Note: This article provides good information on a variety of issues involving the application of the Fair Labor Standards Act; however, as it was prepared in 1996, it does not reflect the 2004 legislative changes applicable to "white collar" exemptions.  Thus, this article should be read along with the more recent statutory changes, set out elsewhere on this website.

FLSA Nuts and Bolts: Overtime Overview for Washington Municipal Employers

Charles N. Eberhardt
Perkins Coie
One Bellevue Center, Suite 1800
411 - 108th Avenue N.E.
Bellevue, Washington 98004
(425) 453-6980

Reprinted with permission of the author.

Prepared for the Washington State Association of Municipal Attorneys 1996 Annual Spring Conference

Contents

• I. INTRODUCTION

• II. THE TIME AND ONE-HALF RULE

• III THE "WHITE-COLLAR" EXEMPTIONS
  • The "Duties" Test for Executive, Professional, and Administrative Employees
  • The "Salary Basis" Test

• IV. Calculating "Hours Worked" for Nonexempt Employees
  • A. "Suffering or Permitting" Employees to Work: "Off-the-Clock" Time
  • B. Waiting Time and Time On-Call
  • C. Rest and Meal Periods
  • D. Training Programs
  • E. Travel Time

• V. Calculating Overtime Pay: The "Regular Rate"

• VI. Special Public Employer Rules
  • A. Police and Fire: The "7(k)" Exemption
  • Compensatory Time

I. Introduction

The Fair Labor Standards Act ("FLSA"), passed by Congress in 1938, establishes minimum wage, overtime, equal pay, record-keeping, and child labor standards for employers engaged in interstate commerce. 29 U.S.C. õõ 201 et seq. Congress extended FLSA coverage to public employers in 1966 and 1974, triggering a flood of litigation culminating in Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528 (1985). Under Garcia, state and local governments must fully comply with the FLSA's minimum wage and overtime rules.

The FLSA sets minimum standards only, and it expressly authorizes independent state and local regulation of minimum wages and overtime. 29 U.S.C. õ 218. Washington's Minimum Wage Act ("MWA"), the state law counterpart to the FLSA, imposes parallel, and in some instances more stringent, standards in many of the areas covered by the federal law. See Chapter 49.46 RCW. Washington public employers must comply with both laws.

This outline presents an overview of overtime pay requirements under the FLSA and, to a lesser extent, the MWA, as they apply to municipal employers. The so-called "white-collar" exemptions have generated a storm of litigation in recent years, so they are treated at length. Also treated are the concepts of "hours worked" and several rules of unique significance to public employers. This outline is, of course, only a summary of the law, and it is selective, rather than comprehensive in its coverage. The governing statutes, regulations, and case law should be consulted to answer specific questions.

The United States Department of Labor has issued comprehensive regulations and interpretative bulletins under the FLSA, codified at Title 29 C.F.R. Of particular interest are Part 541 (the white-collar exemption regulations), Part 553 ("Application of the [FLSA] to Employees of State and Local Governments"), Part 778 ("Overtime Compensation"), and Part 785 ("Hours Worked"). The Washington Department of Labor and Industries has issued relatively skeletal regulations under the MWA, codified at Chapter 296-128 WAC. Department of Labor letter opinions on wage and hour issues are readily available, and both federal and state agencies maintain interpretative and enforcement guides for their own internal use.

II. The Time and One-Half Rule

Neither the FLSA nor the MWA requires a 40-hour workweek or otherwise regulates hours of work. Rather, both statutes regulate overtime pay. The basic requirement is the same under federal and state law: nonexempt employees must be paid at least one and one-half times their regular rate of pay for all overtime hours. 29 U.S.C. õ 207(a)(1); RCW 49.46.130. "Overtime" is defined as any employment in excess of 40 hours in a single workweek.

