“Regular Rate” Violation Costs Lexington $693,000 In Overtime Pay

FROM THE LEXINGTON HERALD-LEADER, November22

LEXINGTON, KY – The city owes more than 600 Lexington firefighters nearly $700,000 because of a miscalculation in overtime pay, according to the state Department of Labor.

The state discovered the problem when it audited the city's firefighter overtime records after a complaint was filed by the local chapter of the International Association of Fire Fighters in June.

Lexington firefighters have been underpaid because their overtime pay was calculated using their base pay instead of their total salary, which includes pay supplements such as a uniform allowance, special duty pay and a city and state training incentive.

Other cities across the state are grappling with the same issue. Last year, a Jefferson Circuit judge ruled that Louisville was incorrectly calculating overtime pay – a decision that could cost that city millions. The case is on appeal.

Joe LaGrotto, an investigator with the state Labor Department, said the department investigates any time a complaint is filed.

Federal overtime laws say that any regular bonuses or supplements that employees can count on as part of their salary need to be calculated for overtime, said Michael Allen, Lexington's human resources director.

For example, an employee who makes $12 an hour could earn a regular weekly commission that pushes his pay rate up to $13 an hour. If that employee works more than 40 hours, the overtime pay should be calculated at $13 an hour, not $12, said LaGrotto.

Lexington firefighters should receive their back overtime pay in December, Allen said.

But Mark Blankenship, president of the local International Association of Fire Fighters 526, said the $693,192.85 the city intends to pay 602 firefighters is a "very low figure" for what is really owed. "It's based only on partial supplements, not all of the supplements."

Blankenship said the union is contemplating further legal action.

The amount owed by the city includes the city training incentive and special duty pay. The Labor Department hasn't determined how much the city must pay in overtime back pay for uniform allowances or state training incentives.

Although the city has been underpaying firefighters for years, state statute allows for only five years of back pay, Allen said.

The city's overtime miscalculation was a minor one, Allen said. The impact to each firefighter averages $230.30 a year, or $8.86 each pay period.

"It's only a little bit per firefighter, but if you look at all the firefighters over a number of years, it adds up," LaGrotto said.

The firefighters union discovered the overtime discrepancy during its recent collective bargaining sessions with the city, Blankenship said.

"We went through contract negotiations and found out the way they had been paying overtime was improper," he said.

The city and firefighters union signed a three-year collective bargaining contract in June. The overtime calculation problem was corrected with the first paychecks firefighters received after the contract went into effect in July, Allen said.

The city plans to cover the nearly $700,000 in back pay by using money from the general fund, the city's main operating account.