May 9, 2000To: All Police Chiefs and Sheriffs
From: Martin J. Mayer
MAJOR CHANGE REGARDING FLSA and CTO
On May 1, 2000 the Supreme Court of the United States issued an opinion in the case of Christensen v. Harris County, 2000 WL 504578 (Tex.), 2000 DAR 4497, substantially impacting the issue of compensatory time off accrued pursuant to the Fair Labor Standards Act (FLSA). The primary holding of the case is that employers can require employees to utilize accrued compensatory time off when the employee is close to reaching the maximum number of hours which may be accumulated.
It is extremely important to understand, however, that this case in no way changes the basic premise of the FLSA § 207(o)(5) which “. . . provides that an employee who requests to use compensatory time must be permitted to do so unless the employer’s operations would be unduly disrupted.” The right of the employee to utilize his or her compensatory time has not been affected nor diminished as a result of the Christensen decision.
The basic premise of FLSA is that an employee must be paid in cash for any overtime worked, in excess of the minimum requirements of FLSA, at the same time the employee is paid his or her regular wages. The law permits the public sector employer to grant compensatory time (at time and a half) in lieu of cash payments for the overtime worked. The court stated that “to provide this form of compensation, the employer must arrive at an agreement or understanding with employees that compensatory time will be granted instead of cash compensation.” If the employer enters into such an agreement, however, the use of that employee’s compensatory time is still virtually “on demand” time – so long as the demand is reasonable.
The court stated that “. . . the FLSA provides that an employer must honor an employee’s request to use compensatory time within a ‘reasonable period’ of time following the request, so long as the use of the compensatory time would not ‘unduly disrupt’ the employer’s operations. The FLSA also caps the number of compensatory time hours that an employee may accrue. After an employee reaches that maximum, the employer must pay cash compensation for additional overtime hours worked. In addition, the FLSA permits the employer at any time to cancel or ‘cash out’ accrued compensatory time hours by paying the employee cash compensation for unused compensatory time. ”
The court further stated that “§ 207(o)(5) guarantees that, at the very minimum, an employee will get to use his compensatory time (i.e., take time off work with full pay) unless doing so would disrupt the employer’s operations.”
The court then went on to point out that workers are not permitted to accrue more than 240 or 480 hours of compensatory time depending upon the nature of the job. FLSA conditions the employer’s ability to provide compensatory time upon the employee not accruing CTO in excess of these limits. This provision “. . . helps guarantee that employees only accrue amounts of compensatory time that they can reasonably use.”
The court then focused on whether or not an employer could reduce the number of hours accrued when the employee was reaching the maximum permitted, in order to avoid the obligation of paying for any additional overtime through cash payments at time and a half.
The court stated that if employees refused to utilize compensatory time when they reached the statutory maximum for accrual, it would force employers to pay cash compensation for any overtime worked beyond the maximum permitted. “At bottom, we think the better reading of § 207(o)(5) is that it imposes a restriction upon an employer’s efforts to prohibit the use of compensatory time when employee’s request to do so; that provision says nothing about restricting an employer’s efforts to require employee’s to use compensatory time.”
The court ultimately stated that “. . . under the FLSA an employer is free to require an employee to take time off work, and an employer is also free to use the money it would have paid in wages to cash out accrued compensatory time. The compelled use of compensatory time challenged in this case merely involves doing both of these steps at once. It would make little sense to interpret § 207(o)(5) to make the combination of the two steps unlawful when each independently is lawful.”
/ What does this mean to your Department?
If your agency has agreed with your employees to allow the use of compensatory time off in lieu of cash payments then it must continue to recognize the employee’s right to request that time off, and to be able to use it within a reasonable time thereafter, so long as it does not unduly disrupt the employers operations.
The Department of Labor has issued several opinions regarding what is meant by the phrase “unduly disrupt” the employer’s operations. It should be noted that the need to pay others overtime to cover for an employee or the fact that it will take an effort to locate others to fill in for that employee are not considered justifications for denying the individual the right to use his or her CTO. On the other hand, exigent circumstances, such as major incidents which are known to be planned for the days the employee is requesting to be off usually will provide justification for denying the request.
The primary impact of this case is that agencies can now compel employees to take time off, and charge it against the accrued CTO “bank,” in order to bring it below the legally permitted maximum. In that way, if employees work overtime thereafter, the employer will not be compelled to pay cash since the employees will have reduced the number of accrued CTO hours below the maximum permitted. Compensation for the new overtime will again be in the form of compensatory time off.
The implementation of this provision will undoubtedly create some unrest within your organizations. Therefore, as always, it is imperative that you receive and follow advice and guidance from your departments legal advisor prior to initiating a change based upon this case decision.
Should you wish to discuss this matter in greater detail, please do not hesitate to contact Martin Mayer at (562) 590-8280.
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[THE LAW OFFICES OF MAYER & COBLE, located in Long Beach, limits its practice to representing cities, counties and the State as legal advisor to their police and sheriff’s departments. Mr. Mayer was, for 10 years, the State Chairman of CPOA’s Police Legal Advisors Committee. He currently serves as counsel to the California Police Chief’s Association, the California State Sheriff’s Association and the California Peace Officers’ Association.]
MJM/sgc
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