III. The "White-Collar" Exemptions

Congress has enacted a number of overtime exemptions, but by far the most significant are the so-called "white collar" exemptions. The overtime pay provisions do not apply to "any employee employed in a bona fide executive, administrative, or professional capacity." 29 U.S.C. õ 213(a)(1); see also RCW 49.46.010(5)(c). The FLSA does not define these terms; rather, interpretive regulations have been issued by the Department of Labor.

The exemptions are self-executing, so no specific application for exemption is required. To qualify, employees must meet a "duties" test and a "salary basis" test.

A. The "Duties" Test for Executive, Professional, and Administrative Employees ¹ [The regulations provide a " long " and " short " test for each of the executive, professional, and administrative exemptions. There are important differences between the two tests. The long test applies to individuals paid less than $250 a week but at least $155 a week (and at least $170 a week for professionals). $250 a week translates to $13,000 annually. Because it is assumed that the vast majority of employees under these exemptions earn at least $13,000 annually, only the short tests are summarized in the text.] The "duties" determination is an individual one and depends on the nature of the duties performed by the particular employee. The employee's actual duties and qualifications determine the employee's status, rather than the title assigned to the employee's position. 29 C.F.R. õ 541.308(a).

1. The Executive Exemption

   Executive employees include individuals paid $250 or more per week whose primary duty consists of the management of the business enterprise or one of its components or departments and includes "the customary and regular direction of the work of two or more other employees." 29 C.F.R. õ 541.1(f).

2. The Professional Exemption

   Professional employees include individuals paid $250 or more per week whose primary duties fall within one of four categories of recognized professions: the "learned" professions (e.g., medicine, law, and engineering), "artistic" professions, teaching, and computer systems. 29 C.F.R. õ 541.3.

   • Learned Professionals. Learned professionals are individuals whose primary duty consists of work requiring knowledge of an advanced type in a field of science or learning traditionally acquired through a prolonged course of specialized instruction and study and which requires the consistent exercise of discretion and judgment. 29 C.F.R.õ 541.3(a)(1), (e).

   • "Artistic" Professionals. Professional employees also include individuals who primarily perform work that is original and creative in a recognized field of artistic endeavor. 29 C.F.R. õ 541.3(a)(2). Not all "creative" professions qualify under this exemption.

   • Teachers. The professional exemption for teachers is relatively self-explanatory, but is subject to a number of detailed requirements. See 29 C.F.R. õ 301(g).

   • Computer Professionals. In response to a 1990 amendment of the FLSA, the Department of Labor issued regulations in 1992 acknowledging three categories of computer-related occupations that may qualify for the professional exemption. 29 C.F.R. õ 303. These regulations represent a reversal of the Department's long-standing refusal to recognized computer programmers and other computer-related professionals as exempt.

3. The Administrative Exemption

   The administrative exemption is broad, vaguely worded, and notoriously difficult to apply in practice. Many employers use the administrative exemption as a "catch-all" exemption for relatively highly paid employees whose jobs are not readily categorized as executive or professional. Some recent decisions suggest that closer scrutiny is required, particularly in organizations whose primary purpose is to provide services.

   (a) The Regulatory Definition. Administrative employees include individuals paid $250 or more per week whose primary duty consists of "office or nonmanual work" that

   • is "directly related to management policies or general business operations" of the employer and

   • includes work requiring the "exercise of discretion and independent judgment."

   29 C.F.R. õ 541.2(a)(1), (e)(2).

   (b) Administrative Activities vs. Production Activities. Whether the employee performs work "directly related to management policies" or "general business operations" turns on whether the employee performs the "administrative" activities of the employer, as distinguished from "production" activities. 29 C.F.R. õ 541.205.

   · A recent Second Circuit decision illustrates the difficulty in accurately applying the administrative exemption. The court concluded that the New York State Police Bureau of Criminal Investigations ("BCI") investigators were not exempt under the administrative exemption. The inspectors' primary duties were the investigation and prevention of serious crimes, and there was no dispute that the investigators exercised broad discretion in the conduct of their investigations. The court concluded, however, that the investigators were engaged in "production" activities rather than "administrative" activities. The BCI is in the "business" of investigating and preventing crime, and, in effect, the investigators produce units of investigation. Reich v. New York, 3 F.3d 581 (2d Cir. 1993), cert. denied, 510 U.S. 1163 (1994).

