Union Brief on Overtime Rate of Pay for LEO Claimants

IN THE MATTER IN ARBITRATION BEFORE

SAMUEL A. VITARO, ESQUIRE

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U.S. Department of Homeland Security )

U.S. Immigration and Customs Enforcement ) Case: INS FLSA GRIEVANCE

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Agency, ) (No. 0-AR-3822)

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and )

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American Federation of )

Government Employees )

National Immigration and Naturalization )

Service Council )

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Union. )

____________________________________)

UNION BRIEF CONCERNING

LAW ENFORCEMENT OFFICER

RATE OF PAY ISSUE

I. Introduction

Pursuant to the order of the Arbitrator during the September 28, 2006, hearing concerning the Law Enforcement Officer (hereinafter “LEO”) rate of pay issue, the American Federation of Government Employees, AFL-CIO, National Homeland Security Council[1](hereinafter “Union”) hereby submits its brief on the LEO rate of pay issue.

On January 3, 2006, after a long series of hearings stretching from December 2003 through November 2004, the Arbitrator issued a 700+ page Award making findings as to hours of Fair Labor Standards Act (hereinafter “FLSA”) “suffer or permit” overtime earned by almost 500 individual claimants. Subsequent to both the hearings and the January 3, 2006 Award, the Department of Homeland Security, Immigration and Customs Enforcement[2] (hereinafter the “Agency”) raised an issue as to what hourly rate of pay the LEO claimants in the Award, were entitled to in the payment calculations. The Union objected to the Agency’s rate of pay position and a hearing was held on the LEO rate of pay issue on September 28, 2006.

II. Position of the Parties

1. A. The Union’s Position.

The Union’s position is that the FLSA mandates that the rate of pay for persons found to have worked overtime pursuant to the FLSA, is set by law at the employees basic rate of pay plus 50% of that rate of pay to establish the FLSA hourly rate due employees who have proved an FLSA violation. The liquidated damages provisions of the FLSA multiplies the FLSA overtime award by two (2) to establish the monies due a successful FLSA claimant.

1. B. The Agency’s Position.

The Agency’s position is that despite the awarding of specific hours of FLSA “suffer or permit” overtime by the Arbitrator in his January 3, 2006 Award, the FLSA overtime hourly pay rate, established by law, does not apply. Rather, the Agency’s position is that despite the FLSA’s statutory pay rate, LEO qualified claimants are not entitled to an hourly pay rate of 300% of their basic rate of pay on their successful FLSA claims, but rather, are only entitled to receive monies calculated at a rate of pay of approximately 25% of their basic rate of pay (the Administratively Uncontrollable Overtime rate of pay) plus liquidated damages based upon this 25% basic rate of pay.

III. Argument

A. FEPA vs. FLSA Overtime

To center the argument it first must be recalled that there are two types of overtime in the

federal government:

1. “Title 5 Overtime” is provided via the Federal Employee Pay Act of 1945 (hereinafter “FEPA”), 59 Stat. 295, et seq., June 30, 1945, codified at, 5 U.S.C. §§5542, et seq.
2. “FLSA Overtime” is based upon the Fair Labor Standards Act of 1938, 52 Stat. 1060, et seq., June 25, 1938, codified at, 29 U.S.C. §§201, et seq.

As to the present situation, a principle difference between “Title 5 Overtime” and “FLSA Overtime” is that “Title 5 Overtime” must be approved by a qualified manager in advance. 5 U.S.C. §5542(a); 5 C.F.R. §555.111(a)(1). Without advanced approval from a manager who has been explicitly deputized to authorize overtime, “Title 5 Overtime” cannot be paid a federal employee. See Doe V v. United States, 372 F.3d 1347, 1363 (Fed. Cir. 2004); Bilello v. United States, 174 Ct.Cl. 1253, 1257 (1966); Doe VI v. United States, 463 F.3d 1314, 1322 (Fed. Cir. 2006).

