Maryland County May Owe Workers Millions In Unpaid Overtime

According to the Capitol Gazette, county officials in Anne Arundel, Maryland, recently discovered an error in calculating overtime pay for many county employees, including police officers and firefighters. County Executive Steve Schuh admits the unintentional error spans the past 10 to 20 years. The error was recently discovered when the county changed payroll vendors. Initial estimates suggest the county may be liable for as much as $5 million in unpaid wages. While specifics remain vague, public safety employees are expected to be the most affected by the miscalculation.

County officials vow to “conduct a payroll forensic audit utilizing an outside, independent auditor in the coming months to ensure employees receive the pay to which they are entitled”. The union representing county firefighters, the International Association of Firefighters (IAFF), Local 1563 sent an email to members writing the payroll error was related to an “underpaid overtime rate.”

Federal law requires all federally mandated overtime be at least time and one-half of an employee’s regular rate of pay. Calculating the regular rate can be very challenging, especially for public safety employees. Failing to include all remuneration in the regular rate is the most common type of FLSA lawsuit being filed in the fire service today.

However, Anne Arundel County officials appear to be taking a very pro-active approach in rectifying the miscalculation. This approach could prove highly beneficial for both county employees and taxpayers. The county has admitted the payroll error, is bringing in qualified experts to determine the scope of the error and is promising to “reimburse” current and former employees any wages owed.

This type of pro-active approach could potentially save the county significant amounts of money. The FLSA requires employers pay employees attorneys’ fees and other court costs if unpaid overtime claims are proven. It is common for these legal fees (for attorneys that represent both the employer and employees) to exceed the amount of wages owed to employees.

Once violations are detected by an employer, best practice dictates a pro-active open-door approach as one of the quickest and least expensive ways to resolve FLSA violations. Unfortunately, some public employers follow what can be referred to as a —bury your head in the sand— approach to FLSA compliance which tends to prolong the process increasing the eventual costs for the employer. While it is too soon to determine if the county’s proactive stance will result in significant cost savings for the county; we will certainly be keeping a close eye on this one.

Here is more from the Capitol Gazette.