   · Likewise, a federal district court in the Southern District of New York concluded that a newsletter producer, domestic story producer, and field producer did not meet the administrative exemption because the employees' work essentially related to producing the primary product of the broadcast news organization. Because they were "production workers," they could not be exempt administrative employees. Freeman v. NBC, 1993 U.S. Dist. LEXIS 17624 (S.D.N.Y. Dec. 15, 1993).

4. Analyzing "Primary Duty"

   The analysis of an employee's "primary duty" is necessarily fact-intensive. The Department of Labor, nevertheless, provides:

   In the ordinary case it may be taken as a good rule of thumb that primary duty means the major part, or over 50 percent, of the employee's time.

   29 C.F.R. õõ 541.103, .206(b), .304(b).

   • Other Factors Affecting "Primary Duty." Time, however, is not the sole consideration. An employer may also consider the relative importance of the employee's exempt duties with respect to nonexempt duties, the frequency with which the employee exercises discretion, and the relationship between the employee's salary and the wages paid to that employee's subordinates. Id. õ 541.103.

   • Assessment of All Duties, Exempt and Nonexempt. Importantly, in making this assessment, the employer should take into account all duties, exempt and nonexempt, of the particular employee.

   • Combined Exemptions Permissible. It is possible for an employee to "combine" exemptions, e.g., by performing exempt work as both a professional and an executive. Id. õ 541.600.

B. The "Salary Basis" Test

The executive, administrative, and professional exemptions share one common requirement: the employer must pay the exempt employee on a "salary basis." [ Certain professionals, namely doctors, lawyers, teachers, and some computer professionals, are not subject to the salary basis test.] The bulk of recent litigation regarding exempt employees has focused on the "salary basis" test, with plaintiffs attempting to show that (1) deductions from pay or accrued leave or (2) additional compensation destroys employees' exempt status. If an employee's pay is subject to deduction for absences of less than one day, for instance, the overtime exemption may be lost, even if the employee meets all of the other requirements for an executive, administrative, or professional exemption. A 1992 amendment has substantially reduced this risk for public employers, but strict compliance with the amendment is necessary to preserve the exemption.

1. The Regulatory Definition

   To meet the "salary basis" requirement, the federal regulation requires that the employee be paid:

   • a predetermined amount, which may be either the employee's entire compensation or only part of it (as discussed below, certain forms of additional compensation are permissible), and which is paid weekly or less frequently; and

   • an amount that is "not subject to reduction because of variations in the quality or quantity of the work performed."

   See generally 29 C.F.R. õ 541.118 (the "salary basis" regulation). Section 541.118 also establishes these two important rules:

   • The employee must receive his or her full salary for any week in which he or she performs any work, "without regard to the number of days or hours worked," but

   • The employee "need not be paid" for any workweek in which he or she performs no work.

2. The Public Agency Proviso

   Since 1992, a public agency may treat an employee's partial-day absences for personal reasons and/or illness or injury as unpaid leave without threatening the employee's exempt status if:

   • The employee accrues personal and sick leave; and

   • The employer has a pay system established (a) by statute, ordinance, or regulation or (b) "by a policy or practice established pursuant to principles of public accountability," which requires the employer to dock employee's pay for such absences when accrued leave is not available or used.

   29 C.F.R. õ 541.5d. Public employers must still comply with all other requirements of the salary basis test, as set forth in 29 C.F.R. õ 541.118. Thus, docking an employee's pay for partial-day absences (or, in some cases, absences of a full day or longer but less than a week) for reasons other than "personal reasons" or "illness or injury" may still jeopardize the employee's exempt status.

