San Diego paying out $3.4M to 700 FFs for underpaid overtime

The firefighters' lawsuit stemmed from a 2016 ruling that overtime calculations should factor in health coverage and other benefits


David Garrick
The San Diego Union-Tribune

SAN DIEGO — San Diego agreed this week to pay $3.4 million to more than 700 city firefighters to compensate them for underpaid overtime they should have received several years ago.

The payout comes six months after the city reached a similar legal settlement with more than 2,300 other city workers for the same kind of underpaid overtime.

San Diego will pay $3.4 million to 700 firefighters for underpaid overtime dating back several years. (Photo/City of San Diego)
San Diego will pay $3.4 million to 700 firefighters for underpaid overtime dating back several years. (Photo/City of San Diego)

The cases were handled separately because overtime calculations differ for firefighters, who work 24-hour shifts that include sleeping overnight in firehouses.

The City Council Tuesday unanimously approved the new firefighter settlement, which covers three-quarters of the city's 943 firefighters.

The payouts aren't expected to have a significant impact on the budget crisis San Diego is facing during the pandemic. The city expected to owe large payouts in the underpaid overtime cases, so money was set aside before the budget crisis.

The lawsuits are based on a 2016 federal appeals court ruling against the city of San Gabriel that created a new interpretation of how employers should calculate overtime pay for workers.

Instead of basing overtime on a worker's hourly wage, the ruling said that overtime should be based on the worker's hourly wage plus an estimate of the value of fringe benefits they receive, such as health coverage.

Multiplying an employee's hourly rate of pay by one and a half, which had been the normal practice, became insufficient. Employers now must adjust the hourly rate to include the value of medical care and then multiply that by one and a half.

Shortly after the 2016 ruling by the federal 9th Circuit Court of Appeals, which the U.S. Supreme Court declined to review in 2017, San Diego officials adjusted their policies for calculating overtime to reflect the ruling.

Many other cities also made such adjustments. A lot of them also compensated affected employees for underpaid overtime during the preceding three years — a timeline established by the federal ruling.

But San Diego chose not to issue such compensation, and affected city employees sued.

In April, the city agreed to a $6.2 million payout to settle litigation involving 200 police officers, 1,150 white collar workers represented by the Municipal Employees Association and roughly 1,000 blue collar workers represented by local 127 of the American Federation of State, County and Municipal Employees.

The litigation for firefighters was more complex. Under federal law, firefighters must work more than 56 hours in a week to be eligible for overtime pay, instead of the 40-hour threshold for other employees.

Government agencies also are allowed to calculate overtime for firefighters based on a 28-day pay period, with 212 hours as the threshold for overtime.

In San Diego firefighters typically work three consecutive 28-day cycles, with the first two cycles including nine 24-hour shifts — or 216 hours — and the third cycle including 10 24-hour shifts — or 240 hours.

City practice has been to average those cycles by subtracting eight hours from four consecutive paychecks and adding 16 hours to two consecutive paychecks.

The firefighters' lawsuit contends that averaging with cycle time is illegal under the federal Fair Labor Standards Act.

Jesse Connor, president of the labor union representing city firefighters, said Wednesday that individual firefighters will not receive hefty payouts. That's partly because the dispute is about overtime pay calculated at a fractionally lower rate than it should have been.

Connor also noted that taxes and union dues will be deducted from what the firefighters receive.

This story originally appeared in San Diego Union-Tribune.

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©2020 The San Diego Union-Tribune

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