’s evenhandedness between men and women as groups. And in Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998), the Court held that a male employee could bring a triable Title VII claim based on sexual harassment by co-workers who were members of the same sex.

The Court observed that the lessons in PhillipsManhart, and Oncale were instructive on the issue before it in Bostock. First, these cases confirmed that it is irrelevant what an employer might call its discriminatory practice, how others might label it, or what else might motivate it. In Manhart, for example, the employer could have called its discriminatory rule a “life expectancy” adjustment, and in Phillips, the employer could have accurately spoken of its policy as one based on “motherhood.” But the Court emphasized that the employer’s labels and additional intentions or motivations did not make a difference to Title VII, in those cases or in Bostock. The critical point in Bostock was that when an employer fires an employee for being homosexual or transgender, it necessarily intentionally discriminates against that individual in part because of sex.

Second, the Court explained that, as shown by these precedents, a plaintiff’s sex need not be the sole or primary cause of the employer’s adverse action. In PhillipsManhart, and Oncale, the Court observed, the employer easily could have pointed to some other, non-protected trait and insisted it was the more important factor in the adverse employment outcome. But in all three cases, sex still was part of the decision. Similarly, in Bostock, the Court found it was of no significance if another factor, like the plaintiff’s attraction to the same sex or presentation as a different sex from the one assigned at birth, might also be at work, or even play a more important role in the employer’s decision. Sex was still part of the decision.

Third, the Court observed that these precedents showed that an employer cannot escape liability for discrimination by demonstrating that it treats males and females comparably as groups. Manhart was instructive on this point, as in that case the employer’s policy violated Title VII by requiring women to make larger pension fund contributions than men, even though the policy treated men and women evenly as groups. Applying that rationale to the facts in Bostock, the Court concluded that an employer who intentionally fires an individual homosexual or transgender employee in part because of that individual’s sex violates Title VII even if the employer is willing to subject all male and female homosexual or transgender employees to the same rule. No. 17–1618 at 12–15.

The Flawed Arguments that Title VII Does Not Bar Discrimination Because of Homosexual or Transgender Status

The Court then turned to the employers’ various arguments that intentional discrimination against employees based on their homosexual or transgender status is not a basis for Title VII liability.

First, the Court rejected the employers’ argument that there was no Title VII violation because plaintiffs would likely respond in conversation that they were fired for being gay or transgender and not because of sex. This argument failed because conversational conventions do not control Title VII’s legal analysis, which asks simply whether sex is a but-for cause.

Second, the Court rejected the employers’ argument that intentional discrimination based on homosexuality or transgender status is not intentional discrimination based on sex. The Court concluded this argument failed because an employer who discriminates against homosexual or transgender employees necessarily and intentionally applies sex-based rules.

Third, the Court rejected the employers’ argument that discrimination against gay or transgender people was not sex discrimination because an employer could refuse to hire a gay or transgender individual without learning that person’s sex. This argument failed because a refusal to hire because of homosexual or transgender status still turns on sex-based rules. The Court observed that by intentionally setting out a rule that makes hiring turn on sex, the employer violates the plain language of Title VII, regardless of what he might know or not know about individual applicants.

Fourth, the Court rejected the employers’ argument that homosexuality and transgender status are distinct concepts from sex, and that if Congress wanted to address these matters in Title VII, it would have referenced them specifically in the statute. The Court concluded that because homosexual and transgender discrimination are covered by the broad rule against all sex discrimination, this argument was inconsistent with the Court’s basic principles of statutory interpretation. Specifically, when Congress chooses not to include any exceptions to a broad rule, the Court applies the broad rule.

Fifth, the Court rejected the employers’ argument that because the policies at issue in Bostock have the same adverse consequences for men and women, a stricter causation test should apply. This argument failed because it essentially came down to a suggestion that sex must be the sole or primary cause of an adverse employment action under Title VII. But this suggestion is inconsistent with the plain language of the statute, which calls for but-for causation. No. 17–1618 at 16-23.

Finally, the Court addressed the employers’ contention that legislative history called for a narrower view of sex discrimination, arguing that few in 1964 would have expected Title VII to apply to discrimination against homosexual and transgender persons. The Court, citing its decision in Milner v. Department of Navy, 562 U.S. 562, 574 (2011), determined that legislative history had no bearing on this issue, because the language of Title VII was not ambiguous. The Court further explained that while it is possible that a statutory term that means one thing today or in one context might have meant something else at the time of its adoption or might mean something different in another context, the employers did not seek to use historical sources to illustrate that the meaning of any of Title VII’s language has changed since 1964 or that the statute’s terms ordinarily carried some missed message. Instead, the employers seemed to say when a new application of a law is both unexpected and important, even if it is clearly commanded by the existing law, the Court should just point out the question, refer the subject back to Congress, and decline to enforce the law’s plain terms in the meantime. The Court observed that it had long rejected that sort of reasoning.

Finally, the Court rejected the employers’ policy appeals, which amounted to suggestions that the Court do what it thinks best with the law’s guidance. The Court declined that invitation. No. 17–1618 at 23-33.

Analysis

In sum, the Bostock Court held that an employer who fires an individual for being gay or transgender violates Title VII. This was a landmark ruling for LGBTQ rights.

Importantly for all types of Title VII cases and other cases involving but-for causation, the Bostock Court clarified that a termination (or other employment action) can have many but-for causes. Thus, for a termination or other employment decision to violate Title VII, discrimination need not be the only cause of the decision. Under a but-for causation standard, discrimination need only be part of the decision. A defendant employer therefore cannot avoid liability just by citing some other factor that contributed to its challenged employment action.

This article also appears on TimCoffieldAttorney.com.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com. 

Virginia Values Act: Powerful Protections for Virginia Employees

Effective July 1, 2020, the Virginia Values Act (“VVA”) offers sweeping protections for Virginia workers against several categories of discrimination. The law is broader in scope than some similar federal laws, covers smaller employers than federal laws, and unlike most federal employment laws, is not subject to a cap on compensatory damages. In short, it is a powerful law for protecting the rights of Virginia employees.

This post will discuss some of the key provisions of the VVA, which amends the Virginia Human Rights Act (“VHRA”). The bulk of the new law as it relates to employment rights is codified at VA Code §§ 2.2-3900-3908.

Scope of Prohibited Discrimination

The VVA makes it illegal under the VHRA for an employer to:

Fail or refuse to hire, discharge, or otherwise discriminate against any individual with respect to such individual’s compensation, terms, conditions, or privileges of employment because of such individual’s race, color, religion, sex, sexual orientation, gender identity, marital status, pregnancy, childbirth or related medical conditions including lactation, age, status as a veteran, or national origin.

VA Code § 2.2-3905(B). The prohibition against race discrimination includes a prohibition on hairstyle discrimination. This is because a distinct piece of legislative, House Bill 1514, clarified:

The terms “because of race” or “on the basis of race” or terms of similar import when used in reference to discrimination in the Code and acts of the General Assembly include because of or on the basis of traits historically associated with race, including hair texture, hair type, and protective hairstyles such as braids, locks, and twists.

VA Code § 2.2-3901(B). Also notably, House Bill 827 expanded the VHRA’s prohibition against pregnancy discrimination to allow a cause of action against an employer who

refuse[s] to make reasonable accommodation to the known limitations of a person related to pregnancy, childbirth, or related medical conditions, unless the employer can demonstrate that the accommodation would impose an undue hardship on the employer.

VA Code § 2.2-3904(A). Under the law, these reasonable pregnancy accommodations may include:

more frequent or longer bathroom breaks, breaks to express breast milk, access to a private location other than a bathroom for the expression of breast milk, acquisition or modification of equipment or access to or modification of employee seating, a temporary transfer to a less strenuous or hazardous position, assistance with manual labor, job restructuring, a modified work schedule, light duty assignments, and leave to recover from childbirth.

VA Code § 2.2-3904(A). The amended VHRA also makes it unlawful for employers to retaliate against workers for seeking such accommodations. See VA Code § 2.2-3905(B)(7).

Motivating Factor Causation Standard for Discriminatory Employment Practices

The amended VHRA makes discrimination for any of the specified reasons unlawful if the discrimination was a “motivating factor” of an employment practice, even if other, non-discriminatory, factors also played a role in the practice. This generally makes it unlawful, except where provided elsewhere in the law, for

an employer to use race, color, religion, sex, sexual orientation, gender identity, marital status, pregnancy, childbirth or related medical conditions, age, status as a veteran, or national origin as a motivating factor for any employment practice, even though other factors also motivate the practice.

