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HomeMy WebLinkAboutIR 7107 •i INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7107 I• L~�PTI NCO To the Mayor and Members of the City Council � o fr N u +_ ;TexP� Subject: UPDATE ON THE FAIR LABOR STANDARDS ACT AMENDMENTS OF 1985 •01J Summary. President Reagan recently signed into law amendments in the Fair Labor Standards Act that will change provisions affecting employees of State and local governments. After the Supreme Court decision in Garcia v. the San Antonio Metropolitan Transit Authority on February 19, 1985, Fort Worth and other municipalities and their employee representatives identified a number of areas which would adversely affect local government operations . Although the City of Fort Worth proceeded to come into compliance with the wage and hour law, the City Council and staff supported efforts of public interest groups for administrative and legislative relief. Pending final action by the Congress, the City withheld paying retroactive payment of overtime premium pay required by the act , but implemented appropriate procedures to comply with the Act assuming enforcement of the Act by the U.S. Department of Labor prospective from April 15, 1985. The legislation signed by the President, responds to some of the concerns of local governments. Generally, the legislation provides for compensatory time in lieu of immediate overtime pay in cash, clarifies the law as it relates to joint employment by police officers and fire fighters, sets the effective date as April 15, 1986, and relieves local governments from having to pay retroactive overtime pay. The amendments also clarified the status of volunteers and prohibited discrimination against employees who asserted overtime coverage under FLSA after February 19, 1985. A summary of the amendments is included with this report as Attachment A. CFW IMPLEMENTATION PROCEDURES City staff has prepared for implementation of the Fair Labor Standards Act for City employees. On July 2, 1985, the Council approved a set of Personnel Rules and Regulations pertaining to the Fair Labor Standards Act. The majority of these regulations will require only a change in effective date since they address definitions and procedures under FLSA. Seven of the regulations required revision to conform to changes in the FLSA act and its new effective date of April 15, 1986. Following is a list of the revised regulations and a summary of the revisions. C.4 OVERTIME PAY/COMPENSATORY TIME FOR MUNICIPAL EMPLOYEES Current overtime and compensatory time policies allow either overtime pay or compensatory time for hours worked in excess of 40 hours by non-exempt employees . Accrual of compensatory time is unlimited. The revised FLSA regulations permit accrual of 240 hours of compensatory time nor regular employe-.s and 480 hours for employees in public safety, emergency response or seasonal activities. City staff proposes that a cap of 120 hours of compensatory time for all employees be approved. Hours worked above that limit would have to be paid at the time-and-one-half rate of pay for non-exempt employees. Exempt employees ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS UPDATE ON THE FAIR LABOR STANDARDS ACT AMENDMENTS OF 1985 PAGE TWO with 120 hours of accrued compensatory time would not have any additional hours added for overtime work. City employees with accrued compensatory time in excess of the 120 hour limit would have those hours transferred to Major Medical/Sick Leave on a one time basis. Employees could not accrue further compensatory time until they had used some of the accrued time. C.23 WAGE-HOUR POLICY: KEY "TIME: DEFINITIONS Minor word change that does not impact the regulation. C.31 WAGE-HOUR POLICY: ADJUSTING WORK SCHEDULE FOR BUDGET REASONS Policy revised to conform to the latest amendments to FLSA which allow use of compensatory time by state and local governments. C.32 WAGE-HOUR: POLICY: DUAL EMPLOYMENT Previous policy defined dual employment under terms of the prior FLSA act. The revised policy changes the definition to conform to the latest amendments to FLSA which specifically addressed the needs of state and local government. C. 34 WAGE-HOUR POLICY: DECLARATION OF POLICE AND FIRE CIVIL SERVICE WORK PERIODS The revised regulation changes the effective date of the workperiods from July 6, 1985 to April 12, 1986. C.35 WAGE-HOUR POLICY: DECLARATION OF CRASH/FIRE RESCUE PERSONNEL WORK PERIODS The revised regulation changes the effective date of the workperiods from July 6, 1985 to April 12, 1986. D. 17 TERMINATION PROCESSING Previous termination processing did not permit payment for compensatory time to non-exempt employees who terminated employment. Amendments to the FLSA act require the non-exempt employees be paid at termination for compensatory time earned after April 15 , 1986. The rate of payment for the accrued compensatory time will be at a regular rate of not less than the higher of the employee 's final regular rate or the average regular rate