CITY OF SOUTH LAKE TAHOE SETTLES FLSA SUIT WITH POA

By David E. Mastagni and Will M. Yamada

Members of the South Lake Tahoe Police Officers Association have settled a lawsuit against the City of South Lake Tahoe for back pay, liquidated damages, prospective relief, and attorney fees in a claim involving underpayment of overtime. The Fair Labor Standards Act (FLSA) litigation sought recovery of unpaid overtime withheld when the City improperly excluded premium pays from the calculation of the "regular rate of pay."

"Regular rate of pay" is the base rate on which overtime must be calculated for each employee. The FLSA requires public employers to include in the "regular rate of pay" all incentives, pay premiums and differentials, such as FTO pay, night shift differential, K-9 handler pay, and bilingual pay. The rate may be calculated on a salary or an hourly basis.

Whether or not the employer includes the remunerations dramatically affects the employee's "regular rate" for calculating overtime. While it may only be a few dollars per officer per hour, the amount of back pay owed can be quite substantial when taken in the aggregate of months or even years.

City Agrees to Prospective Relief Exceeding FLSA Requirements

The City of South Lake Tahoe had a practice of paying its officers overtime compensation at a rate of one and one-half the "base hourly rate," and excluding or undercounting various categories of premium pay.

After extensive settlement negotiations, the City agreed to calculate the overtime pay based on the "regular rate" plus any additional remunerations such as nondiscretionary bonuses, incentive pays, pay differentials, extra compensations and premium pays. The City also agreed to pay the plaintiffs back pay, liquidated damages and attorney fees in the amount of $50,000.00.

As part of the settlement agreement, the City also agreed to pay the officers prospectively in a manner far exceeding FLSA requirements. The City agreed to pay leave taken as hours worked at the FLSA rate, resulting in officers being paid overtime at the "regular rate" plus all premium pays, or "rollups," even when an officer works less than 80 hours in a two-week period. This settlement has resulted in an enormous benefit to all South Lake Tahoe police officers.