   The Ninth Circuit has also ruled that, prior to the adoption of the interim version of Section 541.5d in 1991, the "salary basis" test under the FLSA was invalid as applied to the public sector. Service Employees Int'l Union, Local 102 v. County of San Diego, 35 F.3d 483 (9th Cir. 1994). The court concluded that the "salary basis" test was "contrary to the FLSA and congressional intent." The court explained that, because virtually all state and local government pay systems are based on principles of public accountability, most public employers could not meet the "salary basis" test for classifying their employees: "[t]he significance of this is that the test deprived public entities of the white collar exemption created by Congress." Id. at 488.

3. Permitted Deductions

   The "salary basis" regulation permits an employer to make the following pay deductions without negating the employee's salaried status:

   • Deductions for personal absences from work of one day or longer. 29 C.F.R. õ 541.118(a)(2). Personal absences do not include those caused by the employer or the operating requirements of its business. Id. õ 541.118(a)(1).

   • Deductions because of absences due to sickness or disability lasting one or more days, "if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by both sickness and disability." Id. õ 541.118(a)(3). This provision covers employees who originally qualified for some form of lost-time benefit through an employer- or state-sponsored plan, but who later exhausted these benefits.

   • Deductions that serve as good-faith penalties "for infractions of safety rules of major significance." Id. õ 541.118(a)(5). Only safety rules for the prevention of serious danger to the plant or other employees are considered rules of "major significance." (See discussion within regarding disciplinary suspensions.)

4. Prohibited Deductions: Overview

   Under the "salary basis" regulation, the overtime exemption may be lost if the employer makes any of these deductions from the employee's predetermined pay:

   • Deductions for absences caused by the employer or its business operating requirements. Id. õ 541.118(a)(1).

   • Deductions for absences to perform civic responsibilities: jury duty, attendance as a witness or temporary military leave. Id. õ 541.118(a)(4). The employer, however, may offset any compensation the employee receives for these activities (e.g., jury duty pay) against the salary the employer would otherwise pay. Cf. Shockley v. City of Newport News, 997 F.2d 18, 24 (4th Cir. 1993) (exempt status not affected by policy of deducting pay for attendance as a party at trial because such activity does not "involve performance of civic duty").

5. The No-Docking Rule: Deductions for Partial Day Absences

   The "salary basis" regulation does not explicitly address whether making a deduction for a partial day's absence will cause the employee to lose his or her salaried status, but the Department of Labor and the courts agree that when an employer actually reduces an exempt employee's salary for an absence shorter than one day, the overtime exemption is defeated. This is known as the no-docking rule. The rule was responsible for large backpay awards against public employers in the early 1990s, but it has little prospective significance in light of the 1992 public employer proviso. 29 C.F.R. õ 541.5d.

6. Disciplining Exempt Employees: Pay Deductions for Short-Term Suspensions May Destroy Exempt Status

   (a) The Regulatory Definition. Pay deductions may be made only for major safety infractions. Any pay deductions for less than a week for any other disciplinary reason can destroy an employee's exempt status. The applicable regulation provides:

   Penalties imposed in good faith for infractions of safety rules of major significance will not affect the employee's salaried status. Safety rules of major significance include only those relating to the prevention of serious danger to the plant, or other employees, such as rules prohibiting smoking in explosive plants, oil refineries, and coal mines.

   29 C.F.R. õ 541.118(a)(5) (emphasis added).

   (b) What Is a "Safety Rule of Major Significance"? Suspensions without pay for less than a full week or monetary fines for infractions other than a "safety rule of major significance" may also result in loss of exempt status. The issue then becomes whether a particular action violates a "safety rule of major significance."

   • A policy providing for "economic sanctions" for virtually any violation of police department rules, including failure to be truthful, polite, or neat, or failure to file accurate and complete reports, defeated exempt status. Hurley v. Oregon, 27 F.3d 392, 394-95 (9th Cir. 1994).

   • A policy allowing for unpaid suspensions for tardiness as well as for rude, abrupt, and irritable behavior to fellow staff members is not a suspension for a "safety rule of major significance" and destroys exempt status. Klein v. Rush-Presbyterian-St. Luke's Medical Ctr., 990 F.2d 279, 287 (7th Cir. 1993).

   • A police lieutenant's suspension without pay for leaving the scene of a suicide was not for "safety rules of major significance" and destroyed exempt status. Avery v. City of Talladega, 24 F.3d 1337 (11th Cir. 1994).

   • A rule docking the pay of police officers who fail to report absences from work is not a safety rule of major significance. Shockley v. City of Newport News, 997 F.2d 18, 25 (4th Cir. 1993).

   • A rule docking pay when employees leave work for a few hours without obtaining permission will defeat salary basis status. Service Employees Int'l Union, Local 102 v. County of San Diego, 784 F. Supp. 1503, 1508 (S.D. Cal. 1992), rev'd on other grounds, 35 F.3d 483 (9th Cir. 1994).

   (c) No Actual Deduction or Unpaid Suspension Is Necessary to Destroy Exempt Status. The Ninth Circuit has indicated that the mere possibility of a pay deduction or fine for improper disciplinary reasons will destroy an employee's exempt status, regardless of whether an actual deduction has been made. See Hurley, 27 F.3d at 395 n.7 ("All that is required to render a classification ineligible for salary basis status is that the compensation be subject to reduction for rules violations.") (citing Abshire v. County of Kern, 908 F.2d 483, 487 (9th Cir. 1990), cert. denied, 498 U.S. 1068 (1991)); see also Avery, 24 F.3d at 1342 (in rejecting the city's argument that only the suspended lieutenant was entitled to overtime, the court noted that "[s]uch an interpretation of the regulations would lead to an irrational result, because it would favor employees who are disciplined for breaking the rules--and thus become eligible for overtime--over employees who respect those same rules."). Some courts in other jurisdictions have ruled that an actual suspension or deduction is necessary to destroy exempt status.

7. The Impact of Paying Additional Compensation to Exempt Employees

   As discussed above, an employee is "exempt" from the FLSA and not entitled to overtime pay if the employee's duties are of a certain type and if the employee is paid on a "salary basis." What if an employer wants to pay an exempt employee additional compensation? Will this action defeat an employee's exempt status? Does it matter what form the extra compensation takes? Whether it is a bonus or a commission or based on extra hours put in by the employee? The Washington Legislature recently overturned an appellate decision holding that paying additional compensation on an hourly basis will defeat an employee's exempt status under Washington law. Federal courts are divided on this issue under the FLSA.

   (a) FLSA Regulations. Regulations issued under the FLSA state that the payment of additional compensation besides salary is not inconsistent with the "salary basis" requirement. 29 C.F.R. õ 541.118(b). The regulations provide three examples to illustrate what is proper "additional compensation." The first two examples are receiving a sales commission and receiving a percentage of the sales or profits of a company. The third example describes a situation involving "an employee paid on a daily or shift basis" who is guaranteed a specific salary for any week in which he or she performs any work.

   (b) Federal Decisions. Although the regulation does not clearly address paying overtime on an hourly basis, the weight of federal authority supports the view that paying overtime on an hourly basis does not jeopardize an employee's exempt status. E.g, Hilbert v. District of Columbia, 23 F.3d 429, 432 (D.C. Cir. 1994); Michigan Ass'n of Gov't Employees v. Michigan Dep't of Corrections, 992 F.2d 82, 84 n.3 (6th Cir. 1993). The Department of Labor has also taken this position in a consistent line of authority spanning more than 20 years.

   Other courts, however, have suggested that payment of a fixed amount plus additional hourly wages for extra hours worked is not consistent with exempt, salaried status. See Abshire v. County of Kern, 908 F.2d 483, 486-87 n.2 (9th Cir. 1990) (in dicta, concluding that battalion fire chiefs were not salaried, the court considered the fact that they received overtime pay that was not "measured loosely" but rather was "provided on an hour-by-hour basis"), cert. denied, 498 U.S. 1068 (1991); Brock v. Claridge Hotel & Casino, 846 F.2d 180, 184-85 (3d Cir.) ("a basic tension exists between the purpose behind a salary requirement and any form of hourly compensation"), cert denied, 488 U.S. 925 (1988).

   (c) Tift v. Professional Nursing Services, Inc. and RCW 49.46.130(2)(a)

   A recent Washington appellate decision held that payment of an hourly wage for hours worked in excess of 40 hours per week to an otherwise "salaried" employee destroyed the white collar exemption under the MWA because it rendered the employee an hourly employee. Tift v. Professional Nursing Services, Inc., 76 Wn. App. 577 (1995). The Washington Legislature swiftly--and decisively--repudiated Tift, amending the MWA to provide as follows:

   The payment of compensation or provision of compensatory time off in addition to a salary shall not be a factor in determining whether a person is exempted under RCW 49.46.010(5) [the white-collar exemption].

   RCW 49.46.130(2)(a). This amendment applies retroactively.

   (d) Boykin v. The Boeing Company

   Last month, the federal court for the Western District of Washington rejected a challenge to retroactive application of RCW 49.46.130(2)(a) and adopted the majority rule on the effect of extra compensation under the FLSA's salary basis test. Boykin v. The Boeing Company, No. C95-1253C (W.D. Wash, April 11, 1996) (Coughenour, J.). The Boykin plaintiffs claimed that Boeing's practice of paying overtime to exempt employees in some circumstances violated the salary basis test and rendered the company liable for overtime under the FLSA and MWA to a class consisting of virtually all of its exempt employees. The court rejected the claim under both federal and state law, expressly adopting the majority rule under the FLSA and distinguishing the Abshire dicta. The court also rejected the plaintiffs' challenge to the retroactive application of the post-Tift amendment to the MWA, holding that the Legislature clearly intended the amendment to have retroactive effect, that the Legislature did not exceed its constitutional authority, and that plaintiffs did not have a vested right in the claimed overtime pay.

IV. Calculating "Hours Worked" For Nonexempt Employees

Overtime compensation for nonexempt employees is required only for hours of work in excess of the applicable maximum. The question here is what must be treated as "hours worked." Misconceptions abound in this area, despite relatively specific regulations. This section analyzes common problem areas.

A. "Suffering or Permitting" Employees to Work: "Off-the-Clock" Time

1. Regulatory Requirements
   • "Working time" includes not only time worked at the employer's request, but also time that the employer "suffers or permits" the employee to work.

   • An employer "suffers or permits" an employee to work when the employer knows or has reason to know that the employee is working. If this occurs, the employer has accepted the benefits of the employee's work and must pay for that work.

   • The location of the work (i.e., at the job site or away from it) is immaterial if the employer knows or has reason to know of the employee's work.

   See 29 C.F.R. õõ 785.11-.13.

2. Benefit of the Employer

   Where an employee claims overtime pay for "off-the-clock" time, a critical issue is whether the tasks were performed necessarily and primarily for the benefit of the employer and the business.

   • The Eighth Circuit has held that employees who made garments and crafts at home for display in their employer's fabric and crafts store were not acting for the employer's benefit. On a voluntary basis, employees made garments or other items for display to show the end uses of the store's products. The items were not for sale. The store provided the materials free of charge. The employees kept the items for personal use after the end of the display period. The court concluded that the Secretary of Labor failed to establish that the employer was the primary beneficiary of the time spent. Reich v. ConAgra, Inc., 987 F.2d 1357 (8th Cir. 1993).

3. The Volunteer Dilemma

   Employees frequently volunteer to perform work that is primarily for the benefit of the employer. Employees choose to work through their lunch hours, come to work early and stay late, and take work home. Employees often fail to record the time and even resist employer requests that they do so. Even if it has rules against unauthorized overtime, any employer that is actually or constructively aware that employees are working may be liable for overtime pay.

   Note that some volunteer activities by employees of public agencies are excluded from the overtime calculus, but only if the volunteer services are not "the same type of services which the individual is employed to perform for the public agency." 209 U.S.C. õ 203(e)(4); 29 C.F.R. õõ 553.100 et seq.; see also RCW 49.46.010(5)(e); RCW 49.46.065.

1. Waiting Time

   Determining when waiting time constitutes "hours worked" requires case-by-case analysis. Relevant factors include:

   • the employment agreement and the parties' conduct under it;

   • the relationship between the waiting time and the job in question;

   • whether the employee is completely relieved of all duties until a specified time in the future;

   • whether the employee may leave the work site during the waiting time;

   • the duration of the waiting time; and

   • the degree of predictability associated with the waiting time.

   The key question is whether the employee is able to effectively use the time for his or her own purposes. If the employee cannot do so, the employee has been "engaged to wait," and the waiting time is compensable under the FLSA. On the other hand, if the employee is relieved of duty and may use the waiting time for personal purposes, the employee is simply "waiting to be engaged," and the FLSA does not require payment.

   See 29 C.F.R. õõ 785.14-.16.

2. Time On Call

   (a) Regulatory Definition of On-Call Time. On-call time is a special type of waiting time. As with waiting time, the key question is whether the employee is able to effectively use the time for personal purposes. Merely requiring an employee to leave word, while off-duty, about where he or she may be contacted does not transform the off-duty time into time on call.

   See 29 C.F.R. õ 785.17.

   (b) Deciding Whether an Employee Is On Call. Factors that courts use in determining whether an employee has spent "hours worked" on call include the following:

   • the degree to which the employee's movements are geographically restricted;

   • the frequency of call-ins;

   • how quickly employees are expected to respond to call-ins;

   • the employee's ability to trade on-call responsibilities with others;

   • whether a pager eases restrictions on the employee's use of the time; and

   • the employee's actual activities during the time on call.

   C. Rest and Meal Periods

   The Federal regulations require that brief rest periods be counted as hours worked. 29 C.F.R. õ 785.18. Employers are not required to pay employees for bona fide meal periods of 30 minutes or more, even if employees are not permitted to leave the premises, so long they are completely relieved of any duties during the meal period. 29 C.F.R. õõ 785.18, .19; WAC 296-126-092(1).

   D. Training Programs

   The FLSA requires employers to count as "hours worked" time spent attending lectures, meetings, training programs, and similar functions unless all of the following conditions are met:

   • Attendance is outside of the employee's regular working hours;

   • Attendance is in fact voluntary;

   • The course, lecture, or meeting is not directly related to the employee's job; and

   • The employee does not perform any productive work during attendance.

   29 C.F.R. õ 785.27. Time spent in certain apprenticeship programs that meet government standards need not be compensated if the apprentice does not perform his or her regular duties. See 29 C.F.R. õõ 785.27-.32.

   E. Travel Time

   Federal regulations address various situations in which time spent traveling is or is not considered "hours worked" for purposes of the FLSA. The overarching principle is that travel time must be treated as work time if it is integral to performing the employee's job. When travel time is merely a normal incident of employment, it need not be so treated.

   1. Travel Between Employee's Home and Workplace

      (a) Normal Workdays

      • Employers are not required to count as "hours worked" the time employees spend traveling to and from their work sites before and after work on normal workdays.

      • The employee must travel to and from work on his or her own time even if the employee normally reports to different job sites on different workdays.

      • Even an agreement that the employer will pay the employee for time spent commuting between home and work does not make this time "hours worked" for FLSA purposes.

      (b) Emergency Call-Outs

      • The federal travel time regulations take no position on the character of time spent traveling between home and the employee's regular workplace when the employee receives an emergency call outside normal working hours.

      • When an emergency call makes it necessary for the employee to travel a substantial distance from home to a place other than the employee's normal work site, the travel time is time worked.

   2. Travel Between Job Sites During the Workday

      Traveling between job sites during the workday is considered part of the employee's principal activity and must be counted as hours worked.

