Today’s FLSA Question: I am a shift commander for a small combination fire department. Historically, shift commanders received comp time in lieu of overtime pay. However, due to COVID and other staff shortages, myself and the other two shift commanders began earning a great deal of comp time. In fact, it got to a point where we couldn’t even use the comp time that we were earning. In response, the department opted to pay out all of our accrued comp time. But this comp time payout did not include our longevity, medic pay or other stipends. Basically, the department utilized our base hourly rate for the payout instead of the FLSA’s regular rate. When our firefighter’s comp time is paid out, the city uses the firefighter’s regular rate. Doesn’t the FLSA require comp time be paid at the employee’s regular rate?
Answer: Excellent question. Yes, you are correct. The FLSA requires that all “payments for unused compensatory time” be “paid at the regular rate earned by the employee at the time the employee receives such payment.” The FLSA requires that all remuneration for employment be included in an employee’s regular rate. As a general rule, longevity pay, medic stipends and similar wage augments must be included in the regular rate calculation. However, there is a great deal more to think about with this question than just the regular rate.
The rules pertaining to FLSA comp time accrual, usage, and eventual payouts only apply to non-exempt [i.e. overtime eligible] employees. As a shift commander, you may qualify as an overtime exempt employee. In other words, if you or the other shift commanders meet any of the FLSA’s overtime exemptions, there is no need to follow the FLSA’s comp time rules. As a result, paying out accrued comp time at an employee’s base rate wouldn’t present an FLSA issue [assuming the base rate is not below the minimum wage].
It is common for overtime exempt employees, like high-ranking chief officers and other high level staff officers, to receive paid time off that is referred to as “comp time.” However, since the officer is not entitled to FLSA overtime, this is not FLSA comp time. That is an important distinction. Here is an example to help clarify:
Deputy Chief Jones is an exempt executive employee and works a Monday-Friday 40-hour schedule. Deputy Jones works his normally scheduled workweek and then works all day Saturday and Sunday administering an entrance exam and physical agility test for new firefighters. The FLSA does not require Deputy Jones receive overtime pay for working either Saturday or Sunday. He is an exempt employee. The following Monday morning, the fire chief tells Deputy Jones to “bank” two days of “comp time” to use some time in the future. This is a common and acceptable practice. However, this is not FLSA comp time.
Whether or not you and the other shift commanders are exempt employees, like Deputy Chief Jones in the above example requires a careful examination of the facts. Here is more on chief officers and comp time: