Alamo v. United States

Alamo v. United States

850 F.3d 1349 (Fed. Cir. 2017)

Authored by Heather Paik

Statement of Facts: The Army employed plaintiff-appellants as Emergency Medical Technicians (“EMTs”) to provide emergency medical services at Fort Stewart, Liberty, Georgia. The EMTs were generally scheduled for a compressed schedule consisting of 24 hours on-duty followed by 48 hours off-duty. After October 2012, the EMTs switched to a schedule of two 48-hour workweeks. Because the EMTs worked more than 40 hours in one week, they were entitled to Fair Labor Standards Act (“FLSA”) overtime pay. For a typical biweekly pay period, the government compensated the EMTs with (1) basic pay under the Federal Employees Pay Act (“Title 5”); (2) standby duty premium pay under Title 5; and (3) FLSA overtime pay for regularly scheduled overtime.

Procedural History: The EMTs filed suit in the Court of Federal Claims, alleging the government underpaid them by using an incorrect formula to calculate their FLSA overtime. The parties cross-moved for summary judgment. The Court of Federal Claims granted the government’s motion and denied the EMTs’ motion, finding that no underpayment occurred because the government applied the correct calculations to the EMTs’ pay. The EMTs appealed to the Federal Circuit, which claimed jurisdiction under 28 U.S.C. § 1295(a)(3). 

Questions Presented: (1) Did underpayment occur because the government applied incorrect methodology to calculate the EMTs’ pay pursuant to § 551.512(b) of the FLSA? (2) Did the Army correctly calculate the EMTs’ regular rate of pay when determining the halftime portion of their FLSA pay and their pay on a weekly basis under § 551.501(a) of the FLSA?

Holding: Affirmed. (1) No. The Court of Federal Claims properly concluded that no underpayment occurred because the government applied the correct methodology to calculate the EMTs’ pay. (2) Yes. The Army correctly calculated the EMTs’ regular rate of pay for their FLSA pay and their pay on a weekly basis under § 551.501(a) of the FLSA.

Reasoning: (1) To the extent the regulatory language of 5 C.F.R. § 551.512 is unclear, contextual analysis of Title 5 and the FLSA resolves any ambiguity. 850 F.3d at 1352. The FLSA gives employees their normal compensation for regular scheduled overtime hour, plus an additional halftime bonus. Id. at 1353.By design in Title 5, Congress and the Office of Personnel Management (“OPM”) intended federal employees working standby hours to receive less pay than those who actively work during their entire regularly scheduled overtime. 5 U.S.C. § 5545(c)(1). Regulations such as 5 C.F.R. § 551.512 must be interpreted in light of the wide discretion the OPM has to prescribe rules for federal employee pay.

Under the FLSA, an agency must compensate its overtime-eligible employees for all hours of work in excess of 8 in a day or 40 in a workweek at a rate equal to one and one-half times the employee’s hourly regulated rate of pay, subject to certain exceptions. 5 C.F.R. § 551.501(a); 29 U.S.C.§ 207(a)(1). If an employee qualifies for FLSA overtime, he or she is entitled to: the straight time rate of pay times all overtime hours worked; plus one-half times the employee’s hourly regular rate of pay times all overtime hours worked. 5 C.F.R. § 551.512(a). Ordinarily, an employee’s straight time rate of pay is equal to the employee’s rate of pay for his or her position, exclusive of any premiums, differentials, or cash awards or bonuses. 5 C.F.R. § 551.512(b). Moreover, 5 C.F.R. § 551.512(c) requires the government to pay employees at a rate at least equal to the employee’s straight time rate of pay for all nonovertime hours of work in the workweek, and 5 C.F.R. § 551.513 mandates that employees are paid their FLSA overtime in addition to other pay.

Here, the EMTs receive the straight time rate of pay times all overtime hours worked when the government pays them annual premium standby pay in addition to basic pay. The EMTs’ straight time rate of pay is calculated differently since they must remain at their duty stations for longer than 40 hours per week. Thus, because the EMTs receive standby pay, their straight time rate of pay is equal to basic pay plus annual premium pay divided by the hours for which the basic pay plus annual premium pay is intended. Prescribing a separate formula for calculating the straight time rate of pay when an employee receives standby pay reflects the OPM’s intent to cover all regularly scheduled hours, including regularly scheduled overtime hours, through the combination of basic and standby pay. Because the EMTs receive the additional half-time bonus on top of their straight time rate of pay, which itself covers all hours worked, the government’s formula satisfies both provisions of §§ 551.512 and 551.513.

(2) The EMTs argue that the Army miscalculated the EMTs’ regular rate of pay when determining the halftime portion of their FLSA pay. 5 C.F.R. § 551.512(a)(2). The EMTs conceded that their argument fails if the court finds, as they have, that the Army properly paid them the “straight time” portion of overtime under the FLSA. 850 F.3d at 1354. Thus, the court concludes that the Army properly calculated the EMTs’ regular rate of pay.

Finally, the plain language of the applicable regulations requires FLSA overtime to be calculated on a weekly basis: an employee is entitled to overtime “for all hours of work in excess of 8 in a day or 40 in a workweek.” 5 C.F.R. § 551.501(a) (emphasis added). Thus, the EMTs’ argument that they are entitled to have their FLSA overtime calculated on a biweekly rather than weekly basis fails. Accordingly, the Army correctly calculates the EMTs’ pay on a weekly basis.

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