COVID-19 Hazardous Duty Pay and the Regular Rate

Today’s FLSA Question: I am a municipal fire chief. In response to the current COVID-19 pandemic our city passed an ordinance providing rank-and-file city firefighters with hazard pay. This hazard pay is above and beyond the firefighters’ normal wages and is payable for every hour worked. In fact, the city even made the payment retroactive to include the last two months. Does the FLSA require hazard pay included in a firefighters’ regular rate? If yes, would we need to retroactively recalculate the firefighters’ wages based on the city’s new plan?

Answer: Chief, as a general rule the FLSA and Department of Labor (DOL) regulations require “extra premiums” paid to employees for performing “hazardous, arduous, or dirty work” included in an employee’s regular rate. In fact, DOL regulations found at 29 CFR §778.207(b) entitled Other types of contract premium pay distinguished contains the following provision:

Nonovertime premiums. The Act requires the inclusion in the regular rate of such extra premiums as nightshift differentials (whether they take the form of a percent of the base rate or an addition of so many cents per hour) and premiums paid for hazardous, arduous or dirty work. It also requires inclusion of any extra compensation which is paid as an incentive for the rapid performance of work, and since any extra compensation in order to qualify as an overtime premium must be provided by a premium rate per hour, except in the special case of pieceworkers as discussed in § 778.418, lump sum premiums which are paid without regard to the number of hours worked are not overtime premiums and must be included in the regular rate. (Emphasis added.)

To answer the second question, the fact that the hazard pay is being paid on a retroactive basis does not change the requirement that it be included in the regular rate. Department of Labor regulations found at 29 CFR §778.303 require retroactive pay increases be included in the employee’s regular rate for the “period of its retroactivity.” So, in other words, if a lump sum amount of hazard pay is provided to first responders based on hours worked over the previous two months, the fire department would be required to look back at that “period of retroactivity” and recalculate the firefighter’s regular rate and make any needed adjustments.

If you have questions similar to this, or any questions regarding the FLSA and how it applies to first responders, please consider joining us for one of the FLSA for Fire Departments live webinars. As many folks are likely aware, we previously offered the FLSA for Fire Departments seminars three-to-four times per year in different geographical regions across the country. However, due to travelling restrictions and concerns, we have opted to move this three-day in-person training to a web-based program. For more on that exciting change in format, please click here.

For information on the September class, click here.

For information on the November class, click here.

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