“FLSA Overtime”, on the other hand, has no statutory or regulatory requirement for approval of overtime in advance, but, rather, has an explicit requirement for overtime payment if the employer “suffer or permits” overtime to be worked by an employee. 29 U.S.C. §203(g). See Holzapfel v. Town of Newburgh, NY, 145 F.3d 516 (2nd Cir. 1998).

The distinction between “Title 5 Overtime” and “FLSA Overtime” is vital to the understanding of the concept of Administratively Uncontrollable Overtime (hereinafter “AUO”). AUO is a necessary by-product of “Title 5 Overtime” when urgent Agency work needs to be done when there may not be an authorized manager available to authorize overtime. Since lack of advance authorization means lack of payment, AUO is a necessary tool to allow “AUO certified” federal employees to continue to work outside their scheduled duty hours without the need for explicit managerial approval[3] under the “Title 5 Overtime” scheme. Since advanced authorization is as irrelevant to “FLSA Overtime'” as it is vital to “Title 5 Overtime” AUO is an “odd man out” in an FLSA environment. Both the statutes and OPM regulations recognize that AUO is a creature of “Title 5 Overtime” that has no effect in an FLSA environment.

AUO is authorized by statute in 5 U.S.C. §5545(c)(2). 5 U.S.C. §5545(c)(2) reads in relevant part as follows:

(c)(2) an employee in a position in which the hours of duty cannot be controlled administratively, and which requires substantial amounts of irregular, unscheduled overtime duty with the employee generally being responsible for recognizing, without supervision, circumstances which require the employee to remain on duty, shall receive premium pay for this duty on an annual basis instead of premium pay provided by other provisions of this subchapter, except for regularly scheduled overtime, night, and Sunday duty, and for holiday duty. Premium pay under this paragraph is an appropriate percentage, not less than 10 percent nor more than 25 percent, of the rate of basic pay for the position, as determined by taking into consideration the frequency and duration of irregular, unscheduled overtime duty required in the position. (emphasis added)

FLSA Overtime, however, is not “premium pay” as provided under Subchapter V-Premium Pay of 5 United States Code, 5 U.S.C. §§5541-5500a.

“FLSA Overtime” for federal employees is not a creature of Title 5 (5 United States Code), but, rather, is independently statutorily mandated by the FLSA itself. P.L. 93-259, 88 Stat. 55, codified at, 29 U.S.C. §203(e)(2)(A).

As used in this chapter—

(e)(1) Except as provided in paragraphs (2), (3), and (4), the term "employee" means any individual employed by an employer.

(2) In the case of an individual employed by a public agency, such term means--

(A) any individual employed by the Government of the United States--

Thus, the FLSA provides an entirely separate basis for overtime compensation than the FEPA. U.S. Dept. of Air Force v. FLRA, 952 F.2d 446, 448 fn. 1 (D.C. Cir. 1991).

Indeed, OPM explicitly states that FLSA overtime is not part of the “premium pay” scheme of the FEPA. OPM regulation 5 C.F.R. §550.103(ii) reads as follows:

Premium pay means the dollar value of earned hours of compensatory time off and additional pay authorized by subchapter V of chapter 55 of title 5, United States Code, and this subpart for overtime, night, Sunday, or holiday work; or for standby duty, administratively uncontrollable overtime work, or availability duty. This excludes overtime pay paid to employees under the Fair Labor Standards Act and compensatory time off earned in lieu of such overtime pay (emphasis added)

It must be remembered that the Agency’s expert witness, Mr. Coleman, testified that he was aware of no authority, other than FPM Ltr. 551-24[4], that authorized the use of AUO in lieu of FLSA overtime (TR. 96/21; 133/18[5]). The Arbitrator may choose to note that FPM Ltr 551-24[6] (Jt/Ex. A) is dated January 14, 1992, twelve (12) years before the en bloc reversal of FEPA precedent by Doe V. Hence, there is no law or regulation that requires a modification of the statutorily mandated rate of pay (150% of base pay + liquidated damages) for the federal employees involved in this case[7] as imposed by the FLSA in 29 U.S.C. §207(k)[8]:

(k) Employment by public agency engaged in fire protection or law enforcement activities

No public agency shall be deemed to have violated subsection (a) of this section with respect to the employment of any employee in fire protection activities or any employee in law enforcement activities (including security personnel in correctional institutions) if--

(1) in a work period of 28 consecutive days the employee receives for tours of duty which in the aggregate exceed the lesser of (A) 216 hours, or (B) the average number of hours (as determined by the Secretary pursuant to section 6(c)(3) of the Fair Labor Standards Amendments of 1974) in tours of duty of employees engaged in such activities in work periods of 28 consecutive days in calendar year 1975; or

(2) in the case of such an employee to whom a work period of at least 7 but less than 28 days applies, in his work period the employee receives for tours of duty which in the aggregate exceed a number of hours which bears the same ratio to the number of consecutive days in his work period as 216 hours (or if lower, the number of hours referred to in clause (B) of paragraph (1)) bears to 28 days, compensation at a rate not less than one and one-half times the regular rate at which he is employed. (emphasis added)

The Agency’s argument that the AUO payment rate of 25% of the regular rate of pay for the employees at issue is simply not addressed in OPM regulations. Specifically, 5 U.S.C. §5545(c)(2), as previously mentioned, overtly states that it applies to premium pay not the FLSA “suffer or permit” pay as ordered by the Arbitrator in his January 3, 2006, Award.

While OPM does not specify the rate of pay for FLSA overtime in §5545(c)(2) the Department of Labor (hereinafter “DoL”) clearly requires that the rate of pay for overtime must be at least 150% of the regular pay rate.

§778.308 The overtime rate is an hourly rate.

(a) Section 7(a) of the Act requires the payment of overtime compensation for hours worked in excess of the applicable maximum hours standard at a rate not less than one and one-half times the regular rate. The overtime rate, like the regular rate, is a rate per hour. Where employees are paid on some basis other than an hourly rate, the regular hourly rate is derived, as previously explained, by dividing the total compensation (except statutory exclusions) by the total hours of work for which the payment is made. To qualify as an overtime premium under section 7(e)(5), (6), or (7), the extra compensation for overtime hours must be paid pursuant to a premium rate which is likewise a rate per hour (subject to certain statutory exceptions discussed in §§ 778.400 through 778.421).

(b) To qualify under section 7(e)(5), the overtime rate must be greater than the regular rate, either a fixed amount per hour or a multiple of the nonovertime rate, such as one and one-third, one and one-half or two times that rate. To qualify under section 7(e)(6) or (7), the overtime rate may not be less than one and one-half times the bonafide rate established in good faith for like work performed during nonovertime hours. Thus, it may not be less than time and one-half but it may be more. It may be a standard multiple greater than one and one-half (for example, double time); or it may be a fixed sum of money per hour which is, as an arithmetical fact, at least one and one-half times the nonovertime rate for example, if the nonovertime rate is $5 per hour, the overtime rate may not be less than $7.50 but may be set at a higher arbitrary figure such as $8 per hour. (emphasis added)

[33 FR 986, Jan. 26, 1968, as amended at 46 FR 7314, Jan. 23, 1981]

29 C.F.R. §778.308[9]

While Mr. Coleman testified that he is prohibited from using DoL regulations in his testimony or calculations (due to the fact, assumable, that he is an Executive Department employee of the federal government), there is no such prohibition on the part of a third-party from using DoL FLSA regulations in assisting in the computation of FLSA overtime for federal employees. Indeed DoL regulations are routinely used in interpreting overtime situations of federal employees. See AFGE v. OPM, 821 F.2d 761, 769 (D.C. Cir. 1987); Slugocki v. United States, 816 F.2d 1572, 1578 (Fed. Cir. 1987); Zumerling v. Devine, 769 F.2d 745, 750-53 (Fed. Cir. 1985); Alexander v. United States, 1 Cl.Ct. 653, 657-9 (1983).