VA Code § 2.2-3905(B)(6).

Employer Defenses and Exceptions

The amended VHRA does include some Title VII-esque exceptions from its prohibitions on certain types of employment discrimination. These include:

  • Where “religion, sex, or age is a bona fide occupational qualification reasonably necessary to the normal operation” of that particular employer;
  • Where the employer is a religious educational institution and it hires or employs employees of its particular religion;
  • Where the employer applies different standards of compensation, or different terms, conditions, or privileges of employment, pursuant to a “bona fide seniority or merit system,” or a system that measures earnings by quantity or quality of production, or to employees who work in different locations, provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, sexual orientation, gender identity, marital status, pregnancy, childbirth or related medical conditions, age, status as a veteran, or national origin;
  • Where an employer gives and acts upon the results of any “professionally developed ability test,” provided that such test, its administration, or an action upon the results is not designed, intended, or used to discriminate on any of the prohibited bases;
  • Where an employer provide reasonable accommodations related to pregnancy, childbirth or related medical conditions, and lactation, when such accommodations are requested by the employee; and
  • Where an employer to conditions employment or premises access based upon citizenship where the employer is subject to any requirement imposed in the interest of the national security of the United States under any security program in effect pursuant to or administered under any statute or regulation of the federal government or any executive order of the President of the United States.

VA Code § 2.2-3905(C).

Retaliation Prohibited

Importantly, the amended VHRA prohibits retaliation for opposing unlawful employment practices or for filing a complaint or participating in an investigation under the VHRA. VA Code § 2.2-3905(B)(7).

Employer Coverage

The amended VHRA has a slightly broader scope than Title VII and the federal Age Discrimination in Employment Act (“ADEA”) when it comes to which employers are subject to its requirements. Title VII generally applies to employers with 15 or more employees; the ADEA applies to employers with 20 or more employees. In cases of discrimination that are not unlawful discharges, the amended VHRA parallels Title VII, applying to employers “employing 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year, and any agent of such a person.” In cases of unlawful discharge, the amended VHRA covers more employers than Title VII. When the unlawful discharge is not based on age, the amended VHRA applies to employers with more than 5 employees. When the unlawful discharge is based on age, the amended VHRA applies to employers with more than 5 but fewer than 20 employees. VA Code § 2.2-3905(A).

Age Harassment

Unlike the federal ADEA, which only allows recovery of lost wages and liquidated damages, the amended VHRA allows general compensatory/emotional distress and punitive damages for age discrimination. The practical effect of these additional remedies is that the VHRA covers more types of age discrimination than the ADEA. This is because individuals subject to distressing age-based harassment at work, but who do not suffer lost wages, may have a viable legal claim for damages under the amended VHRA, where they did not have a viable claim for damages under the ADEA.

Damages Provisions: Uncapped Compensatory Damages and a Higher Punitive Damages Cap

The amended VHRA allows for a private cause of action in state court. VA Code § 2.2-3908(A). Unlike Title VII claims, which are subject to caps on compensatory and punitive damages ranging from $50,000 to $300,000, depending on the size of the employer, claims brought under the amended VHRA are not subject to a cap on compensatory damages. See VA Code § 2.2-3908(B). Punitive damages are subject to Virginia’s $350,000 cap. VA Code § 8.01-38.1.

Therefore, under the amended VHRA, even a small employer could be required to pay compensatory damages of more than $300,000, plus punitive damages of up to $350,000. This makes the damages provision of the amended VHRA far more powerful than Title VII. This is because Title VII limits the exposure of the smallest employers to $50,000 in compensatory and punitive damages combined, and limits the exposures of the largest employers to $300,000 in compensatory and punitive damages combined. The amended VHRA has no cap on compensatory damages and a $350,000 cap on punitive damages.

In addition, the amended VHRA provides that a prevailing party may be awarded reasonable attorney’s fees and costs.

Administrative Procedure

Similar to Title VII and the ADEA, the amended VHRA requires employees to follow an administrative procedure before bringing their claims in court. Specifically, an employee seeking to pursue a lawsuit against an employer for unlawful discrimination under the VHRA must first file a complaint with the Virginia Division of Human Rights. The complaint should provide sufficient details about “the time, place, and facts surrounding the alleged unlawful discrimination.” VA Code §§ 2.2-3908(A) & 2.2-3907(A).

After the complaint is perfected, the Division will serve a charge on the respondent and send a notice to all parties with important information. VA Code § 2.2-3907(B). The parties have the option of agreeing to submit the matter to voluntary mediation. VA Code § 2.2-3907(C). If the parties do not agree to mediation, or if mediation is not successful, the Division will investigate “to determine whether there is reasonable cause to believe the alleged discrimination occurred.” VA Code § 2.2-3907(D).

If the Division concludes there is no reasonable cause, it will dismiss the charge and issue to the employee a notice of his right to commence a civil action in court. VA Code § 2.2-3907(E). This is similar to the right-to-sue letters issued by the EEOC in federal Title VII cases, which create a 90-day window for filing suit. VA Code § 2.2-3907(E).

If the Division concludes there is reasonable cause to believe discrimination occurred, the Division must notify the parties and “shall immediately endeavor to eliminate any alleged unlawful discriminatory practice by informal methods.” VA Code  § 2.2-3907(F). If such a resolution proves “unworkable,” the Division will be given notice of his right to commence a civil action. Id. 

During the administrative investigation, either the Division or the complainant may also ask a court for certain temporary relief, pending final determination of the administrative proceedings. VA Code § 2.2-3907(G). However, such a petition must contain a certification by the Division that the particular matter presents exceptional circumstances in which irreparable injury will result from unlawful discrimination in the absence of temporary relief. Id.

Similar to the federal EEOC process, the employee can request that the Division issue notice of suit rights if (1) 180 days have passed since the complaint was filed or (2) the Division determines the investigation is unlikely to conclude within 180 days. VA Code § 2.2-3907(H).

This article also appears on TimCoffieldAttorney.net.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com. 

FLSA Professional Employee Exemption: Learned or Creative or Teaching

The Fair Labor Standards Act requires covered employers to pay minimum wages and overtime compensation to certain categories of employees. However, the law contains several exceptions or “exemptions” from these requirements, most of which turn on a combination of the employees’ pay and the nature of their job duties. For example, Section 13(a)(1) of the FLSA, a.k.a. 29 U.S.C. § 213(a)(1), provides an “exemption” from both minimum wage and overtime pay for certain categories of so-called “white collar” employees — namely, employees working as bona fide executive, administrative, professional, or outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempt certain categories of computer employees. 

To qualify for a white collar exemption, employees must be paid on a salary basis at not less than $684 per week (as of January 1, 2020) and have job duties that satisfy certain requirements. Importantly, job titles do not determine whether an employee is exempt from the FLSA. For an employee to be exempt, her actual real-life job duties and salary must meet all the requirements of the FLSA and the Department of Labor’s implementing regulations.

This post will focus on the exemption for professional employees. There are three general types of exempt professional employees: learned professionals, creative professionals, or teaching professionals. The Department of Labor is also an excellent resource for information about the professional employee exemption. The DOL’s implementing regulations with respect to the professional employee exemption are generally located at 29 CFR §§ 541.300-304.

Learned Professional Exemption 

To qualify for the learned professional employee exemption (and therefore, not be entitled to receive overtime pay under the FLSA), an employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week, and meet all of the following requirements:

  1. The employee’s primary duty must be the performance of work requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. This primary duty test has three elements:

    1. The employee must perform work requiring advanced knowledge;
    2. The advanced knowledge must be in a field of science or learning; and
    3. The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction. 

29 CFR § 541.301(a)

Definition of “Primary Duty”

As used in the FLSA regulations, “primary duty” means the principal, main, major or most important duty that the employee performs. Determination of an employee’s primary duty is based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole. Factors to consider when determining an employee’s primary duty include, without limitation, the relative importance of any exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee’s relative freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee. 29 CFR § 541.700.

Work Requiring Advanced Knowledge 

The regs define “work requiring advanced knowledge” as work which is “predominantly intellectual” in character, and which includes work requiring the “consistent exercise of discretion and judgment.” Professional work is therefore distinguished from work involving routine mental, manual, mechanical or physical work. A professional employee generally uses the advanced knowledge to analyze, interpret or make deductions from varying facts or circumstances. Advanced knowledge cannot be attained at the high school level. 29 CFR § 541.301(b).

