Contract Overtime vs. FLSA Overtime

Today’s FLSA Question – I am a firefighter. We have a collective bargaining agreement (CBA) that requires overtime (OT) pay for all hours worked outside of a firefighter’s scheduled shifts, regardless of hours actually worked in the work period. This contract OT rate does not include various monetary incentives (longevity, medic pay, and HAZMAT pay). However, we also receive FLSA OT for hours worked over the maximum hours for our work period. This FLSA OT rate includes these incentives. Does the FLSA allow for two different overtime rates?

Answer: Good question about a very advanced FLSA topic. The short answer to your question is: Yes . . . But as usual, the devil lies in the details. . .

First, all FLSA overtime must be paid at a rate not less than time and one-half of an employee’s regular rate. For more on the regular rate click here. However, there can be a difference between OT required by law (FLSA) as opposed to overtime required by CBA. Under some circumstances, a contract overtime rate can differ from an FLSA overtime rate.

In order to fully understand the differences, we need to explore the difference between base hourly rates and the regular rate.

Base Rate vs. Regular Rate

Many, if not most, firefighters receive a base hourly rate of pay. Very often this base hourly rate is established through a CBA, city policy, or local ordinance.

However, the base hourly rate is not necessarily the firefighter’s regular rate. Theoretically, it could be, but it may not be. The regular rate can only be determined after reviewing all the compensation—or remuneration, as the FLSA refers to it—that a firefighter receives.

Here is an example of base rate vs. regular rate:

Firefighter (FF) Smith receives a base hourly rate of $20 per hour. However, he also receives an additional $2 per hour for having a paramedic license, an additional $1 per hour for being a HAZMAT technician, and an extra $2 per hour in longevity pay. While FF Smith’s base hourly rate is $20 per hour, his regular rate for FLSA OT purposes is actually $25 ($20 + $2 + $1 + $2) per hour.

Now, let’s take this to the next logical step—Contract Overtime vs. FLSA Overtime

Overtime that is due under the contract—not because the FLSA mandated it, but because a CBA prescribes it—can be paid at time and one-half of the base hourly rate. However, all OT mandated by the FLSA, for hours worked over the maximum hours for the work period, must be paid at a rate not less than time and one-half of the regular rate.

Here are a couple of examples that may help clarify:

FF Smith uses sick leave for three 24-hour shifts in a 2-week work period. He is not eligible for any FLSA overtime for this work period; however, he also works an additional 24-hour shift during this same work period. Even after working the additional 24 hours, he is still not eligible for any FLSA OT. The fire department can pay Smith the contract OT rate (time and one-half of base hourly rate) for these additional hours worked. This OT is a result of the contract, not the FLSA. Under these circumstances, he can receive the contract OT rate as opposed to the FLSA overtime rate.

Next, FF Smith works all 5 assigned 24-hour shifts for a 2-week work period. He is entitled to 14 hours of FLSA OT for working his assigned shifts. This OT is mandated by the FLSA. However, Smith also works an additional 24 hours, which the CBA requires to be paid at time and one-half of the base hourly rate. In this circumstance, the FLSA will trump the CBA. The 24 hours of OT must also be paid at a rate not less than time and one-half of Smith’s regular rate. Paying time and one-half of the base hourly rate would be a violation of the FLSA under these circumstances.

Remember, CBAs can provide greater—or more enhanced—benefits than required by the FLSA. However, when a CBA provides a lesser benefit, than required by the FLSA, it will most likely be unenforceable.

Contract overtime vs. FLSA overtime is not an easy concept to grasp—however, any fire department employee responsible for paying and managing firefighters who operate under these circumstances must understand the difference in order to avoid costly errors that could easily land your organization in court.