The Town Council in Dyer, Indiana recently passed a temporary ordinance related to compensating town employees that also serve as paid-on-call firefighters. The ordinance, which was unanimously passed by the council, mandates the town set the overtime rate for town employees that also serve as paid-on-call firefighters, at time and one-half of the “highest regular hourly rate of pay” earned by the employee during that workweek. The new temporary ordinance stems from both FLSA concerns and an apparent inequity between pay rates received by call firefighters.
The FLSA allows an employer to pay an employee two different rates of pay for working two different jobs within the same work week. For example, an employee could earn $25 per hour working in a city’s public works department and only $15 per hour working as a paid-on-call or part-time EMT for the same city. However, as a general rule, the FLSA requires that the hours worked in both capacities be combined in order to determine overtime eligibility for that employee for that workweek.
If the employee works more than 40 hours in that workweek (between both positions), the employee is most likely entitled to FLSA overtime. This requirement is fairly straight-forward and easy to understand. However, the real challenge often arises when trying to determine that employee’s overtime rate for that workweek. Is it time and one-half of $25 or $15 per hour? Or is it something entirely different? This is the challenge Dyer city officials are facing. In response the city passed the temporary ordinance while searching for a long-term solution that will meet FLSA requirements while maintaining fairness and equity among the city’s call firefighters.
Department of Labor (DOL) regulations prescribe two methods of calculating the regular rate for employees receiving two different pay rates in the same workweek. The most common method, often referred to as a “blended rate” can be found at 29 CFR 778.115. This method allows the employer to calculate the weighted average of pay rates earned during each workweek and base the employee’s overtime rate off of that average. The second, and less popular method, which can be found at 29 CFR 778.115 allows the employer to pay the employee’s overtime rate based upon the rate of pay for the work that he or she is performing during the overtime hours. This second method also requires an agreement between both the employer and employee to utilize.
Needless to say, the Town of Dyer was wise to recognize this potential issue and look to address it with a long-term solution that will hopefully prove more equitable for employees while maintaining FLSA compliance. Click here, for more on the story from the Northwest Indiana Times.
Just as a note. This article cites extensively the city’s current hourly compensation practices for “volunteer firefighters.” However, according to the city’s website the fire department is staffed by paid-on-call firefighters. Readers familiar with both the FLSA and volunteer firefighters will likely recognize significant wage and hour issues associated with compensating volunteer firefighters and more specifically compensating volunteer firefighters by the hour. It is most likely safe to assume, the Town of Dyer utilizes paid-on-call and not volunteer firefighters.