Field of Science or Learning 

The phrase “fields of science or learning” includes the professions of law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy and other occupations that have a recognized professional status as distinguished from the mechanical arts or skilled trades. The regs make this distinction where the knowledge involved in a mechanical arts or skilled trades could be of a fairly advanced type, but is not in a field of science or learning. 29 CFR § 541.301(c).

Customarily Acquired by a Prolonged Course of Specialized Intellectual Instruction 

The phrase “customarily acquired by a prolonged course of specialized intellectual instruction”  restricts the learned professional exemption to professions where specialized academic training is a standard prerequisite for entrance into the profession. The regs indicate the best prima facie evidence that an employee meets this requirement is possession of the appropriate academic degree. 

However, the word “customarily” means the exemption may also be available to employees in such professions who have substantially the same knowledge level and perform substantially the same work as the degreed employees, but who attained the advanced knowledge through a combination of work experience and intellectual instruction. Thus, for example, the learned professional exemption may be available to the occasional lawyer who did not go to law school, or the occasional chemist who does not have a degree in chemistry. 

On the other hand, the regs indicate the learned professional exemption is not available for occupations that customarily may be performed with only the general knowledge acquired by an academic degree in any field, with knowledge acquired through an apprenticeship, or with training in the performance of routine mental, manual, mechanical or physical processes. 

The learned professional exemption also does not apply to occupations in which most employees acquire their skill by experience rather than by advanced specialized intellectual instruction. 29 CFR § 541.301(d).

Examples Applying the Learned Professional Exemption

The regulations discuss several categories of employees whose duties may or may not qualify for the learned professional exemption. For example, depending on the circumstances and levels of academic study, degrees, and certification, registered or certified medical technologists, registered nurses, dental hygienists, physician assistants, certified public accountants, executive or sous chefs, athletic trainers, and licensed funeral directors and embalmers may meet the duties requirement for the learned professional exemption. 

On the other hand, licensed practical nurses, accounting clerks, bookkeepers, and cooks or chefs without culinary arts degrees, paralegals and legal assistants, generally do not meet the duties requirement for this exemption. 29 CFR § 541.301(e).

Practice of Law or Medicine 

The regs further provide that an employee holding a valid license or certificate permitting the practice of law or medicine is exempt if the employee is actually engaged in such a practice. An employee who holds the requisite academic degree for the general practice of medicine is also exempt if he or she is engaged in an internship or resident program for the profession. 

The salary and salary basis requirements do not apply to bona fide practitioners of law or medicine. 29 CFR § 541.304.

Creative Professional Employee Exemption

To qualify for the creative professional employee exemption (and therefore, not be entitled to receive overtime pay under the FLSA), an employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week, and meet all of the following requirements:

  1. The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor (as opposed to routine mental, manual, mechanical or physical work). 

The exemption does not apply to work which can be produced by a person with general manual or intellectual ability and training. 29 CFR § 541.302(a).

Recognized Field of Artistic or Creative Endeavor 

To qualify for the exemption as a creative professional, the employee’s work must be performed “in a recognized field of artistic or creative endeavor.” This includes such fields as music, writing, acting and the graphic arts. 29 CFR § 541.302(b).

Invention, Imagination, Originality or Talent 

The requirement of “invention, imagination, originality or talent” distinguishes the creative professions from work that primarily depends on intelligence, diligence and accuracy. The duties of employees vary widely, and exemption as a creative professional depends on the extent of the invention, imagination, originality or talent exercised by the employee. Determination of exempt creative professional status, therefore, must be made on a case-by-case basis. 

As explained in the regs, this requirement generally is met by actors, musicians, composers, conductors, and soloists; painters who at most are given the subject matter of their painting; cartoonists who are merely told the title or underlying concept of a cartoon and must rely on their own creative ability to express the concept; essayists, novelists, short-story writers and screen-play writers who choose their own subjects and hand in a finished piece of work to their employers (the majority of such persons are, of course, not employees but self-employed); and persons holding the more responsible writing positions in advertising agencies. 

This requirement generally is not met by a person who is employed as a copyist, as an “animator” of motion-picture cartoons, or as a retoucher of photographs, since such work is not properly described as creative in character. 29 CFR § 541.302(c).

Journalists and Reporters

Journalists may satisfy the duties requirements for the creative professional exemption if their primary duty is work requiring invention, imagination, originality or talent (as opposed to work which depends primarily on intelligence, diligence and accuracy)

Employees of newspapers, magazines, television and other media are not exempt creative professionals if they only collect, organize and record information that is routine or already public, or if they do not contribute a unique interpretation or analysis to a news product. 

Thus, for example, newspaper reporters who simply rewrite press releases or who write standard recounts of public information by gathering facts on routine community events are not exempt creative professionals. Reporters also do not qualify as exempt creative professionals if their work product is subject to substantial control by the employer. 

However, journalists may qualify as exempt creative professionals if their primary duty is performing on the air in radio, television or other electronic media; conducting investigative interviews; analyzing or interpreting public events; writing editorials, opinion columns or other commentary; or acting as a narrator or commentator. 29 CFR § 541.302(d).

Teaching Professional Employee Exemption

The professional employee exemption is also available to teachers, if their primary duty is teaching, tutoring, instructing or lecturing in the activity of imparting knowledge, and if they are employed and engaged in this activity as a teacher in an educational establishment. The term “educational establishment” is defined in 29 CFR § 541.204(b).

Exempt teachers include, but are not limited to: Regular academic teachers; teachers of kindergarten or nursery school; teachers of gifted or disabled children; teachers of skilled and semi-skilled trades and occupations; teachers engaged in automobile driving instruction; aircraft flight instructors; home economics teachers; and vocal or instrumental music instructors. 29 CFR § 541.303(b).

Faculty members who are engaged as teachers but also spend a considerable amount of their time in extracurricular activities such as coaching athletic teams or acting as moderators or advisors in such areas as drama, speech, debate or journalism are engaged in teaching. 29 CFR § 541.303(b).

The regs further provide that having an elementary or secondary teacher’s certificate provides a clear means of identifying the individuals contemplated as being within the scope of the exemption for teaching professionals. Teachers who possess a teaching certificate generally qualify for the exemption regardless of the terminology (e.g., permanent, conditional, standard, provisional, temporary, emergency, or unlimited) used by the State to refer to different kinds of certificates. However, private schools and public schools are not uniform in requiring a certificate for employment as an elementary or secondary school teacher, and a teacher’s certificate is not generally necessary for employment in institutions of higher education or other educational establishments. Therefore, a teacher who is not certified may be considered for exemption, provided that such individual is employed as a teacher by the employing school or school system. 29 CFR § 541.303(c)

The salary and salary basis requirements do not apply to bona fide teachers. Having a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge includes, by its very nature, exercising discretion and judgment. 29 CFR § 541.303(d).

Highly Compensated Employees

Highly compensated employees performing office or non-manual work and paid total annual compensation of $107,432 or more (which, as of January 1, 2020, must include at least $684 per week paid on a salary or fee basis) are exempt from the FLSA if they “customarily and regularly” perform at least one of the duties of an exempt executive, administrative or professional employee. 29 CFR § 541.601.

“Customarily and regularly” means a frequency that must be “greater than occasional” but which “may be less than constant.” It includes work “normally and recurrently done every workweek”; it does not include isolated or one-time tasks. 29 CFR § 541.701

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com. 

This article was also published to TimCoffieldAttorney.net.

Comcast v. NAAAM: Law of Causation in 1981 Claims

In Comcast Corp. v. National Association of African American-Owned Media, No. 18-1171, __ U.S. __ (March 23, 2020), the Supreme Court held that race-discrimination claims brought under the Civil Rights Act of 1886, 42 U.S.C. § 1981, are subject to a but-for standard of causation.

Background

The Civil Rights Act of 1886, now codified at 42 U.S.C. § 1981, provides that “[a]ll persons … shall have the same right … to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens[.]” The law has been interpreted as, inter alia, prohibiting discrimination because of race in employment and other kinds of contractual relationships.

