FLSA Mistakes Do Not Have To Be Costly

Today’s FLSA Question: I am a new fire chief for a mid-sized full-time paid fire department. Our firefighters work a 48/96 schedule with a 24-day work period. Additionally, we provide our firefighters with 12 (24-hour) Kelly Days every year. However, we do not assign a Kelly Day every work period. Instead, we allow our firefighters to use their 12-Kelly Days as they choose over the course of the year. We falsely believed providing our firefighters with 12 (24-hour) Kelly Days per year satisfied our FLSA overtime obligation for all of their regularly scheduled shifts. I recently read your article entitled, “Banking Kelly Days and the FLSA.” After reading this article, I am convinced that we are in violation of the FLSA. As a new fire chief, I want to correct the problem. My firefighters are aware of the error and understand that it was unintentional. The firefighters want to correct the error and develop an FLSA compliant Kelly Day program moving forward. What would you recommend as the first course of action given this situation?

Answer: Chief you are in a tough position. However, there are some positive aspects to your situation that are worth touching on. First, you recognize the error. Second, it is a rather easy error to identify. Third, you are working to fix the error. Fourth, your firefighters seem open-minded and reasonable in working towards a solution. These very important factors impact the way you should approach this type of issue.

My first general recommendation would be to avoid litigation related to unintentional and easily identifiable FLSA infractions. Very often the costs associated with the litigation will outpace any back wages and damages associated with the pay error in the first place. It does not make any sense to litigate rather clear-cut simple FLSA errors. The law in this particular area is pretty clear and the facts are-what-they-are. Engaging in expensive and unnecessary litigation will hurt both the employer and employees in the long run.

I passed this question on to my good friend and colleague Brian Massatt for some further in-sight. Brian is an FLSA litigator and former firefighter. He has extensive knowledge representing clients in both individual and class action FLSA lawsuits. Brian co-teaches the FLSA for Fire Departments seminars with myself and Curt Varone. Based on Brian’s extensive litigation experience I felt that he could provide a valuable perspective given your situation.

Here is Brian’s take:

The first step in figuring out how to resolve an FLSA issue is to determine just how big an issue it is. I call this the FLSA audit. For example, if the most scheduled overtime your firefighters will have is 10 hours per work period and there are approximately 15 work periods in a year, you’re probably looking at no more than a total of 150 hours per year per firefighter. But, firefighters typically don’t actually work all eight shifts each work period. Firefighters may have taken shifts off for vacation, illness, or even used one of the unassigned Kelly Days. Using the Kelly days will most likely prevent them from going over the maximum hours for that work period. Remember, the FLSA only requires overtime payments when the employee works over the maximum hours for the work period. There will undoubtedly be work periods in which no overtime will be owed.  

Also, as part of the FLSA audit, you should conduct a thorough review of other potential FLSA issues that your organization may be facing. For example, if the firefighter’s labor agreement contains a requirement to pay firefighters longevity pay, medic stipends, and other common wage augments; you want to make sure that these are being included in the firefighters’ regular rate. This is a critical component in determining how big of an error really this really is.  

Finally, once the audit is concluded, a wide variety of defenses may apply. Defenses like statute of limitations, good faith, and others may reduce what is owed.

Brian will be discussing FLSA audits, defenses, settlements, and litigation in his upcoming advanced FLSA live webinar, “I Think We Screwed Up, What Do We Do Now?” on August 16, 2021. For more information on this live webinar, click here.