“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.
