The City of Providence, RI has settled a 2013 FLSA lawsuit filed by city police officers for more than $1.7 million dollars. According to the Providence Journal, the terms of the settlement require the city to pay $1.5 million to more than 400 current and former officers and an additional $223,000 to the officers’ attorneys. The city has yet to disclose how much money was spent defending the officers’ suit. This is the city’s second high-dollar overtime related legal settlement with public safety employees in recent years. Click here, for more on a multi-million-dollar settlement reached with Providence firefighters last year.
Specifically, Providence police officers claimed the city failed to include longevity pay in their regular rate, which in-turn shorted their overtime rate of pay, in violation of the FLSA. The FLSA requires “all remuneration” paid to an employee included in the regular rate. Generally speaking, longevity payments must be included in an employee’s regular rate. For more on that topic, click here.
Proper calculation of the regular rate is critical since FLSA overtime must be at least time and one-half of the employee’s regular rate. Failing to include specific stipends, bonuses, incentives, and other forms of remuneration in an employee’s regular rate will likely result in short-changing the employee’s overtime rate.
Many employers fail to account for wage augments when calculating an employees regular rate of pay. This is a common FLSA mistake and is completely avoidable. Employers need to be vigilant in monitoring their pay practices to ensure FLSA compliance to avoid these types of circumstances.
Here is more on the story from The Providence Journal.