For the reasons cited above, the Union respectively urges that both law and regulation require reimbursement for “suffer or permit” overtime, as awarded by the Arbitrator in his January 3, 2006 decision, must be calculated at an hourly rate not less than 150% of the basic hourly rate as calculated by pay-period for each employee. Further, liquidated damages must then be awarded pursuant to 5 U.S.C. §216(b) based upon the amount of backpay as correctly calculated.

B. Whether the FLSA Overtime Awarded in this Case was “Regular” or “Irregular”.

During the September 28, 2006 hearing in this matter, the Arbitrator made the following statement:

ARBITRATOR VITARO: Okay. I have to take that, and I'm not going to go

underneath the bona fides of that. Now I can ?? and as you can tell from my questions and my allowance of your questions, I am interested in the issue of whether or not this half?hour paid lunch fits within administratively uncontrollable overtime, and that seems to me to be the guts of this case. (emphasis added)

TR: 131/13.

The Union agrees. The “regularity” of the “duty free lunches,” which currently is the principle issue in this case, is the “guts of this case.” Again, 5 U.S.C. §5545(c)(2) reads in relevant part as follows:

(c)(2) an employee in a position in which the hours of duty cannot be controlled administratively, and which requires substantial amounts of irregular, unscheduled overtime duty with the employee generally being responsible for recognizing, without supervision, circumstances which require the employee to remain on duty, shall receive premium pay for this duty on an annual basis… (emphasis added)

Mr. Coleman, the Agency’s expert witness, testified that AUO required “irregularity.”

Q. And does AUO require irregularity?

A. Yes, it does.

TR. 126/16.

A review of the January 3, 2006 Award in this case shows, incontestably, that the overwhelming majority of “duty free lunch” claims are for consecutive periods stretching from months to years. Every day of every week of every month of every year, for years on end the exact same thing occurs; the employee must work through his/her scheduled lunch (unpaid) period. Is this predictable daily occurrence therefore irregular? Not if words have meaning.

[f]requency need not be the only consideration when analyzing the meaning of “routinely” and “in the regular course of business.” Webster's defines “routine” as “a regular course of procedure.” WEBSTER'S NEW COLLEGIATE DICTIONARY 1000 (1979). Although “regular” can mean “recurring ··· at fixed or uniform intervals,” it can also mean “usual” or “ordinary.” Id. at 966.

Sana v. Hawaiian Cruises, Ltd., 181 F.3d 1041, 1047 (9th Cir. 1999).

The sun may rise at different times. Indeed, the sun may break the horizon at varying degrees from east. The sun, however, will rise and will rise in the east. When something happens daily for weeks, months, and indeed (as in this case) years, it is routine or regular; not irregular. As clearly stated by Mr. Coleman, as an expert witness, AUO overtime requires “irregularity”. The overtime awarded in this case (duty free lunch), not being irregular, is not AUO overtime. The overtime awarded is for unscheduled work hours that the Agency “suffer or permitted” to work pursuant to the FLSA. The uncompensated “duty free lunch” hours awarded in the January 3, 2006, Award therefore requires compensation as FLSA overtime hours not subsumed into already compensated AUO hours.

IV. Conclusion.

As argued above, FLSA overtime hours must be compensated, via law and regulation, at regular hourly rate of the employee plus an additional 50% of that hourly rate (per hour). Further, the FLSA mandates that liquidated damages be paid on the 150% regular rate. The Union’s relief does not request or require that the Arbitrator invalidate FPM Ltr. 551-14. Rather, the Union’s position is that FPM Ltr. 551-14 does not apply in the current situation vis a vis “suffer or permit” overtime and/or overtime “regularly” worked. That is the law and that (respectfully) is what the Arbitrator should order in this case.

Respectfully Submitted,

Joe Goldberg, Esq.

For the Union (AFGE)

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