The City of Lawrence, Kansas has voluntarily agreed to pay $998,600 to 24 police sergeants, 21 fire captains, and 3 other city employees following a recent FLSA review. The review, which was requested by a group of fire captains in 2019, found that the city improperly classified numerous city employees as overtime exempt. As a result of the city’s misclassification the impacted employees were owed close to $1 million in unpaid overtime. The city discovered the error in late 2019 and changed the employees’ status to non-exempt in early 2020. However, it took until recently to calculate the exact amount of back-pay owed and develop a plan for payment. The city plans to pay all impacted employees on April 16, 2021.
Under the FLSA, there is a general presumption that all employees are eligible for overtime. However, the FLSA also allows employers to exempt certain employees from overtime and minimum wage requirements provided certain conditions are met. Whether any employee can be properly classified as an overtime exempt employee depends on the specific facts and circumstances. Each situation is likely different. Also, the employer bears the burden of proving the exemption applies to the individual employees. There is no bright-line FLSA rule that allows employers classify fire captains, police sergeants, or even higher-ranking fire officers or law enforcement officials as overtime exempt employees. The specific facts and circumstances of each situation determines the employee’s overtime status. It is imperative that all employers, especially public sector employers, periodically conduct FLSA reviews to ensure employees are not missclassified.
Here, the City of Lawrence appears to have acted responsibly and prudently. A group of employees voiced their concern over possibly being misclassified as overtime exempt. City officials, with the help of outside consultants, examined the specific duties and salaries paid to the employees in question. The city ultimately concluded these employees were indeed misclassified. The city also looked at other city departments to determine if other city employees were also misclassified. The city corrected any unintentional errors quickly and worked to calculate the back-pay over the past couple of years. This process was undoubtedly complex and required cooperation from both the impacted employees and city officials. However, in the end, the impacted employees were paid what they were owed and a long, protracted legal fight was avoided. This certainly appears to be a win-win for all involved.
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