The Regular Rate, FLSA, and Firefighters Part III

This is the third installment in a six-part series from FirefighterOvertime.org on the regular rate.

Proper calculation of the regular rate is critical. All FLSA overtime must be at least time and one-half of the regular rate. The regular rate has been referred to as the “linchpin” of the FLSA. Not only is calculating the regular rate important, it can be difficult, especially for firefighters. Calculating the proper regular rate is frequently one of the most challenging administrative tasks for any fire department leader. In fact, the U.S. Supreme Court has written that calculating the regular rate can even be “perplexing” at times.

Properly calculating a firefighter’s regular rate may seem overwhelming at first, but with the proper knowledge, anybody can do it. Failing to include all remuneration in the regular rate is the leading cause of FLSA lawsuits in the fire service today. In this six-part series, we will explore six different forms of remuneration that can be rightfully excluded from the regular rate.

Important Point to Remember

The regular rate must include “all remuneration for employment paid to, or on behalf of, the employee,” with only a few narrow exceptions. That means all the money an employee receives from his or her employer must be included in the regular rate unless it fits into one of these six narrow exceptions.

Regular Rate Exception #3 – Occasional Periods When No Work is Performed Exception

“Payments made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work” or other “similar causes” need not be included in the regular rate.

This exception has two critical requirements:

1. The employer must be paying an employee for not working; and
2. These payments must occur infrequently, sporadically, or unpredictably.

The occasional periods when no work is performed exception applies to payments received by firefighters for not working due to vacation or sick leave.

Generally speaking, this exception also applies to money paid to firefighters for not working holidays. However, there can be limited circumstances that require holiday pay included in the regular rate. Occasionally firefighters and other first responders receive lump-sum payments in lieu of holiday pay. These lump sum payments are made whether the firefighter works the holiday or not. Courts have found lump-sum payments not attributable to specific holidays must be included in the regular rate. Whether holiday pay needs to be included in a firefighter’s regular rate requires a thorough examination of the facts.

Finally, “payments made for occasional periods when no work is performed due to. . .[other] similar causes” does not need to be included in the regular rate. The Department of Labor lists examples of the types of payments that would qualify as a “similar cause.” These include payments to employees for bereavement leave, jury duty, and instances of extreme weather that prevent an employee from driving to work.

Stay tuned for the next installment in the six-part series on the regular rate and firefighters: Regular Rate Exclusion #4: Retirement, Health Care, and Insurance Exception.