A similar discrimination law, Title VII of the Civil Rights Act, specifically provides for a “motivating factor” causation standard — that is, an employee can prevail on a Title VII race discrimination claim by proving that her race was a “motivating factor for any employment practice, even though other factors also motivated that practice.” 42 U.S.C. § 2000e-2(m).

The statutory language of 42 U.S.C. § 1981, however, does not specify the causation standard for proving race discrimination under § 1981.

The causation standard under § 1981 is important for employees because this law is, in some ways, more powerful than Title VII. For example, while Title VII race discrimination claims are subject to caps on compensatory and punitive damages, see 42 U.S.C. § 1981a, race discrimination claims under § 1981 are not subject to damages caps.

Facts

An African-American-owned television-network operator (ESN) sought to have Comcast carry its channels. Comcast refused, citing lack of programming demand and various other reasons. ESN sued Comcast for race discrimination under 42 U.S.C. §1981, alleging that Comcast’s refusal to carry ESN’s channels violated the law, which guarantees “[a]ll persons . . . the same right . . . to make and enforce contracts . . . as is enjoyed by white citizens.” 42 U.S.C. § 1981.

The District Court dismissed ESN’s complaint for failing plausibly to show that, “but for” racial animus, Comcast would have contracted with ESN. The Ninth Circuit reversed, holding that ESN needed only to plead facts plausibly showing that race played “some role” in Comcast’s decisionmaking process. Comcast appealed.

The Court’s Decision

The Supreme Court vacated and remanded, holding that a § 1981 plaintiff bears the burden of showing that the plaintiff’s race was a “but-for” cause of its injury.

In so holding, the Court observed that a tort plaintiff typically must prove but-for causation — meaning that the plaintiff’s injury would not have happened in the absence of the offending conduct (in this context, racial animus). See University of Tex. Southwestern Medical Center v. Nassar, 570 U. S. 338, 347 (2013) (discussing tort principles and holding that but-for causation applied to Title VII retaliation claims).

ESN argued that § 1981 creates an exception to this general principle, such that a § 1981 plaintiff only bears the burden of showing that race was a “motivating factor” in the defendant’s challenged decision. No. 18-1171 at 3-12. The Court rejected this argument.

First, the court determined that “several clues, taken collectively,” made clear that a but-for causation standard applied to § 1981. For instance, the Court noted that the statute’s text suggested but-for causation: An ordinary English speaker would not say that a plaintiff did not enjoy the “same right” to make contracts “as is enjoyed by white citizens” if race was not a but-for cause affecting the plaintiff’s ability to contract. Id. at 4-8.

The Court went on to discuss the larger structure and history of the Civil Rights Act of 1866 as providing further clues in support of a but-for causation standard. For example, when § 1981 was first enacted, it did not provide a private enforcement mechanism for violations. That right was “judicially created,” decades later, in Johnson v. Railway Express Agency, Inc., 421 U. S. 454, 459 (1975). The Court observed that during the era of Johnson v. Railway Express, the Court usually insisted that the legal elements of “implied” causes of action be at least as demanding as those found in analogous statutory causes of action.

The Court found this rule useful, as a neighboring section of the 1866 Act uses the terms “on account of” and “by reason of,” and these phrases are often held to indicate but-for causation. Another provision provides that in cases not provided for by the 1866 Act, the common law shall govern. The Court noted that back in 1866, the common law usually treated a showing of but-for causation as a prerequisite to a tort suit. The Court further cited some of its own precedents as confirming its assessment that the statute’s language and history called for but-for causation. See, e.g.Johnson, 421 U.S., at 459–460Buchanan v. Warley, 245 U.S. 60, 78–79 (1917)No. 18-1171 at 4-8.

Second, the Court rejected ESN’s argument that the “motivating factor” causation test in Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(m), should also apply to § 1981 cases. The Court observed that it had already rejected attempts to extend Title VII’s “motivating factor” standard to other laws. See, e.g., Gross v. FBL Financial Services, Inc., 557 U.S. 167 (2009) (Age Discrimination in Employment Act). The Court saw no reason to think the motivating factor standard would fit § 1981 claims any better.

Third, the Court further supported its conclusion by discussing the history behind Title VII’s motivating factor standard. The Court emphasized that when the motivating factor test was added to Title VII in the Civil Rights Act of 1991, Congress also amended § 1981 without mentioning “motivating factors.” No. 18-1171 at 10. The Court therefore found that even if ESN was correct that the 1991 amendments clarified that § 1981 addresses not just contractual “outcomes” but the whole contracting “process,” its claim that a process-oriented right necessarily pairs with a motivating factor causal standard was mistaken. No. 18-1171 at 10-11.

Finally, the Court rejected ESN’s argument that the burden-shifting framework of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), supported the application of a motivating factor standard to § 1981 claims. Whether or not McDonnell Douglas has some useful role in § 1981 cases, the Court observed that case was decided in a context and at a time when but-for causation was the undisputed test, and it does not mention a motivating factor test. No. 18-1171 at 11-12.

Analysis

In short, Comcast v. NAAAM held that race-discrimination claims brought under 42 U.S.C. § 1981 are subject to a but-for standard of causation. Although but-for causation does not require a plaintiff to prove racial discrimination was the only cause of an injury, the but-for standard is a somewhat higher standard of causation than the “motivating factor” standard permitted by Title VII. To show but-for causation in the employment context, a § 1981 plaintiff must show that the employment action at issue would not have occurred in the absence of racial discrimination.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

This blog was also published to TimCoffieldAttorney.com.

Genesis Healthcare v. Symczyk: Rule 68 and Collective Actions

In Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66 (2013), the Supreme Court held that a putative Fair Labor Standards Act collective action brought by one employee on behalf of others was no longer justiciable when, as conceded by the employee, her individual claim became moot before others joined the case.

Facts

Symzcyk worked for Genesis Healthcare as a registered nurse. In 2009, Symczyk brought a putative collective action under the FLSA on behalf of herself and “other employees similarly situated.” 29 U.S.C. § 216(b). She alleged Genesis violated the FLSA by automatically deducting 30 minutes of time worked per shift for meal breaks for certain employees, even when the employees performed compensable work during those breaks. Symcyzk, who remained the sole plaintiff throughout the case, sought statutory damages for the alleged violations.

After Symczyk filed suit, but before any other employees joined the suit, the employer sent Symczyk an offer of judgment under Federal Rule of Civil Procedure 68, which Symczyk ignored. The offer had proposed to pay all of her statutory damages, plus costs and reasonable attorney’s fees. The District Court, finding that no one else had joined the case, and that the Rule 68 offer fully satisfied Symczyk’s claim, concluded that Symczyk’s suit was moot. The court therefore dismissed the case for lack of subject-matter jurisdiction.

The Third Circuit reversed, holding that while Symczyk’s individual claim was moot, the collective action on behalf of other similar employees was not. The Third Circuit reasoned that allowing employers to use calculated Rule 68 offers to “pick off” named plaintiff-employees before certification would frustrate the goals of collective actions. The court therefore remanded the case to the trial court, with instructions to allow Symczyk to seek conditional certification of the collective action and move forward with the case on behalf of other employees who might join. See 569 U.S. at 69-71.

The Court’s Decision

The Supreme Court reversed. The Court held that because Symczyk had no “personal interest” in representing other putative, unnamed employees, nor any other kind of continuing interest that would render her suit not moot, the trial court properly determined it lacked subject-matter jurisdiction over the case.

At the outset, the Court declined to decide whether an unaccepted Rule 68 offer that fully satisfies a plaintiff’s individual claim is sufficient to render that claim moot. Symczyk, however, had conceded this point with respect to her claim and did not argue it on appeal. The Court therefore assumed, without deciding, that the employer’s offer to Symczyk mooted her individual claim. 569 U.S. at 72-73.

The Court then determined that “well-settled mootness principles” controlled the outcome of the case. Once Symczyk’s individual claim became moot, the Court determined that the suit became moot because she had no personal interest in representing others in the action. The Court rejected Symczyk’s contrary arguments because they relied on cases that arose in the context of Rule 23 class actions. The Court found those case inapposite, both because Rule 23 actions are “fundamentally different” from FLSA collective actions and because the cases were “inapplicable” to the facts in Symczyk’s case. 569 U.S. at 73-79.