   3. Business Trips

      (a) One-Day Business Trips

      • The employer need not count as work time those components of travel time that could be regarded as ordinary travel between home and work (e.g., traveling from home to the airport).

      • The employee is considered to be working while engaged in travel for the employer's benefit to meet the needs of the assignment (e.g., driving to another city for a special one-day assignment).

      (b) Overnight Business Trips

      • The employer must count as "hours worked" the time the employee spends traveling during his or her regular hours of work (e.g., between 9:00 a.m. and 5:00 p.m.), regardless of whether the travel occurs on a normal workday or on a day off.

      • The federal enforcement policy is to ignore time the employee spends as a passenger outside his or her regular working hours.

      See 29 C.F.R. õõ 785.33-.39.

V. Calculating Overtime Pay: The "Regular Rate"

An employee's overtime rate of pay is a function of his or her "regular rate." The regular rate is defined as "the hourly rate actually paid the employee for the normal, nonovertime workweek for which he is employed." 29 C.F.R. õ 778.108. It is an hourly rate, regardless of the manner in which the employee is compensated (e.g., on a salary or piecework basis). An employee may have different regular rates for different types of work (e.g., regular duty vs. training). Special rules apply for calculating the statutory overtime rate for a workweek including multiple regular rates of pay. 29 C.F.R. õ 778.115.

The Department of Labor has issued extensive guidance on what compensation must be included in (or may be excluded from) the regular rate for overtime calculation purposes. For example, weekend or holiday premium pay, contractual overtime, and "call-back" pay typically may be excluded, but shift differentials, hazardous duty pay, and nondiscretionary bonuses (such as educational or longevity bonuses) must be included. See generally 29 C.F.R. Part 778. Some excluded payments may also be credited towards statutory overtime pay requirements.

VI. Special Public Employer Rules

A. Police and Fire: The "7(k)" Exemption

Section 7(k) of the FLSA authorizes a partial exemption from the Act's overtime rules for a public agency's fire protection and law enforcement employees. 29 U.S.C. õ 207(k); accord RCW 49.46.130(5). Under the so-called "7(k)" exemption, a public agency may adopt a work period of any duration between 7 and 28 days.

The Department of Labor has determined the maximum hours that may be worked in a given work period before overtime pay is required. Thus, in the case of law enforcement employees, the agency is only liable for overtime pay if an employee works more than 171 hours in a 28-day work period or 43 hours in a seven-day work period. In the case of fire protection employees, the agency is only liable for overtime pay if an employee works more than 212 hours in a 28-day work period or 53 hours in a seven-day work period. 29 C.F.R. õ 553.230.

Application of the 7(k) exemption to paramedic employees associated with public fire departments has been hotly disputed. These cases tend to turn on their facts, but most published court decisions addressing the issue have held that the paramedics were not subject to the exemption.

B. Compensatory Time

1. Introduction

   The use and accrual of compensatory time in lieu of overtime generates significant legal and financial issues for public employers. A common concern is that the employer may be required to pay overtime to cover an employee's job, and some employers have responded by prohibiting employees from using compensatory time when their absence will require payment of overtime to other employees during that absence. Other employers have instituted administrative controls over scheduling and "banking" compensatory time. Neither the Ninth Circuit nor Washington courts have considered whether such restrictions upon the use of compensatory time are legal.

2. The Federal Rule

   This issue is governed by 29 U.S.C. õ 207(o)(5), which reads:

   An employee of a public agency which is a State, political subdivision of a State, or an interstate governmental agency--

   (A) who has accrued compensatory time off authorized to be provided under paragraph (1), and

   (B) who has requested the use of such compensatory time, shall be permitted by the employee's employer to use such time within a reasonable period after making the request if the use of the compensatory time does not unduly disrupt the operations of the public agency.

   The Department of Labor regulations implementing this statute are codified at 29 C.F.R. õõ 553.20 to .28. The corresponding MWA rule, which is significantly less burdensome, is RCW 49.46.130(2)(b); see also WAC 296-128-560.