This is the fifth 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 which types of remuneration 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 #5 – Premium Pay Exception
Premium pay for work performed outside of the normal work day or workweek, on Saturdays, Sundays, holidays, or other “special” days, and premium pay required by a collective bargaining agreement (CBA) can be excluded from the regular rate. This is a relatively straight forward regular rate exception. Here are a couple of examples:
- Firefighter A receives premium pay (time and one-half) for working a holiday. The amount paid as an overtime premium may be excluded from his or her regular rate.
- Firefighter B’s employment contract requires premium pay (time and one-half) for all hours worked over his or her normally scheduled hours. The amount paid as an overtime premium may also be excluded from his or her regular rate.
Premium payments must be at least time and one half in order to meet this exception. Payments in excess of time and one half (double time, triple time, etc.) also qualify as premium payments under this exception. However, payments of less than time and one half will not. For example, if a fire department pays firefighters time and one-quarter for working holidays, or other “special” days, the entire payment would need to include in the regular rate.
Stay tuned for the final installment in the six-part series on the regular rate and firefighters: Regular Rate Exclusion #6: Profit Sharing Exception.