The cases Symczyk rallied behind were Sosna v. Iowa, 419 U.S. 393 (1975) and United States Parole Comm’n v. Geraghty, 445 U.S. 388 (1980). Symczyk argued these cases meant she could seek certification of an FLSA collective action after her individual claim became moot. The Court determined Sosna and Geraghty did not support her position. In short, Sosna held that a class action is not rendered moot when the named plaintiff’s individual claim becomes moot after the class has been duly certified. Geraghty extended those principles to denials of class certification motions, and further provided that, where a putative class action would have acquired independent legal status but for the district court’s erroneous denial of class certification, a corrected ruling on appeal “relates back” to the time of the erroneous denial. See 445 U.S. at 404 and n. 11.

At first glance, these cases seemed like they supported Symczyk’s position. The Court observed, however, that Geraghty’s holding was explicitly limited to cases in which the named plaintiff’s claim remains live at the time the district court denies class certification. See 445 U.S. at 407 and n. 11. Symczyk, by contrast, had not yet moved for “conditional certification” when her claim became moot. Nor had the District Court anticipatorily ruled on any such request. Symczyk therefore had no certification decision to which her claim could have related back. More importantly, the Court emphasized that essential to Sosna and Geraghty was the fact that a putative class acquires an “independent legal status” once it is certified under Rule 23. By contrast, under the FLSA, “conditional certification” does not produce a class with an independent legal status, or join additional parties to the action. 569 U.S. at 73-75.

Second, the Court addressed a line of cases, like County of Riverside v. McLaughlin, 500 U.S. 44, 52 (1991), holding that an “inherently transitory” class-action claim is not necessarily moot upon the termination of the named plaintiff’s claim. The Court found these cases inapplicable. Symczyk argued that an employer’s use of Rule 68 offers to “pick off” a named plaintiff before the collective-action process is complete renders the action “inherently transitory.” But the Court observed the “inherently transitory” rationale was developed to address circumstances in which the defendant’s challenged conduct was effectively unreviewable because no plaintiff possessed a personal stake in the suit long enough for litigation to run its course. For this reason, the Court observed, the McLaughlin line of cases focused on the fleeting nature of the challenged conduct giving rise to the claim, not on the defendant’s litigation strategy. Unlike a claim for injunctive relief, a damages claim (like the FLSA claims at issue in Smyczk’s case) cannot evade review — the damage has been done, and can be measured and compensated. The Court further pointed out that an offer of full settlement cannot insulate such a claim from review. While dismissing Symzcyk’s case before certification would foreclose the putative other plaintiff-employees of Genesis from vindicating their rights in Symzcyk’s suit, those employees would remain free to do so in their own lawsuits. 569 U.S. at 75-77.

Finally, the Court addressed its decision in Deposit Guaranty Nat. Bank v. Roper, 445 U.S. 326 (1980), which Symczyk cited for her argument that the purposes served by the FLSA’s collective-action provisions would be frustrated by defendants’ use of Rule 68 to “pick off” named plaintiffs before the collective-action process has run its course. The Court found Roper did not support this argument. In Roper, the named plaintiffs’ individual claims became moot after the District Court denied their Rule 23 class certification motion and entered judgment in their favor based on defendant’s Rule 68 offer. The Roper Court held that the named plaintiffs could appeal the denial of certification because they possessed an ongoing, personal economic stake in the substantive controversy — namely, to shift a portion of attorney’s fees and expenses to successful class litigants. Symczyk, by contrast, conceded that her employer’s offer provided complete relief, and she asserted no continuing economic interest in shifting attorney’s fees and costs. Moreover, the Roper holding was tied to the unique significance of Rule 23 class certification decisions, distinguishing it from the FLSA collective action context. 569 U.S. at 77-79.

Analysis

In summary, Genesis held that a putative FLSA collective action brought by single employee was no longer justiciable when, as conceded by the employee, her individual claim became moot by an offer of judgment providing complete relief and no other employees had joined the case. The Court, however, declined to decide whether an unaccepted offer of judgment could render a plaintiff’s claim moot. 

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com. 

This blog was also published to TimCoffieldAttorney.com.

FLSA Administrative Employee Exemption: Discretion and Independent Judgment

The Fair Labor Standards Act requires covered employers to pay minimum wages and overtime compensation to certain categories of employees. However, the law contains several exceptions or “exemptions” from these requirements, most of which turn on a combination of the employees’ pay and the nature of employees’ job duties. For example, Section 13(a)(1) of the FLSA, a.k.a. 29 U.S.C. § 213(a)(1), provides an “exemption” from both minimum wage and overtime pay for certain categories of so-called “white collar” employees — namely, employees working as bona fide executive, administrative, professional, or outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempt certain categories of computer employees. 

To qualify for a white collar exemption, employees must be paid on a salary basis at not less than $684 per week (as of January 1, 2020) and have job duties that satisfy certain requirements. Importantly, job titles do not determine whether an employee is exempt from the FLSA. For an employee to be exempt, her actual real-life job duties and salary must meet all the requirements of the FLSA and the Department of Labor’s implementing regulations.

This post will focus on the exemption for administrative employees. The Department of Labor is also an excellent resource for information about the administrative employee exemption. The DOL’s implementing regulations with respect to the administrative employee exemption are generally located at 29 CFR § 541.200-204

Administrative Employee Criteria

To qualify for the administrative employee exemption (and therefore, not be entitled to receive overtime pay under the FLSA), an employee must meet all of the following requirements:

  1. The employee must be compensated on a “salary basis” (as defined in 29 CFR § 541.602) or “fee basis” (as defined in 29 CFR § 541.605) at a rate not less than $684 per week (lower amounts apply for non-federal employees in U.S. territories);
  2. The employee’s “primary duty” must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; 
  3. The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. 

29 CFR § 541.200.

Definition of “Primary Duty”

As used in these regulations, “primary duty” means the principal, main, major or most important duty that the employee performs. Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole. Factors to consider when determining an employee’s primary duty include, without limitations, the relative importance of any exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee’s relative freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee. 29 CFR § 541.700.

Definition of “Directly Related to Management or General Business Operations” 

To meet the “directly related to management or general business operations” requirement, an employee must perform work directly related to assisting with the running or servicing of the business. This is different from, for example, working on a manufacturing production line or selling a product in a retail or service establishment. 29 CFR § 541.201(a).

As defined in the DOL regulations, work “directly related to management or general business operations” includes, but is not limited to, work in functional areas such as tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations; government relations; computer network, Internet and database administration; legal and regulatory compliance; and similar activities. 29 CFR § 541.201(b)

Work Directly Related to Management or Operations of Customers

It’s worth noting that an employee may qualify for the administrative exemption if her primary duty is performing work directly related to the management or general business operations of the “employer’s customers.” 29 CFR § 541.201(a). This means that an employee who acts as a consultant to her employer’s clients or customers — as tax experts or financial consultants, for example — may qualify for the exemption. 29 CFR § 541.201(c).

Definition of “Discretion and Independent Judgment” 

To qualify for the administrative exemption, an employee’s primary duty must include the exercise of discretion and independent judgment with respect to matters of significance. As defined in the regs, the exercise of “discretion and independent judgment” involves comparing and evaluating possible courses of conduct and acting or making a decision after the various possibilities have been considered. 29 CFR § 541.202(a).

The phrase must be applied to all the facts, and implies that the employee has authority to make an independent choice, free from immediate direction or supervision. 29 CFR § 541.202(b)&(c).

In making the “discretion and independent judgment” determination, the regulations provide examples of many factors to consider, including but not limited to: 

  • whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices;
  • whether the employee carries out major assignments in conducting the operations of the business; 
  • whether the employee performs work that affects business operations to a substantial degree; 
  • whether the employee has authority to commit the employer in matters that have significant financial impact;
  • whether the employee has authority to waive or deviate from established policies and procedures without prior approval
  • whether the employee has authority to negotiate and bind the company on significant matters; and
  • other similar factors identified in the regulation. 

29 CFR § 541.202(b).The fact that an employee’s decisions may be revised or reversed after review does not necessarily mean the employee does not exercise discretion and independent judgment. 29 CFR § 541.202(c).

The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources. It also “does not include clerical or secretarial work, recording or tabulating data, or performing other mechanical, repetitive, recurrent or routine work.” 29 CFR § 541.202(e).