during the last three years of employment. IMPLEMENTATION DATE The Fair Labor Standards Act become effective for state and local governments on April 15, 1986. It is proposed that the Council approve the revised regulations during the City Council meeting on April 8, 1986, in order to meet the federal enforcement date. Respectfully submitted, i ,"bouglas Harman City Manager -�� Summary of FLSA Amendments Compensatory Time. State and local governments are permitted to give their employees compensatory time off in lieu of immediate overtime pay in cash, at a rate of not less than one and one-half hours for each hour of overtime worked, but only pursuant to a collective bargaining agreement, or an agreement or understanding arrived at between the employee and employee before performance of the work. The regular practice of granting compensatory time off in lieu of overtime compensation in effect on April 15, 1986 , shall be considered an agreement or understanding. The maximum compensatory time which may be accrued by any affected employee shall be 480 hours for those engaged in a public safety, emergency response, or seasonal activity, and 240 hours for all other employees after April 15, 1986. An employee who has accrued the maximum number of compensatory hours shall be paid overtime compensation in cash for any additional overtime hours of work. An employee shall be permitted to use accrued compensatory time within a reasonable period after it is requested if to do so would not unduly disrupt the operations of the employing public agency. Payment for accrued compensatory time upon termination of employment shall be calculated at the final regular rate received by the employee or the average regular rate during the last three years of employment, whichever is the higher. "Compensatory time" and "compensatory time off" are defined as hours when an employee is not working and which are paid for at the employee's regular rate of pay. These hours are not counted as hours worked in the week in which they are paid. Multiple Job Situations. Employees of a State or local government agency who are employed in fire protection, law enforcement, or related activities may at their own option agree to a special detail to work for a separate or independent employer in such activities. The hours worked for the separate and independent employer (public or private) shall be excluded from hours worked for overtime pay purposes by the original employing agency. This provision shall apply even if the principal employer requires that only certain individuals may engage in the employment by the separate and independent employer and facilities or affects the conditions of employment. Employees of a State or local government may at their own option undertake employment for the same employer on an occasional or sporadic basis in a part-time job in a different capacity than their regular employment. The hours of work in the different job shall not be counted as hours worked for overtime pay purposes on the regular job. Employees of State and local government agencies at their own option but with the approval of their employer may substitute during scheduled hours for other employees employed in the same capacity. In the case of such substitution, the hours involved are credited to the scheduled employee and not to the substitute employee. The employee need not maintain a record that the substitution has taken place. k,unL u. , rdgtZ� Summary of FLSA Amendments Volunteers . Individuals who volunteer their services to State or local governments and receive no compensation, are excluded from the definition of employee and are thus excluded from coverage. They may be paid expenses , reasonable benefits, nominal fees , or a combination of these. However , an employee of a State or local government may not volunteer to his own agency services of the same type the employee is employed to perform. An employee of a State or local government agency may volunteer services to any other State or local government agency, including agencies with which the employing agency has a mutual aid agreement. Discrimination. A State or local government agency that discriminates against an employee because the employee asserted overtime coverage under FLSA after February 19 , 1985 , shall be held to have violated the anti-discrimination provisions of FLSA. Liability and Deferred Payment. No State or local government agency shall be liable under section 16 of FLSA for a violation of overtime pay or related recordkeeping provisions which occurred before April 15, 1986, if the affected employee would not have been covered by FLSA under the Secretary of Labor ' s special enforcement policy on January 1 , 1985, as published in sections 775.2 and 775.4 of 29 CFR Part 775. A State or local government may defer to August 1, 1986, the payment of monetary overtime pay due employees for hours worked after April 14, 1986. Effective Date. The effective date of the Fair Labor Standards Amendments of 1985 is April 15, 1986.