A couple of points which I need clarification on:
1) Where in federal labor law does it say that compensatory time for exempt employees is illegal?
The legal opinion that our union has received indicates that this practice is legal. This opinion was sent to the Mayor and the City Council, see below. My understanding is that our union has never received any legal opinion from the city to counter this opinion. If you or the city has evidence that this practice is illegal, I am very interested in this information.
2) How is the elimination of compensatory time for exempt employees going to save the city thousands of dollars?
In my first post, I indicated the only two ways that I could see the city saving money. One is that exempt employees will be regularly working over 40 hours without compensation and the other is that the old system was being abuse by employees. Is there another scenario?
3) When is an exempt employee's �work product� done? Is it when an employee�s work is done or is it when the work of 3 open positions is done? (Having been a council member, you know the delay in filling city positions.)
4) As for the fine the state received, I am curious if the state was fined for the fact they gave compensatory time to exempt employees or rather because they treated their exempt employees like non-exempt hourly employees?
(The City of Minneapolis was required to pay 2 years back pay to Crime Prevention Specialist (CPS) in the Police department for a similar situation. In that case, the city told the CPSs they were exempt so they could not get time and half for overtime and yet they treated them like hourly employees. The city was eventually found in violation of federal labor laws.)
I look forward to your answers.
I also want to reiterate a very important issue I raised in my first post. I am concerned about the potential path the city is traveling. The word about salaried people (at least those without compensatory time) in the for-profit world is that they are regularly working well in excess of 40 hours per week. As a community organizer and a supporter of families, I am always concerned about policies that seem to point in the direction of making people work more hours. Our families and community will not be strong if the people who make them up do not have the time to invest in them.
As a council member I will insure a quality work environment, fair compensation,
and accountability of city employees. The key to high employee output is
a quality work environment. People need to have a clear set of expectations,
be held accountable for them, encouraged to develop their expertise, and
be treated with respect. Quality work environments allow good employees
to excel and nonproductive employees to become obvious and more easily
addressed. Given the morale of some of our city's departments and the resulting
decrease in work productivity, I believe the city would save many more
thousands of dollars by creating a quality work environment.
Dan Niziolek
Lyndale Resident
MPEA Member
10th Ward City Council Candidate
________________________________________________________________
TO: Mayor Sharon Sayles Belton and City Council Members
FROM: Duane Johnson, MPEA Attorney/Business Manager
DATE: January 10, 2001
SUBJECT: Compensatory Time for FLSA Exempt Employees
_____________________________________________________________
The members of the Minneapolis Professional Employees Association (MPEA) collective bargaining team have asked me to write this memorandum to you on their behalf.
As you know, MPEA has served its Notice of Intent to Strike against the City. Contract talks reached impasse following the City's refusal to give MPEA a contract unless it made the concession of giving up compensatory time for FLSA exempt employees. It has been brought to our attention by MPEA membership that some of you are concerned that the compensatory time provisions for exempt employees in the current contract are illegal and/or expose the City to future liability. You should be advised that both of these concerns are unfounded.
First, as we have previously explained, the current compensatory time provisions have been in MPEA�s contract for as long as anyone can remember. It is my definitive opinion that the provisions are legal.(1) Clearly, if the provisions were illegal they would necessarily have to be stricken from the contract and the present dispute would be moot. You should be aware that similar provisions exist in many collective bargaining agreements in the public (and private) sector. In this regard, I am attaching a copy of Article 27 from the Labor Agreement (2) between the State of Minnesota and the over 10,000-member Minnesota Association of Professional Employees (MAPE), negotiated and finally agreed to just last year. You will note that the State provides compensatory time to its FLSA exempt professional employees.(3) Further, since last October, the MCDA has been collectively bargaining with its professional employees under the contract it has with AFSCME. That contract contains a provision for compensatory time for FLSA exempt employees, which provision is not an issue in those negotiations . I have also been advised that collective bargaining agreements between the federal government and its exempt employees provide for compensatory overtime, and I am currently gathering information relative to this, which I will be happy to share with you in the future. In addition, the legality of compensatory time for exempt employees is supported in labor law treatises.(4)
1. In 1998, the City was also provided with the legal
opinion from Mr. Jim Michels, legal counsel for the Minneapolis Public
Works Engineers Association (MPWEA), opining that compensatory time systems
for exempt employees are permissible.
2. You may find the entire contract at http://www.mape.org/contractgrid.html.
3. I will be happy to furnish you with a copy of
this provision at your request.
4. See, e.g., Gilbert J. Ginsberg et al., Fair Labor
Standards Handbook for States, Local Governments and Schools, Tab 500 Overtime
Compensation, 102 (1998)(�Exempt employees are not subject to the overtime
provisions of the FLSA. � Employers may pay overtime or comp time if they
wish, but they are not required to do so by the FLSA.�
Second, there apparently is some concern that recording exempt employees�
work hours for the purposes of tracking compensatory time will expose the
City to future liability. As stated above, this is simply unfounded.(5)
Presumably, this concern erroneously stems from an investigation conducted
a couple of years ago by the U.S. Department of Labor (DOL) in which several
MPEA exempt employees were found to actually be non-exempt and entitled
to time-and-a-half overtime. DOL calculated overtime worked by these
employees for the previous two year period, and the City was required to
pay the amount calculated. It is our understanding that, at the time
of its investigation, DOL looked at all MPEA positions and determined whether
each position was exempt or non-exempt. The current compensatory
time provisions were in effect during the investigation.
Further, I have contacted the DOL investigator who conducted the investigation, and I asked her whether an employer can avoid liability by simply not recording the work hours of exempt employees who are later determined to be non-exempt. She advised that, obviously, an employer cannot avoid liability under FLSA by its own failure to record hours. She stated that in a case where an employer has been treating non-exempt employees as exempt and there are no records of work hours, DOL will establish by other means (job circumstances, other employment records, employee statements, and any other relevant evidence) the number of hours the non-exempt employees have worked. In addition, the employer will be charged with a record-keeping violation for failure to keep adequate records with respect to its non-exempt employees, and this additional violation may result in further damages being incurred by the employer. In other words, if the City fails to keep work hour records of exempt employees who are later determined to be non-exempt, it may actually incur damages greater than it would incur if it keeps such records. Hence, contrary to the present concern that keeping work hour records exposes the City to liability, the reverse is actually true, in that the City may be exposed to greater liability if it fails to keep such records.
In sum, the present concerns regarding the legality of the compensatory time provisions for FLSA exempt employees under the current MPEA contract and the liability exposure to the City relative to those provisions are unfounded. The provisions are legal and are found throughout public sector employment. Furthermore, the City�s recording of exempt employee work hours does not expose it to any liability under FLSA, as evidenced by the results of the DOL investigation two years ago. In fact, the City's failure to keep work hour records for exempt employees who are later determined to be non-exempt by DOL may actually be an additional record-keeping violation, resulting in the City incurring greater liability than if it keeps such records.
Please feel free to contact me for any further discussion you may desire.
Respectfully submitted on behalf of the MPEA collective bargaining team.
5. Please note that in the second
paragraph of Mr. Michels� opinion he states, �There is virtually no chance
that merely by having a compensatory time system, a public employer will
create a liability under FLSA for employees who would otherwise be exempt.�
