By John M. (Jack) Collins, General Counsel, Massachusetts Chiefs of Police Association, Grafton, Massachusetts
unicipalities that misclassify persons as “salary exempt” employees under the Fair Labor Standards Act (FLSA) may face significant penalties in the event of an audit by the U.S. Department of Labor (DOL) or a civil suit filedby or on behalf of one or more employees.1 A self-audit of all positions, followed by an annual review, is the best way to avoid or at least minimize exposure to claims for back pay, liquidated damages (double pay), and attorney’s fees.
Who Is Exempt?
Unless employees fall under one of the narrow exemptions spelled out in the FLSA, they must be paid overtime for all hours actually worked above the applicable overtime threshold. Except for police officers and firefighters, the overtime threshold for municipal workers is 40 hours in a seven-day work week. If the municipality adopts the §207(k) exemption, it may adopt a work period covering anywhere between 7 and 28 days in length. In that case, the overtime thresholds listed in the table at right would apply.
For example, if a community selected a 24-day work period (equivalent to four weeks under a 4-2 schedule), all time actually worked by police officers in excess of 147 hours during a given work period must be paid at the FLSA overtime rate.
However, a police department with fewer than five employees in a given week is exempt from the FLSA’s overtime provisions for such a week.
In order to be exempt, employees must both meet the salary threshold and fall under one of the exempt duty categories.
Only employees that are paid a salary can qualify as “salary exempt” under the FLSA. Employees must be paid at least $455 per week (seven-day period). This figure applies regardless of the number of hours a person is expected to work. (Whether the municipality refers to a position as full or part time is irrelevant; unless the salary is set at no less than $455 per sevenday week, the person is nonexempt.)
Employees who earn $100,000 per year or more and who customarily and regularly perform any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee are exempt from the FLSA’s overtime requirements. Such employees must receive at least $455 per week on a salary basis to qualify for this exemption.
Employees who meet the salary level test ($455 per week) and the salary basis test—that is, who are actually paid the same salary each week regardless of the number of hours worked—must still pass the “duties test” to be considered exempt from the FLSA’s overtime rules. This means that for employees paid a salary of between $23,660 and $100,000 per year, the municipality should determine whether such employees also satisfy the duties test.
It is an employee’s primary duties that are considered in deciding whether the elements of the duties test have been satisfied. In most cases, where employees spend most of their time performing exempt work, the “primary duty” requirement is likely to be satisfied. A certain amount of nonexempt work is allowed as long as it is “directly and closely related” to the performance of exempt work. (There are other exceptions that relate to infrequently recurring tasks that cannot practically be performed by nonexempt employees but are the means by which exempt employees can properly carry out exempt functions and responsibilities.)
Executive Exemption: In order to qualify for an executive exemption, the following criteria must be met:
- An employee’s primary duty must consist of managing the municipality or one of its departments or subdivisions.
- The employee must customarily and regularly direct the work of two or more other employees.
- The person must have the authority to hire or fire other employees or at least have their suggestions and recommendations concerning the hiring, firing, advancement, promotion, or any other change of status given particular weight.
The most recent amendments to the FLSA, effective in August 2004, specifically categorized police officers, firefighters, and paramedics as nonexempt “first responders.” Until a court clarifies this, whether the new provision covers chiefs and other law enforcement supervisors remains unclear. However, it appears that most experts agree that the new provision is probably limited to those performing street duty, at least patrol officers. In two recent First Circuit Court cases, sergeants and lieutenants were classified as exempt.2 However, higher ranks such as sergeants, lieutenants, or captains may also be nonexempt if they fail to pass the “duty test” but not simply because they fall under the new “police officer” language of the FLSA. In most cases, chiefs will continue to be salary exempt if they meet the salary tests and supervise the equivalent of at least two full-time positions. However, in smaller towns, especially where the chief functions as a “glorified patrol officer,” the exemption may not apply.
Administrative Exemption: In order to qualify for an administrative exemption, the following criteria must be met:
- An employee’s primary duty must consist of the performance of office or nonmanual work directly related to the management or general operations of the employer or the employee’s customers.
- The primary duty must include the exercise of discretion and independent judgment with respect to matters of significance.
In a police department, the following specialty positions might qualify for the administrative exemption:
- Public information officer (PIO)
- Community service officer (CSO)
- Safety officer
- Human resource officer
- Administrative officer (or assistant)
- Accreditation officer
- Research and planning officer
- Procurement officer
- Internal affairs officer
- Finance officer
- Public relations officer
This list is not meant to be exhaustive; it is extrapolated from a list of positions that the DOL has identified in the private sector that usually qualify for an administrative exemption from overtime.
In order to satisfy the “exercise of discretion” and “independent judgment” elements of this exemption, an employee must have the authority to make an independent choice without immediate direction or supervision. A review at a higher level will not defeat the exemption.
Computer Professionals: Some departments have hired full-time computer “technicians.” In most cases, these persons will not qualify for the “computer professional” exemption. This exemption is reserved for highly skilled employees who have achieved a level of proficiency in the theoretical and practical application of highly specialized knowledge in computer systems analysis, programming, and software engineering.
Police departments should review all positions to determine which are exempt from overtime pay requirements under the FLSA. “Street cops,” as designated “first responders,” were deemed nonexempt by the 2004 amendments to the FLSA. This means that at least police officers and detectives must be paid overtime if they work over their FLSA threshold. Specialists and others with supervisory ranks may qualify under the executive or administrative exemptions as long as their salary is at least $455 per week and their primary duties meet the tests of the applicable exemption. ¦
1Fair Labor Standards Act, 29 U.S.C. 201 et seq. See http://www.dol.gov/compliance/laws/comp-flsa.htm (accessed December 10, 2007).
2Murphy v. Town of Natick, Civil Action No. 04-11996 (Sept. 25, 2007; D. Mass); O’Brien v. Town of Agawam, 350 F.3d 279 (1st Cir. 2003).