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FLSA Revisions Raise Exemption Questions

Fire Chief - July 1, 2004

Byline: [ John Rukavina ]

For the past 20 years, chief fire officers have struggled with the often contradictory and sometimes incomprehensible rules that govern the Fair Labor Standards Act. But it appears that recently announced rewrites of U.S. Department of Labor rules may simplify FLSA as it applies to firefighters, police officers and EMS personnel. Maybe.

FLSA became law for the private sector in 1938; the U.S. Department of Labor, which had been in existence for less than 10 years at the time, was charged with writing the rules that would detail of FLSA enforcement. It wasn't until 1985 that the U.S. Supreme Court ruled that FLSA applied to local government, in the now-famous (or reviled, depending on your point of view) case, Garcia v. San Antonio Metropolitan Transit Authority (469 U.S. 528, 1985). FLSA itself is relatively uncomplicated, but the devil is in the details - in this case, the enforcement rules that DOL writes and amends.

A centerpiece goal of the current Department of Labor was a complete overhaul of FLSA rules and regulations. On March 31, 2003, Labor Secretary Elaine Chao presented new rules for public comment. The new rules drew almost immediate fire from the International Association of Fire Fighters, the Fraternal Order of Police, the National Association of EMTS and similar public safety worker organizations.

The controversy over the DOL's proposed rules moved to Congress. Although Congress has no direct role in executive-branch agency rule-making, it can withhold funds needed to support enforcement of rules, and ultimately it can override any agency's rules by passing a law. So rather than marching into the face of what looked like substantial Congressional opposition, Chao accepted public comments (the most ever submitted in connection with a federal rule change), and retired to the DOL conference rooms to review the proposed rules and changes.

On April 23, Chao presented DOL's "new" new FLSA rules. And while the new-rule controversy has been reignited in Congress, public safety employee groups have been quietly examining Section 541.3(b) of those new rules:

"(b)(1) The section 13(a)(1) exemptions and the regulations in this part do not apply to police officers, detectives, deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or probation officers, park rangers, fire fighters, paramedics, emergency medical technicians, ambulance personnel, rescue workers, hazardous materials workers and similar employees, regardless of rank or pay level, who perform such work as preventing, controlling or extinguishing fires of any type; rescuing fire, crime or accident victims; preventing or detecting crimes; conducting investigations or inspections for violations of law; performing surveillance; pursuing, restraining and apprehending suspects; detaining or supervising detaining or supervising suspected and convicted criminals, including those on probation or parole; interviewing witnesses; interrogating and fingerprinting suspects; preparing investigative reports; or other similar work.

"(b)(2) Such employees do not qualify as exempt executive employees because their primary duty is not management of the enterprise in which the employee is employed, or a customarily recognized department or division thereof.... Thus, for example, a police officer or fire fighter whose primary duty is to investigate crimes or fight fires is not exempt ... merely because the police officer or firefighter also directs the work of other employees in the conduct of an investigation or fighting a fire.

"(b)(3) Such employees do not qualify as exempt administrative employees because their primary duty is not the performance of work directly related to the management or general business operations of the employer....

"(b)(4) Such employees do not qualify as exempt professional employees because their primary duty is not the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized instruction... Although some police officers, fire fighters, paramedics, emergency medical technicians and similar employees have college degrees, a specialized academic degree is not a standard prerequisite for employment in such occupations." (Author's emphases added.)

What a difference a year makes. Between March 2003 and April 2004, DOL apparently decided to avoid a battle with first responders and Congress by clearly pushing any ideas of changing public safety worker non-exempt rules off the table.

I've already heard questions from firefighters and fire officers about what section 541.3(b) does. Here are some of them:

Does this mean that all fire service personnel - including fire chiefs and chief fire officers - are now eligible for overtime? That phrase in 541.3(b)(1), "regardless of rank or pay level" sounds inviting, but the answer is probably no. Look carefully at the language of section 541.3(b)(2). A firefighter's "primary duty is not management of the enterprise in which the employee is employed," but it's an uphill struggle to argue that the "primary duty" of a fire chief (or assistant chief, or deputy chief or battalion chief) is something other than "management of the enterprise."

What if my department requires candidates for fire captain to hold an associate's degree in fire science? Would that requirement mean that the position is exempt under the "professional" exemption? The language of section 541.3(b)(4) seems to employ a two-part test:

*The work requires knowledge of an "advanced type" requiring "prolonged ... specialized instruction" or experience.

*A "specialized degree" is a "standard prerequisite" for such work.

Would an associate's degree constitute prolonged specialized instruction? And if an associate's degree is required for promotion to fire captain in individual departments, does the phrase "standard prerequisite" apply to a single employer - standard within that work force - or to the fire service as a whole? Those will be good questions for a jury at a trial on this question.

Doesn't this settle, once and for all, the question of whether a fire captain is a non-exempt "working supervisor" or some kind of exempt "supervisor/administrator"? Good question. While many career fire departments have classified fire captains as non-exempt working supervisors, some fire service employers argue that, because fire captains do more than supervise firefighters at fires, they should be considered exempt, and thus ineligible for FLSA overtime pay.

Section 541.3(b)(2) seems to suggest that a fire captain should be exempt, but I suspect that the battle will continue. Look carefully at the words "merely because," which suggest that such an employee does nothing in addition to firefighting other than to "merely ... [direct] the work of other employees in the conduct of fighting a fire."

If that fire captain is the classic "working supervisor" who fights fire and does nothing more than supervise other firefighters at fires, then that fire captain would presumably be eligible for FLSA overtime. But if a fire captain has supervisory duties in addition to those exercised at a fire, the argument can be made (and some governmental employers will continue to make it) that a fire captain with those additional duties can be classified as exempt, even under this new rule.

The language of Section 541.3(b) has seized the attention of chief fire officers, overshadowing other FLSA rule changes that could affect the fire service. With the executive and administrative exemptions still alive and well for our purposes, it's important to know, at least generally, what's changed for exempt employees.

Factors test. The old 50% rule, in which an employee must spend more than 50% of his or her time at management of the enterprise, and/or customarily directing the work of two or more employees to be exempt as an executive, is gone. There's a new "factors" series of test questions, including importance of exempt duties compared to non-exempt duties, amount of time spent doing exempt work and freedom from direct supervision, that are used to determine whether an employee is an exempt executive.

Duties test. A new element has been added to the "duties" test for executive exempt status. To be considered an executive, the employee must be able to hire or fire, or be someone whose hire-or-fire recommendations are "given particular weight," as well as work at managing the enterprise and directing the work of two or more employees.

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