The Regular Rate, FLSA, and Firefighters Part I

This is the first 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 and tools, anybody can do it.

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 virtually all the money an employee receives from his or her employer must be included in the regular rate. Determining what remuneration can be rightfully excluded from the regular rate is often the most challenging part of calculating a firefighter’s regular rate.

Does additional money paid to a firefighter for longevity, health care and pensions, uniform allowance, working out-of-rank, medic certification, holidays, and numerous others need to be included in the regular rate? Let’s take a look.

Regular Rate Exception #1 – Expense Reimbursement Exception 

Money paid to an employee as reimbursement for expenses incurred by the employee “in the furtherance of the employer’s interests” does not need to be included in the employee’s regular rate.

Examples of Expense Reimbursements that can be Excluded from Regular Rate

• Reimbursement of travel expenses to a firefighter attending out-of-town training or a conference. This can include reimbursements for meals and lodging.
• Reimbursement of costs associated with the purchase and maintenance of uniforms required by the fire department.

Occasionally, firefighters receive an allowance that is designed to reimburse them for the costs of purchasing and maintaining uniforms and other specialized equipment. The firefighter is not reimbursed the actual cost, but instead receives a set, predetermined amount of money. This money can also be excluded from the regular rate, if the amount of the allowance is “reasonably approximate” to the “amount expended by an employee in purchasing, laundering, or repairing uniforms or special clothing which his employer requires him to wear.” In the event a court or the DOL determines the amount of the allowance is not “reasonably approximate” to the actual expenses incurred, the excess amount will most likely be included in the regular rate.

Example of Allowance that can be Excluded from Regular Rate

• Fire department provides each firefighter with $1,000 per year as a uniform allowance. As long as the actual cost of purchasing and maintaining uniforms is approximately $1,000 per year, most likely this money would not need to be included in the regular rate.

This is the first of six brief articles outlining the six regular rate exclusions. Please stay tuned for the next.