Fair Labor Standards Act litigation

The purpose of this Communiqué is to notify OSBA members of a concerted litigation effort that is currently taking place across the nation concerning alleged school district violations of the overtime pay provisions of the Fair Labor Standards Act (FLSA).

What's going on?

The litigation thus far has been confined to the following states: Alabama, Arkansas, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina and Tennessee. OSBA and the National School Boards Association have reason to believe that this litigation may spread to other states, including Ohio.

These lawsuits target violations of overtime pay rules for employees in the following school district classifications: bus drivers, teachers' aides, cafeteria workers, custodians, assistant coaches and any other support-type, non-certified personnel who may be covered under the overtime provisions of the FLSA.

What the law says: FLSA basics

The FLSA provides that employers must pay employees a minimum wage and that nonexempt employees who work over 40 hours in a seven-day workweek must be compensated at one and one-half times their regular rate of pay for those excess hours. Additionally, employers must maintain adequate records of the hours employees work and comply with the child labor provisions of the law. Instead of overtime compensation, public employers may permit employees to accumulate and use compensatory time. Compensatory time may be provided only pursuant to a collective bargaining agreement or an agreement between employer and employee prior to the work being performed.

"Nonexempt employees" refers to those workers who are entitled to the protection of the act. Exempt employees (who are not subject to the FLSA) include professional employees, administrators and executive employees, among others. There are regulations that provide definitions and tests to determine which employees are exempt from FLSA requirements.

The potential penalties for violating the overtime pay provisions of the FLSA can be severe for employers. The district and individual supervisors may be held civilly or criminally liable for violations, and they may be sued by the U.S. Department of Labor or by employees. Civil liability can include liquidated damages, back pay, injunction from further violation and, if violations are found to be willful, punitive damages may be awarded. Criminal penalties can include fines of up to $10,000 and/or six months in jail.

Ohio's wage-hour laws are found at Ohio Revised Code Chapter 4111. The FLSA says that if the state law provides greater protection for employees, that law applies (29 USC 218). Ohio law is similar to the provisions of the FLSA and, in general, does not provide greater protections than the FLSA.

Problematic areas for school districts

There are several employment scenarios that can raise concerns regarding FLSA overtime compliance. The following are a few of the more problematic areas:

• Dual employment
  Situations can arise in districts where one nonexempt employee is performing two separate jobs for a district, and his or her total hours of work for both jobs combined exceed the permissible 40 hours per seven-day period. This may be an issue, especially in smaller districts where qualified candidates are hard to find for certain positions.
  • Example: a bus driver who also works as a cook in the district during the school day and exceeds 40 hours in a seven-day period.
• "Suffering or permitting" employees to work over 40 hours in one week
  If an employee is not exempt from the overtime rules under the FLSA, he or she is not permitted to work more than 40 hours in any given seven-day period of time unless the employee is paid overtime (time and one-half of the basic hourly rate) to do so. In some instances, districts may not even realize that this is a potential problem by "suffering or permitting" their employees to work beyond 40 hours in a seven-day period.
  • Example: an administrative secretary who attends a board meeting one night to take minutes and the hours he or she attends that meeting put him or her over the 40/seven-day period limitation.
• Out-of-town travel
  This potential problem area applies particularly to bus drivers in a district who drive "extra trips" or "field trips" out of town and who are paid for their time while on the trip. This is especially problematic for districts who compensate their drivers, per negotiated agreements or past practice, for "sitting time" (time spent waiting on the bus for students to complete the activity at the destination of the extra trip), in addition to extra trip driving time.
• "Occasional and sporadic" work
  "Occasional and sporadic" work is currently defined under the FLSA as those situations where a nonexempt employee performs work that is outside his or her regular job and work hours. If nonexempt employees perform "occasional and sporadic" work, they are not entitled to overtime pay for this work. This exception to the overtime pay rules is extremely narrow, however.
  • Example of "occasional and sporadic" work: a cook who works late one school night to help collect tickets for a sporting event.
  • NOT an example of "occasional and sporadic" work: a cook who works late a few school nights to help prepare the kitchen for different sports banquets.

These are examples of some of the more common FLSA issues for school districts. When a district is challenged with a potential FLSA violation, the district has the burden of proving that no violation occurred. The records maintained by some districts may not be sufficient to meet this burden.

Changes may be coming

On March 27, 2003, the U.S. Department of Labor published new proposed rules to modernize the FLSA. The period for public comment on the rules ended in late June. The proposed changes seek to extend the protection of the FLSA to more workers by increasing the levels of pay that white collar workers must exceed in order to be exempt (the "salary level" test) and by changing definitions of executive, administrative and professional duties (the "duties tests"). For more information on the proposed changes, visit: http://www.dol.gov/esa/whd/

What to do NOW

To help defend against FLSA challenges and the impending threat of litigation, districts can take proactive and preventative measures now. Districts should perform a "self-audit" for FLSA compliance. This should include the following:

• audit payroll and time-keeping records and practices for the past three years;
• attempt to identify any problematic areas or deficiencies in time-keeping practices within the classified, nonexempt staff;
• identify those employees who may be working over 40 hours in a seven-day period, and determine if the "suffering or permitting" rules apply to these employees;
• identify those employees who are working two or more separate jobs for the district, and track their hours worked in a seven-day period;
• review "comp time" policies and procedures, and ensure that they are being followed by all nonexempt staff;
• document the use and administration of the "comp time" practices for nonexempt staff;
• post FLSA requirements (posters) in conspicuous places where nonexempt employees are certain to see them.

Member districts may contact their legal counsel, accountant or OSBA for assistance with the auditing process.

The information in this Communiqué is intended as general information. It should not be relied upon as legal advice. If legal advice is required, the services of an attorney should be obtained.

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© Ohio School Boards Association, 2004