Right now, thousands of officers are heading to off-duty details. They’re wearing department-issued uniforms, carrying service weapons, and representing their agencies in the public’s eyes. And, often, neither they nor their chiefs have a clear answer to a basic question: If something goes wrong tonight, who is responsible?

When working as a labor leader advocating for officers or as a policy advisor working with command staff and city leadership, it is easy to see what happens when the answer is unclear. It shows up as an injured officer with no path to coverage, a city attorney scrambling to determine exposure, or a chief explaining something they didn’t understand until it became a crisis. Over the past year, two court cases and a growing body of federal enforcement activity have made it impossible to look away. The legal, financial, and regulatory risks hiding inside an agency’s off-duty program are real, quantifiable, and coming due.

The Licensing Problem Nobody Has Examined

Every state regulates who can furnish armed personnel for hire to protect life or property. The statutes use different names (private security agency, guard agency, or protective services company), but the threshold is consistent: Those in the business of supplying people to perform security functions for paying clients need a license. Function, not a company’s self-identification, triggers these laws.

Consider this: If a third-party vendor is recruiting the officers, assigning them to private security details, guaranteeing their pay, accepting client payments directly, and carrying workers’ compensation insurance on their work, what exactly is that vendor doing that a licensed private security company does not?

The distinction that matters is not whether a company uses technology. It’s on whose behalf the work is being performed. A platform that processes payments as a pass-through, provides scheduling tools, and enables the department to manage its own officers is performing administrative services on behalf of the department. By contrast, a vendor that receives all client funds directly, guarantees officer payments out of its own revenue, carries insurance on officers it doesn’t employ, and coordinates assignments as its own business operation isn’t administering the agency’s program; it’s running its own. Courts and regulators look at who controls the operation and who bears the financial risk. They do not care what a company calls itself. In most jurisdictions, operating that way without a license is illegal.

What makes this especially consequential is that these are services the department procured. A chief, a city manager, or a procurement officer selected the vendor, signed the contract, and authorized officers to participate. When a vendor’s operational model shifts from being a platform to functioning as an unlicensed security agency, the liability falls on the decision-makers who procured those services without performing the necessary legal due diligence to comprehend what they were authorizing.

Two Courts, One Warning

On December 12, 2025, the North Carolina Supreme Court ruled in Lassiter v. Robeson County Sheriff’s Department that a sheriff’s office was the sole employer of a deputy injured on an off-duty highway construction detail.¹ Although the construction company compensated the officers, developed the traffic plan, and assigned general areas, it was not considered their employer because it lacked control over the specific aspects of their work. The department’s captain selected which officers worked, assigned specific positions, set hours, and supervised officers on the ground. The court applied a five-factor control test (equipment, supervision, termination authority, duty assignment, and manner-and-method control). The department held the operational reins on every factor.

The implication is clear. If a department exercises that kind of control—and most do—then the city likely carries the workers’ comp liability for off-duty injuries, regardless of who pays the officers. If a vendor claims to carry that coverage but doesn’t actually control the work, a challenged claim might invalidate the coverage. And if that vendor is exercising the control needed for coverage, they may be operating as an unlicensed private security agency.

Piney v. City of New York shows what happens when off-duty program failures meet class action litigation at scale. Filed in January 2025, the case involves New York City Police Department (NYPD) officers who performed off-duty security work and were paid months late in violation of the Fair Labor Standards Act (FLSA) and New York state labor law.² The suit names the city, the NYPD, and dozens of private businesses. Multiple businesses have already settled, with class certifications approved and fairness hearings extending into 2026. The case against the city and the NYPD remains active. The largest police department in the United States is being sued by its own officers, not over a single incident, but over the systemic failures of the off-duty program itself.

The Math Your City Hasn’t Done

The financial exposure goes beyond litigation costs. Under the FLSA, if officers classified as 1099 independent contractors are determined to be employees, every hour of off-duty work becomes overtime paid at one-and-a-half times the officer’s regular rate. For a midsize department with 100 officers averaging 10 off-duty hours per week at $50 per hour, the unpaid overtime premium is $25 per hour. That equals $25,000 per week, or $1.3 million annually. The FLSA allows a three-year lookback for willful violations, plus liquidated damages equal to the back wages owed. Total exposure for this hypothetical department: $7.8 million—before attorney’s fees, before tax recalculations, and before pension implications. Scale that to a large metropolitan agency, and the numbers move from seven figures to nine.

The classification vulnerability is specific. The FLSA’s economic realities test asks whether a worker bears genuine financial risk. If officers are paid even when the business does not pay, there is no risk of loss. That strongly suggests employee status under federal law. The question isn’t whether officers want to be treated as 1099 contractors. It’s whether the operational reality of the off-duty program supports that classification. If it does not, the consequences fall on the agency and the city.

The Objections Are Predictable. The Math Doesn’t Care.

When a chief raises this issue internally, the pushback comes from predictable places. Unions will argue that compliance means more oversight and less take-home pay, an objection labor leaders understand all too well. However, here’s what union leadership and their members need to consider. Every officer working off duty as a 1099 contractor carries personal tax liability that may be far larger than they realize. The IRS requires a 15.3 percent self-employment tax on 1099 income. Officers who are not properly reporting this income face back taxes, penalties, and interest that accumulate silently. A union’s job is to protect its members, and that protection should include ensuring officers aren’t building a personal financial exposure that could devastate their families.

City leadership will say restructuring is too complicated. It is complicated. But complexity is not an excuse for inaction when the alternative is carrying millions in unacknowledged liability. This profession has faced similar resistance before, most notably when body-worn cameras were first introduced. Officers saw them as surveillance. Unions objected to oversight implications. Chiefs worried about cost and political friction. Today, cameras are standard equipment. The data showed something critics didn’t expect. Cameras protected officers. Complaints dropped. Frivolous lawsuits were dismissed faster. Properly structured off-duty programs work the same way. Transparency and compliance don’t punish officers doing the right thing. They protect them.

Protecting Your Officers and Agencies

Police executives should pull their vendor agreement and read it alongside their state’s private security licensing statute. Have the city attorney and finance officer calculate the actual FLSA exposure. Bring union leadership into the conversation as partners in protecting officers from liability they may not realize they’re carrying. And ask the hard questions about every piece of insurance in the program. On what legal basis does this coverage exist, and would it survive a challenged claim?

Off-duty employment provides essential income for officers and delivers public safety services communities depend on. However, the structure of these programs significantly impacts the officers’ protection, cities’ financial exposure, communities’ trust, and departments’ credibility.

The FLSA doesn’t have a grace period. The IRS doesn’t offer a professional courtesy discount. And until federal employment law changes, law enforcement is not above tax law or labor law.

The bill for noncompliance is coming. The only question is whether a city addresses it proactively, on their terms, or reactively, in response to an audit, a class action, or an officer injury that exposes the whole structure. The first option costs leadership capital. The second costs millions of dollars.

 Notes:

¹Lassiter v. Robeson County Sheriff’s Department, No. 54PA24 (N.C. 2025).

²Piney et al v. City of New York et al, No. 1:25 -cv-00671 (S.D.N.Y. 2025).