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State leagues help NLC fund FLSA amicus brief.

Overwhelming financial support by state municipal leagues has made it possible for NLC to Me an amicus brief in McDonnel v. City of Omaha, an appeal to the Eighth Circuit of a district court's ruling that an employee is not exempt from the Fair Labor Standards Act (FLSA) overtime provisions if the employee's pay may be reduced for absences of less than a day.

NLC and the state municipal leagues believe that strong amicus participation in McDonnel provides municipalities with a twofold opportunity: first, protection against windfall overtime claims by highly compensated municipal employees; and second, establishment of a basis for challenging, in the U.S. Supreme Court, the broad federal power to preempt city authority set forth by the U.S. Supreme Court in Garcia v. City of San Antonio Transit Authority, which reversed the victory by cities in NLC v. Usery.

Following the U.S. Supreme Court ruling in Garcia, the FLSA was extended to state and municipal governments and their employees. In general, the FLSA requires that an employee be paid at overtime rates for any work hours performed in excess of forty in any given week. Certain executive and administrative personnel are exempt from the Act's overtime provisions if the employee satisfies both a duties test and a salary basis test.

In 1990, the Ninth Circuit's ruling in Abshire held that in order to satisfy the salary basis test, an employee's pay cannot be subject to deductions for absences of less than a day. Over the course of the past two years, federal district courts have relied on Abshire to further expand the factors that preclude an employee from meeting the salary basis test.

That is, courts have ruled that the salary basis test is not satisfied if the employee is required to use leave time for absences of less than one day; works set hours; must record time worked; accrues "compensation time;" receives pay calculated by multiplying the number of hours worked times the rate of pay; or, is subject to suspension for disciplinary reasons.

In Los Angeles alone the liability exposure from these cases is at least $5 million with the filing of more claims expected.

Most recently, in McDonnel, the federal district court relied on Abshire to award four assistant fire chiefs over $75,000 in compensation, damages and attorney fees based on the fact that their pay was subject to deductions for absences of less than a day. Omaha may have as many as 1,000 other employees who could assert similar claims.
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Title Annotation:National League of Cities, Fair Labor Standards Act
Author:Gustafson, Kate Herber
Publication:Nation's Cities Weekly
Date:Nov 2, 1992
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