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There is a statutory presumption that remuneration in any form is included in the regular rate calculation. The burden is on the city to establish that the remuneration in question falls under an exception.
Appellee firefighters, employed by the City of Columbia, Missouri, brought suit against the City for failing to include a series of payments in the firefighters' regular rate of pay, in violation of 29 U.S.C. § 207(e) (the Fair Labor Standards Act or "FLSA"). The firefighters subsequently moved for partial summary judgment, specifically alleging that monies earned under the City's sick leave buy-back, step-up pay, meal allowance, and standby programs should be included in their regular rate of pay. The firefighters also alleged the City willfully violated the FLSA and used incorrect hours ratio to determine when the firefighters become eligible for overtime pay under the FLSA. While the firefighters' motion for partial summary judgment was pending, the parties entered into a settlement agreement on the firefighters' longevity pay, step-up pay, and standby pay claims. Regarding the firefighters' outstanding claims, the district court subsequently granted the firefighters' motion in part, ruling that sick leave buy-back monies should be included in the firefighters' regular rate of pay. The City appealed the district court’s grant of summary judgment to the firefighters, arguing that monies paid under its sick leave buy-back program should not be included in the firefighters' regular rate of pay.
Should the monies paid under the city’s leave buy-back program have been included in the firefighters' regular rate of pay?
The court held that the lump sum payments made under the city's sick leave buy-back program should have been included in the firefighters' regular rate of pay under 29 U.S.C.S. § 207(e) because it was remuneration for employment. The appellate court noted that the city's policy was used to encourage regular workplace attendance, which was a general duty of employment. The decision was based on the authority of 29 C.F.R. § 778.223 and the statutory presumption favoring the inclusion of all monies in the regular rate of pay. The decision was affirmed.