FLSA: PLACER COUNTY SETTLES FLSA SUIT WITH DEPUTIES

Members of the Placer County Deputy Sheriffs Association have settled a lawsuit against the County of Placer for back pay, liquidated damages, costs and attorney fees in a claim involving underpayment of FLSA overtime. The lawsuit sought recovery of unpaid overtime withheld when the County wrongly calculated the "regular rate of pay."

"Regular rate of pay" is the base rate on which overtime must be calculated for each employee. Federal regulations require the "regular rate of pay" include all incentives, pay premiums and differentials. The rate may be calculated on a salary or an hourly basis.

Deputies Entitled to Overtime on Salary Basis

Overtime for deputy sheriffs in Placer County historically was paid on a salary basis. But on July 1, 2004, the County implemented a new payroll system, "ACORN," which changed the method of calculating the deputies' overtime to an hourly, rather than a salary, basis. The DSA objected to the resulting change in overtime compensation rates and we filed suit after several "meet and confer" sessions failed to persuade the County to restore the original method of calculating overtime and to pay back overtime.

Whether an employee is compensated on a salary or hourly basis dramatically affects the employee's "regular rate" for calculating overtime. Employees paid on a salary basis generally receive the same rate of overtime compensation regardless of the amount of overtime worked. However, an employee who is paid on an hourly basis is typically compensated at a lower overtime rate for each additional overtime hour worked. Under the ACORN system, the deputies’ overtime rate actually decreased as they worked more overtime.

County Agrees to Change Payroll System

Employers are prohibited under the FLSA from choosing a new method by which to calculate overtime when an MOU or local salary ordinance require another method. In Placer County, both the MOU and the County Charter determine salaries for most DSA members by averaging the salaries in comparable jurisdictions. These provisions, together with the county's past practices and provisions of the County Code, established the "regular rate of pay" for the deputies was to be based on salary and a 40 hour work week, not the number of hours worked.

In settlement negotiations with the DSA and Mastagni, Holstedt, Amick, Miller, Johnsen & Uhrhammer, Placer County agreed to return to the method of calculating the regular rate of pay on a salaried basis. The County also agreed to pay the Plaintiffs back wages from the date ACORN was implemented, and to consider leave usage as hours actually worked for purposes of overtime calculation.

The Plaintiffs recovered approximately $150,000.00 in back wages and attorney fees. Since the unilateral change in the method of calculating the regular rate of pay also constituted an unfair labor practice, the firm was able to secure back-payment of overtime even for those DSA members not named in the lawsuit. The County subsequently applied the corrected method of calculating overtime to all County employees.