San Diego Firefighters Settle Unpaid Overtime Lawsuit for $3.4M

San Diego firefighters stand to benefit from a $3.4 million settlement reached with the city over claims of California labor law violations.

City council members agreed earlier this month to pay $3.4 million to resolve the claims of nearly three-quarters of San Diego’s 943 firefighters, The San Diego Union-Tribune reported Oct. 14. The firefighters alleged the city violated the U.S. Fair Labor Standards Act in the way it was calculating their overtime pay.

San Diego Firefighters Back Pay

According to The Union-Tribune, the firefighters union representative said although the overall settlement might seem significant, the employees themselves aren’t expected to net big payments.

“That’s partly because the dispute is about overtime pay calculated at a fractionally lower rate than it should have been,” the newspaper reported. The back pay will also be subject to income tax withholding and pension contribution withholding, the union representative told The Union-Tribune.

Court Case Prompted Overtime Lawsuit

The San Diego firefighters were prompted to file the lawsuit by a 2016 decision handed down from the U.S. Court of Appeals for the 9th Circuit that set a new precedent for the way overtime pay should be calculated.

In hearing a case against the city of San Gabriel in California, the 9th Circuit judges ruled that overtime pay should not be based solely on an employee’s rate of pay because that fails to take into consideration other components of compensation – namely, employee benefits such as health care insurance contributions.

Overtime calculations should include the value of those benefits, the court said. So now, instead of setting the overtime rate of pay at one and one-half times a worker’s salary it must also include one and one-half times the value of benefits such as health insurance subsidies.

Several other California cities, including Santa Clara, retroactively adjusted their approach to overtime payments in alignment with the 9th Circuit’s decision to compensate for the three years preceding the court’s ruling. The three-year look back was prescribed by the court’s decision in the San Gabriel case.

San Diego was not one of those cities, and so the firefighters and several other city employees filed lawsuits.

Second Overtime Wages Settlement in San Diego

In May 2019, San Diego was served with a lawsuit from more than 2,500 workers suing over wrongfully calculated overtime wages in a case of consolidated litigation that is similar to a class action lawsuit, newspaper reports said. The cases were all brought on the basis of the San Gabriel precedent and the fact that San Diego hadn’t retroactively corrected the overtime payments.

The city reached a settlement agreement with most of those employees in April, promising to pay out in excess of $6.2 million to resolve civil actions “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 Union-Tribune reported.

San Diego Firefighters Case Handled Separately

The San Diego firefighters’ lawsuit was settled separately from the other city employees because of the fundamental differences in the way firefighters are scheduled and paid.

“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,” The Union-Tribune reported. Their overtime pay is also based on a 28-day pay period consisting of 212 regular working hours.

San Diego firefighters usually work three consecutive 28-day cycles. The first two include nine 24-hour shifts totaling 216 hours, the newspaper said. The third includes ten 24-hour shifts, resulting in 240 hours. The city was in the habit of averaging those out to three cycles of 224 hours, taking “eight hours from four consecutive paychecks and adding 16 hours to two consecutive paychecks,” The Union-Tribune reported.

That averaging violates the Fair Labor Standards Act, the workers argued.

The San Diego firefighters lawsuit also dealt with issues related to comp time – the practice of giving firefighters the option to take paid time off instead getting overtime pay. “Because the city had calculated comp time at the employees’ regular rate of pay, not a higher rate of pay based on the cash payouts for medical coverage, the lawsuits contend the employees were also shortchanged on comp time,” the Morning Call reported.

A lawyer and spokesman for the San Diego firefighters said workers for cities throughout California were facing similar situations, the Morning Call said. “I think just about every municipality has had to make adjustments,” attorney Jim Cunningham was quoted by the newspaper as saying.

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