Definition of “Matters of Significance” 

As used in the regulations, the term “matters of significance” refers to the level of importance or consequence of the work performed. 29 CFR § 541.202(a). An employee does not exercise discretion and independent judgment with respect to matters of significance just because the employer will experience financial losses if the employee fails to perform the job properly. 29 CFR § 541.202(f). For example, a messenger who is entrusted with carrying large sums of money does not exercise discretion and independent judgment with respect to matters of significance even though serious consequences may flow from the employee’s neglect. Id. Similarly, an employee who operates very expensive equipment does not exercise discretion and independent judgment with respect to matters of significance merely because improper performance of the employee’s duties may cause serious financial loss to the employer. Id.

Administrative Employee Examples

The regulations contain many examples and explanations regarding specific categories of employees who typically may or may not qualify for the administrative employee exemption. Those examples and explanations are located at 29 CFR § 541.203.

Educational Establishments

The administrative exemption may also be available to employees who meet the salary basis or fee basis test, or on a salary basis which is “at least equal to the entrance salary for teachers in the same educational establishment,”  and whose primary duty is “performing administrative functions directly related to academic instruction or training in an educational establishment.” 29 CFR § 541.204(a).

The term “educational establishment” means an elementary or secondary school system, an institution of higher education or other educational institution. 29 CFR § 541.204(c).

Academic administrative functions include operations directly in the field of education, and do not include jobs relating to areas outside the educational field. 29 CFR § 541.204(c). Employees engaged in academic administrative functions include: the superintendent or other head of an elementary or secondary school system, and any assistants responsible for administration of such matters as curriculum, quality and methods of instructing, measuring and testing the learning potential and achievement of students, establishing and maintaining academic and grading standards, and other aspects of the teaching program; the principal and any vice-principals responsible for the operation of an elementary or secondary school; department heads in institutions of higher education responsible for the various subject matter departments; academic counselors and other employees with similar responsibilities. 29 CFR § 541.204(c)(1).

These categories of academic employees may qualify for the administrative exemption because having a primary duty of performing administrative functions directly related to academic instruction or training in an educational establishment necessarily involves exercising discretion and independent judgment with respect to matters of significance.

Highly Compensated Employees 

Highly compensated employees performing office or non-manual work and paid total annual compensation of $107,432 or more (which, as of January 1, 2020, must include at least $684 per week paid on a salary or fee basis) are exempt from the FLSA if they “customarily and regularly” perform at least one of the duties of an exempt executive, administrative or professional employee. 29 CFR § 541.601.

The term “customarily and regularly” means a frequency that must be “greater than occasional” but which “may be less than constant.” 29 CFR § 541.701. Tasks or work performed “customarily and regularly” includes work normally and recurrently performed every workweek; it does not include isolated or one-time tasks. Id.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com. 

This blog was also published to TimCoffieldAttorney.net.

Falk v. Brennan: Law of Employment and Control

In Falk v. Brennan, 414 U.S. 190 (1973), the Supreme Court held that an entity is an “employer” under the Fair Labor Standards Act when it exercises substantial control over the terms and conditions of the work of the employees at issue.

Background

The Fair Labor Standards Act generally requires a covered “employer” to pay its covered nonexempt employees minimum wages for each hour worked and overtime wages for all hours worked in excess of 40 hours per workweek. 29 U.S.C. §§ 206(a) & 207(a). The FLSA defines “employer” as “includ[ing] any person acting directly or indirectly in the interest of an employer in relation to an employee[.]” 29 U.S.C. § 203(d). With some exceptions, the FLSA generally defines “employee” as “any individual employed by an employer.” 29 U.S.C. § 203(e)(1). The FLSA defines “employ” as including “to suffer or permit to work.” 29 U.S.C. § 203(g).

The FLSA also provides that for an employer to be covered under the Act’s dollar-volume “enterprise” coverage provision, the employer must receive “annual gross volume of sales made or business done [] not less than $500,000[.]” 29 U.S.C. § 203(s)(1)(A)(ii).

Facts

D&F operated a property management company in Virginia. It rendered management services for the owners of several apartment complexes. Under its contracts with the apartment owners, D&F agreed to perform, on behalf of each owner and under his “nominal” supervision, “virtually all management functions that are ordinarily required for the proper functioning of an apartment complex.” 414 U.S. at 192. Those functions included advertising the apartments; signing, renewing, and canceling leases; collecting rents; instituting and settling all legal proceedings for eviction, possession of the premises, and unpaid rent; making necessary repairs and alterations; negotiating contracts for essential utilities and other services; purchasing supplies; paying bills; preparing operating budgets for the property owners’ review and approval; submitting periodic reports to the owners; and “hiring and supervising all employees required for the operation and maintenance of the buildings and grounds.” Id. at n4.

As compensation, D&F received a fixed percentage of the gross rents collected from each project. D&F deposited the rents it collected in local bank accounts. From these accounts it paid all expenses incurred in operating and maintaining the buildings. After deducting its compensation, as well as other expenses, D&F periodically transmitted payments to the various apartment owners. If disbursements for any apartment complex exceeded the gross rental receipts, the owner was required to reimburse D&F. 414 U.S. at 192-93. D&F collected about $8 million dollars per year in rents for all the buildings it managed. Id. at n6. However, its gross commissions received on those rentals were less than $500,000 per year. Id. at n10.

The Secretary of Labor filed suit against D&F on behalf of the maintenance workers, alleging that D&F violated the minimum wage, overtime, and recordkeeping requirements of the FLSA with respect to those workers. Id. Significantly, these employees worked under the supervision of D&F and were paid from the rents received at the apartment complexes where they worked. Under the contracts between the apartment owners and D&F, the maintenance workers were considered to be “employees of the project owners.” Id.

A central question for the Court was whether the maintenance workers were also employees of D&F, such that D&F was responsible for complying with the FLSA’s minimum wage, overtime, and recordkeeping requirements with respect to those workers.

A secondary question was which figure should be considered in determining whether D&F met the $500,000 threshold for enterprise coverage: D&F’s gross rentals collected ($8M annually), or D&F’s gross commissions on those rentals (less than $500,000).

The Court’s Decision

The Court held that in addition to the apartment owners, D&F was also an FLSA “employer” of the maintenance workers — even though the owners and D&F had agreed that the workers were employees only of the owners. The Court reached this decision by interpreting the operative provisions of the FLSA as speaking to the extent of control a potential “employer” exercises over a worker.

First, the Court observed that Section 203(d) of the FLSA defines “employer” as ‘any person acting directly or indirectly in the interest of an employer in relation to an employee.’ 29 U.S.C. § 203(d). It further noted that Section 3(e) defines ‘employee’ to include ‘any individual employed by an employer.’ 29 U.S.C. s 203(e). Significantly, the Court interpreted these two provisions as providing an “expansive[]” definition of “employer” — meaning that whether an entity was an FLSA employer, with the attendant minimum wage, overtime, and recordkeeping responsibilities, could not be controlled by an agreement between entities that only one of them would be the “employer.”

The Court further indicated that the relevant inquiry, in answering the “employer” question, was whether the potential employer had “substantial control of the terms and conditions of the work” the employees performed. Id. at 195. D&F, for example, appears to have had supervisory powers with respect to the maintenance workers at the buildings it managed. See id. at 193 (“These employees work under the supervision of D&F”). The Court therefore determined that “in view of the expansiveness of [the FLSA’s] definition of ‘employer’ and the extent of D&F’s managerial responsibilities at each of the buildings, which gave it substantial control of the terms and conditions of the work of these employees,” D&F was pursuant to the FLSA an ‘employer’ of the maintenance workers Id.

With respect to the dollar-volume limitation question, the Court observed that D&F “sells” only professional management services, and therefore the gross rentals it collected as part of rendering those services to building owners did not represent sales attributable to D&F. Id. at 197-201. Based on this reasoning, the Court concluded D&F’s commissions were the relevant measure of its gross sales made or business done for purposes of the dollar-volume limitation in Section 203(s)(1). Thus, even though D&F was an “employer” under the the terms of the FLSA, and an “enterprise” under Section 203(r), the FLSA did not apply to D&F because its gross sales were below the Section 203(s)(1) dollar-volume threshold. Id. at 201.

Analysis

In sum, Falk v. Brennan held that an entity is an “employer” under the FLSA when it exercises substantial control over the terms and conditions of the work of employees at issue. This decision later became relevant to the Department of Labor’s development of regulations guiding the analysis of FLSA “joint employment” situations. In those situations, where more than one entity benefits from the work of employees, the extent to which each entity exercises control over the terms and conditions of the workers’ employment is an important consideration in determining the entities’ respective or joint responsibilities under the FLSA. For the DOL’s analysis of its most recent changes to the rule (29 C.F.R. § 791) regarding joint employment, effective March 2020, go here.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

This blog was also published to TimCoffieldAttorney.com.

Wage Law for Fire Protection and Law Enforcement Personnel

The Fair Labor Standards Act requires covered employers to pay minimum wages and overtime compensation to certain categories of employees. The rights afforded by the FLSA apply to covered employees of public agencies, including most employees working fire protection or law enforcement jobs for state or local governments. However, the FLSA contains some unique provisions that apply only to fire protection and law enforcement personnel. This post summarizes some of those provisions. The US Department of Labor is also an excellent resource for information about the FLSA rights of state and local government employees.

Characteristics of Fire Protections and Law Enforcement Personnel

Under the FLSA, fire protection personnel include firefighters, paramedics, emergency medical technicians, rescue workers, ambulance personnel, or hazardous materials workers who: (1) are trained in fire suppression, have the legal authority and responsibility to engage in fire suppression, and are employed by a fire department of a municipality, county, fire district, or state, and (2) are engaged in the prevention, control, and extinguishment of fires or response to emergency situations where life, property, or the environment is at risk. 29 U.S.C. § 203(y).

Notably, the FLSA does not place a limit on how much nonexempt work a worker employed in fire protection activities may perform. As long as the employee satisfies the criteria in Section 203(y), she is “employed in fire protection activities” as far as the FLSA is concerned.

Under the FLSA, law enforcement personnel are employees who are (1) empowered by state or local ordinance to enforce laws designed to maintain peace and order, protect life and property, and to prevent and detect crimes; (2) who have the power to arrest; and (3) who have undergone training in law enforcement. 29 C.F.R. § 553.211(a).

Law enforcement personnel may perform some nonexempt work that is not performed as an incident to or in conjunction with their law enforcement activities. But a worker who spends more than 20 percent of the workweek or applicable work period in nonexempt activities is not considered to be an “employee engaged in law enforcement activities” for the purposes of the FLSA. 29 C.F.R. ¶ § 553.212.

Additionally, fire protection and law enforcement employees may at their own option perform special duty work in fire protection and law enforcement for a separate and independent employer without including those wages and hours in regular rate or overtime determinations for the primary public employer. 29 U.S.C. § 207(p)(1).

Compensatory Time in Lieu of Cash Overtime

Like other employees of other public agencies, firefighters and police officers may receive a certain amount of “compensatory time” in lieu of cash overtime wages. Compensatory time is paid time off. Under certain circumstances, the FLSA allows public fire departments and police departments to give nonexempt employees who work overtime hours compensatory time off, instead of cash overtime pay. The amount of compensatory time off the employer gives should correspond to the overtime rate — that is, firefighters and police officers must receive at least one and one-half hours of paid time off for each overtime hour worked. 29 U.S.C. § 207(o). The FLSA further provides that fire departments and police departments, like other public agencies, must allow employees to use their compensatory time with a “reasonable period” of time after they make a request, unless doing so would “unduly disrupt” the operations of the agency. 29 U.S.C. §§ 207(o)(5). Generally, this means fire departments and police departments in normal circumstances should allow employees to use compensatory time on the dates they request.

Special Limits on Accrued Compensatory Time for Firefighters and Police

Compensatory time can accumulate, similar to vacation time. Importantly, as with other public employees, if firefighters and police officers do not use their accumulated compensatory time, under certain circumstances the FLSA entitles them to receive cash compensation. 29 U.S.C. § 207(o)(3)-(4). The FLSA also places special limits, different from the limits for other public employees, on the amount of compensatory time that fire protection and law enforcement personnel may receive in lieu of cash overtime wages. Law enforcement, fire protection, and emergency response personnel and employees engaged in seasonal activities may accrue up to 480 hours of comp time (representing 320 overtime hours worked). 29 U.S.C. § 207(o)(3)(A). This is different from other public employees, who may accrue up to 240 hours of compensatory time (representing 160 hours of overtime worked). Once a fire protection or law enforcement employee accrues the maximum amount of unused compensatory time hours — 480 — she must be paid cash overtime wages for all additional overtime hours. 29 U.S.C. § 207(o)(3)(A).

Significantly, the Supreme Court has held that the Fair Labor Standards Act does not prohibit public employers from compelling employees to use compensatory time. Christensen v. Harris County, 529 U.S. 576 (2000).

Special Overtime Calculation Rules for Firefighters and Police

The FLSA provides that covered nonexempt employees in most lines of work are entitled to overtime pay (or compensatory time in lieu of overtime pay) for all hours worked in excess of 40 in a 7-day workweek. That is not necessarily the case for firefighters and police officers. Because the work schedules of firefighters and police officers traditionally differ from a standard 40-hour per seven-day workweek, the FLSA provides some special rules for calculating overtime compensation (or compensatory time) for fire protection and law enforcement personnel.

Specifically, fire departments or police departments may establish a work period ranging from 7 to 28 days in which overtime need be paid only after a specified number of hours in each work period. 29 U.S.C. § 207(k). In the case of a 28-day work period, fire protection employees are entitled to overtime pay (or compensatory time) for hours worked in excess of 212 hours during the period, while law enforcement personnel are entitled to overtime pay (or compensatory time) for hours worked in excess of 171 hours during the period. 29 C.F.R. § 553.230(a)-(b).

In the case of fire protection or law enforcement employees who have a work period of at least 7 but less than 28 consecutive days, overtime compensation is required when the ratio of the number of hours worked to the number of days in the work period exceeds the ratio of 212 (or 171) hours to 28 days. 29 C.F.R. § § 553.20129 C.F.R. § 553.230 (conversion table for ratios). For fire protection personnel, that ratio works out to 7.57 hours per day (rounded); for law enforcement personnel, that ratio works out to 6.11 hours per day (rounded).  29 C.F.R. § 553.230(c).

Maximum Hours by Work Period for Fire Protection and Law Enforcement Personnel 

Here is a copy of the maximum hours conversion table, showing the amount of hours fire protection or law enforcement may work during a work period, depending on the length of the work period, above which overtime pay or compensatory time is required:

Work Period (Days) Maximum Hour Standards:
Fire Protection
Maximum Hour Standards:
Law Enforcement
28 212 171
27 204 165
26 197 159
25 189 153
24 182 147
23 174 141
22 167 134
21 159 128
20 151 122
19 144 116
18 136 110
17 129 104
16 121 98
15 114 92
14 106 86
13 98 79
12 91 73
11 83 67
10 76 61
9 68 55
8 61 49
7 53 43

29 C.F.R. § 553.230.

Payment of Accrued Compensatory Time at Termination

At the end of a fire protection or law enforcement employee’s employment, she is generally entitled to receive a cash payment for any unused compensatory time. Because rates of pay may vary over the course of employment, the FLSA provides specific instructions for calculating the cash value of unused compensatory time. Specifically, like other public agency employees, at the time of termination, a fire protection or law enforcement employee must be paid the higher of

(A) the average regular rate during her last three years of employment, or

(B) her final regular rate of pay,

for any unused accrued compensatory time remaining when the termination occurs. 29 U.S.C. § 207(o)(4).

Exemption for Small Fire and Police Departments

The FLSA also provides an overtime exemption for very small fire departments and police departments. Specifically, any employee who in any workweek is employed by an agency employing fewer than 5 employees in fire protection or law enforcement may be exempt from overtime. 29 U.S.C. § 213(b)(20).

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

This blog was also published to TimCoffieldAttorney.net.

Wage Law Basics for Public Employees

The Fair Labor Standards Act requires covered employers to pay minimum wages and overtime compensation to certain categories of employees. The rights afforded by the FLSA apply to employees in the private sector as well as employees of state and local governments. However, the FLSA contains some unique provisions that apply only to state and local government employers and their employees. This post summarizes some of those provisions. The US Department of Labor is also an excellent resource for information about the FLSA rights of state and local government employees.

State and Local Government Employer Coverage 

The FLSA defines a covered “employer” to include “any person acting directly or indirectly in the interest of an employer in relation to an employee and includes a public agency[.]” 29 U.S.C. §§ 203(d). It goes on to define “public agency” as “the Government of the United States; the government of a State or political subdivision thereof; any agency of the United States … a State, or a political subdivision of a State; or any interstate governmental agency. 29 U.S.C. §§ 203(x). The FLSA therefore applies to state and local government employers. Notably, the definition of “public agency” does not extend to private companies that engage in activities often performed by public employees, such as government contractors.

Coverage of State and Local Government Employees

The FLSA also makes clear that its rights apply to public agency employees under the law’s “enterprise” coverage provision. 29 U.S.C. § 203(s)(1)(C).

General Requirements 

As with private employers, the FLSA generally requires public agency employers to pay all covered nonexempt employees at least the federal minimum wage, which is currently $7.25 per hour. 29 U.S.C. § 206(a). The FLSA also requires public agency employers to comply with the law’s youth employment standards and recordkeeping requirements. 29 U.S.C. § 206(g) (youth employment standards ) &  29 C.F.R. § 516 (recordkeeping requirements). And as with private employers, the FLSA generally requires public agency employers pay covered nonexempt employees overtime compensation — that is, wages equal to at least one and one-half times the employees’ regular rates of pay for all hours worked over 40 in the workweek. 29 U.S.C. § 207(a).

Compensatory Time for Public Agency Employees

Unlike private employers, however, public agencies may have the option of offering covered employees a certain amount of “compensatory time” in lieu of paying them cash overtime wages. Compensatory time is paid time off. Under certain circumstances, the FLSA allows state and local government agencies to give nonexempt employees who work overtime hours compensatory time off, instead of cash overtime pay. The amount of compensatory time off the employer gives should correspond to the overtime rate — that is, public employees must receive at least one and one-half hours of paid time off for each overtime hour worked. 29 U.S.C. § 207(o). The FLSA further provides that a public agency must allow employees to use their compensatory time with a “reasonable period” of time after they make a request, unless doing so would “unduly disrupt” the operations of the agency. 29 U.S.C. §§ 207(o)(5). Generally, this means public agencies in normal circumstances should allow employees to use compensatory time on the dates they request.

Accrual of Compensatory Time and Limits

Much like vacation time voluntarily offered by some employers, compensatory time can accumulate. Importantly, if employees do not use their accumulated compensatory time, under certain circumstances the FLSA requires the public agency employer to pay the employees cash compensation. 29 U.S.C. § 207(o)(3)-(4). The FLSA also places limits on the amount of compensatory time that a public agency may give an employee in lieu of paying cash overtime wages. Law enforcement, fire protection, and emergency response personnel and employees engaged in seasonal activities may accrue up to 480 hours of compensatory time (representing 320 overtime hours worked). 29 U.S.C. § 207(o)(3)(A). All other state and local government employees may accrue up to 240 hours (representing 160 overtime hours worked). Id. Once an employee accrues the maximum amount of unused compensatory time hours — either 480 or 240, as the case may be — the public agency employer must pay that employee cash overtime wages for all additional overtime hours. 29 U.S.C. § 207(o)(3)(A).

Payment for Accrued Compensatory Time at Termination

At the end of a public agency employee’s employment, she is generally entitled to receive a cash payment for any unused compensatory time. Because rates of pay may vary over the course of employment, the FLSA provides specific instructions for calculating the cash value of unused compensatory time. Specifically, at the time of termination a public agency employee must be paid the higher of (A) the average regular rate during her last three years of employment, or (B) her final regular rate of pay, for any unused accrued compensatory time remaining when the termination occurs. 29 U.S.C. § 207(o)(4).

Possible Differences in Calculation of Overtime Pay – Special Cases

For certain categories of public agency employees, the calculation of overtime pay may differ from the general requirements of the FLSA. For example:

  • For employees who solely at their option occasionally or sporadically work on a part-time basis for the same public agency in a different capacity than the one in which they are normally employed, the hours worked in the different employment may be excluded by the public agency in calculating hours for which the employee is entitled to overtime compensation. 29 U.S.C. § 207(p)(2) & 29 CFR § 553.30;
  • For employees who at their option with approval of the agency substitute for another during scheduled work hours in the same work capacity, the hours the employee worked as a substitute may be excluded by the public agency in calculating hours for which the employee is entitled to overtime compensation. 29 U.S.C. § 207(p)(3);
  • Employees who meet exemption requirements for Executive, Administrative, Professional or Outside Sales occupations may be exempt from overtime pay. 29 U.S.C. § 213(a)(1);
  • Hospital or residential care establishments may, with agreement or understanding of employees, adopt a fixed work period of 14 consecutive days and pay overtime after 8 hours in a day or 80 in the work period, whichever is greater. 29 U.S.C. § 207(j);
  • For mass transit employees who spend some time engaged in charter activities, under certain circumstances the employer, in calculating the overtime rate, may exclude the hours the employee was employed in charter activities if (1) the employee’s employment in such activities was pursuant to an agreement or understanding with his employer arrived at before engaging in such employment, and (2) if employment in such activities is not part of such employee’s regular employment. 29 U.S.C. § 207(n)
  • Employees working in separate seasonal amusement or recreational establishments such as swimming pools, parks, etc., may be exempt from overtime pay. 29 U.S.C. § 213(a)(3).

Importantly, some states with concurrent wage laws may not recognize or allow some or all of the above exemptions. Because employers must comply with the most stringent of the state or federal provisions, it is imperative that employers review applicable state laws before applying any of these exclusions or exemptions.

Special Rules for Firefighters and Law Enforcement Personnel

The FLSA also provides some special rules for fire protection and law enforcement personnel — public employees whose work schedules traditionally differ from a 40-hour per seven-day workweek.

Under the FLSA, fire protection personnel include firefighters, paramedics, emergency medical technicians, rescue workers, ambulance personnel, or hazardous materials workers who: (1) are trained in fire suppression, have the legal authority and responsibility to engage in fire suppression, and are employed by a fire department of a municipality, county, fire district, or state, and (2) are engaged in the prevention, control, and extinguishment of fires or response to emergency situations where life, property, or the environment is at risk. 29 U.S.C. § 203(y).

Notably, the FLSA does not place a limit on how much nonexempt work a worker employed in fire protection activities may perform. As long as the employee satisfies the criteria in Section 203(y), she is “employed in fire protection activities” as far as the FLSA is concerned.

Under the FLSA, law enforcement personnel are employees who are (1) empowered by state or local ordinance to enforce laws designed to maintain peace and order, protect life and property, and to prevent and detect crimes; (2) who have the power to arrest; and (3) who have undergone training in law enforcement. 29 C.F.R. § 553.211(a).

Law enforcement personnel may perform some nonexempt work that is not performed as an incident to or in conjunction with their law enforcement activities. But a worker who spends more than 20 percent of the workweek or applicable work period in nonexempt activities is not considered to be an “employee engaged in law enforcement activities” for the purposes of the FLSA. 29 C.F.R. § 553.212.

Additionally, fire protection and law enforcement employees may at their own option perform special duty work in fire protection and law enforcement for a separate and independent employer without including the wages and hours in regular rate or overtime determinations for the primary public employer. 29 U.S.C. § 207(p)(1).

For the purposes of calculating overtime worked, the FLSA also allows fire departments and police departments to establish special work periods that differ from the traditional 7-day workweek. Specifically, fire departments or police departments may establish a work period ranging from 7 to 28 days in which overtime need be paid only after a specified number of hours in each work period. 29 U.S.C. § 207(k). In the case of a 28-day work period, fire protection employees are entitled to overtime pay (or compensatory time) for hours worked in excess of 212 hours during the period, while law enforcement personnel are entitled to overtime pay (or compensatory time) for hours worked in excess of 171 hours during the period. 29 C.F.R. § 553.230(a)-(b).

In the case of fire protection or law enforcement employees who have a work period of at least 7 but less than 28 consecutive days, overtime compensation is required when the ratio of the number of hours worked to the number of days in the work period exceeds the ratio of 212 (or 171) hours to 28 days. 29 C.F.R. § § 553.20129 C.F.R. § 553.230 (conversion table for ratios). For fire protection personnel, that ratio works out to 7.57 hours per day (rounded); for law enforcement personnel, that ratio works out to 6.11 hours per day (rounded).  29 C.F.R. § 553.230(c).

The FLSA also provides an overtime exemption for very small fire departments and police departments. Specifically, any employee who in any workweek is employed by an agency employing fewer than 5 employees in fire protection or law enforcement may be exempt from overtime. 29 U.S.C. § 213(b)(20).

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

This blog was also published to TimCoffieldAttorney.net.