The Fire Officer’s Guide to the Tough Community Questions, Part 7

Photo courtesy of U.S. National Archives and Records Adminstration.   

By Mark Wallace

Elected officials, key stakeholders, and the media often ask really tough questions that put fire officials on the defensive for proposals or operational practices. They expect us to have a logical and compelling explanation to all of their questions and at a moment’s notice. Therefore, it is helpful to consider answers to their questions in advance.

The really tough question for this part of the series is:

Why does the fire department have such high overtime costs and why do they exceed the amount allocated for overtime in the fire department’s approved budget?

This is a complex question, and it must be specific to your department’s situation. In organizations operating under a labor agreement, the specifics of your overtime requirements/obligations are detailed in a section of the agreement. You will find that it stipulates when the organization must pay overtime and the specifics of your minimum staffing as well as “step-up” or “working out of class” provisions.

Most contracts don’t stipulate how the organization will pay the costs of overtime or provide a formula that easily calculates how much money is required in the overtime line item of your budget. If it is not already under the fire department’s control, do the calculations in-house and compare them with those of the finance department. This analysis is critical if your department has a record of exceeding its approved overtime budget.

Departments must use the specific situation of your department, its standard operating procedures, and a review of their compliance with the Fair Labor Standards Act (FLSA) as well as any relevant state laws or local ordinances. Begin with an analysis of your department’s overtime history with the goal of identifying why overtime costs exceeded the budget, and compare projections with the actual amount paid.

Questions you must answer include the following:

1. How much mandatory overtime is built into your staffing and shift schedule policies? Some departments have minimum staffing levels that create an unintended overtime cost burden.
2. What are your full and minimum staffing levels per company and per shift? How often is your department operating at or below its minimum staffing level? Is personnel must be held over or called back to service?
3. Consider your department’s specific work schedule. (i.e., three shifts that work 24 hours on duty and 48 hours off duty, with four personnel assigned to each company and a minimum staffing of three personnel). It takes more than four people to fill one position on a 24/7/365 basis. The exact number depends on your department’s leave policies and your assigned and minimum staffing.
4. Consider your personnel’s sick leave benefits and calculate the total number of sick hours on-shift members take as well as the maximum accrual that is allowed. Also consider what happens when a person reaches the maximum allowable sick leave accrual. How often is overtime used to meet minimum staffing levels because too many personnel are either on sick or vacation leave?
5. How many hours of “banked” sick leave are on the books that members can take next year as compared to the average sick leave actual taken in previous years? For each person on shift, calculate the dollar value of the banked sick leave hours as a potential expenditure liability.
6. Consider vacation policies and the specific use of vacation days by the average member. Also consider the maximum vacation time allowed and what happens when an individual reaches the maximum accrual of vacation leave. How much leave can be carried over from year to year? What is the maximum vacation leave an individual may take in any budget year? Convert those hours to a dollar value.
7. Does your organization allow for compensatory time off in lieu of paying overtime? How much compensatory time is on the books that members can request and use during the next budget year? Convert these hours to a dollar value.
8. What happens when an on-duty shift falls below its minimum staffing level? Does your department hire back off-duty personnel to meet minimum staffing, or does it run short (including brownouts or similar situations)?
9. What is the historical impact of major incidents on overtime? There are a relatively small number of incidents on most departments where the on-duty crew is held over on overtime because of the timing of an early morning fire call. If you have a major incident, does your department need to call off-duty personnel back to duty to cover the incident and/or cover the jurisdiction using reserve apparatus while most or all of the departments first-line resources are committed to an incident? Consider mutual-aid and automatic-aid coverage in this area. You can use previous years’ numbers as a good estimation of the future, but consider salary increases to calculate future costs based on prior years major incidents. (This will be a “wild guess,” but it is better than ignoring the potential costs.)

These considerations are fairly straightforward, but you must make calculations in advance to the point where your elected officials ask this “really tough question.”

Using the above information and carefully looking at the realities over past years will help you calculate your department’s overtime needs. But, this is not the end of the overtime considerations if these calculations don’t roughly match past actual overtime costs.

Many organizations overlook the impact of overtime costs because of the FLSA, which basically states that workers must be paid 1½ times their normal hourly rate (overtime) for time worked over 40 hours in any work week—with the exception of shift firefighters, called a 7K exemption in the Federal Act. (See the FLSA and fire department interpretations of this exemption using online resources).

The International Association of Fire Fighters and the International Association of Fire Chiefs have good resources available to assist you. Ensuring that your fire department is compliant with the provisions of the FLSA can be a complex issue.

For example, a firefighter working a 24-hour on/48-hour off schedule will normally work 168 hours during a 21-day work cycle (one of the common examples used). However, the FLSA requires that all time actually worked over 159 hours during the 21-day cycle be paid at 1½ times the regular hourly rate if he actually worked all 168 hours the individual was scheduled in that 21-day cycle. This would require that the individual be paid nine hours per the 21-day cycle at 1½ times his normal hourly rate, i.e., the overtime rate.

If these FLSA-caused overtime costs are accounted for as generic overtime costs—just like the overtime paid for “extra” work hours—the overtime budget may not reflect these standard costs. All too often, the fire department’s overtime budget line item has only estimated the costs of the extra work hours and not the FLSA-caused overtime plus the extra overtime hours.

If your organization accounts for FLSA-caused overtime as a component of your department’s overtime costs (expenditure side), but the total salary budget (revenue side) is left in a salary line item without adjusting for FLSA overtime costs that were budgeted as part of the total salary allocation, the annual salary costs will be under budget each year. This is most likely the source of problems when a fire department’s overtime budget is exceeded every year. A common problem is to budget all salary at the regular hourly rate, but the department then has to pay the FLSA-caused overtime at 1½ times the regular hourly rate. If this is the case in your organization, overtime will exceed your budget if that amount was not included in your overtime budget allocation.

FLSA is a complex law, and even though there are several examples and formulas purporting to show how to calculate the hourly rate for on-shift personnel, you will want an FLSA expert to help you sort it all out if you think you may have an issue.

There can be severe consequences for using the wrong calculations. Being proactive is a smart practice. There are other common issues involving FLSA and shift firefighters, but these will be left for a future article. Don’t let such an ongoing issue be a surprise.

Mark Wallace (MPA, EFO, CFO, FIFireE) is the author of Fire Department Strategic Planning: Creating Future Excellence. He is the former State Fire Marshal of Oregon and a former chief in Colorado and Texas. He currently operates Fireeagle Consulting (www.fireeagleconsulting.com). He wrote the planning chapter in the 7th edition Fire Chief’s Handbook, which was released in fall 2014.

More Mark Wallace

• The Fire Officer’s Guide to the Tough Community Questions, Part 6
  
• The Fire Officer’s Guide to the Tough Community Questions, Part 5
  
• The Fire Officer’s Guide to the Tough Community Questions, Part 4
• The Fire Officer’s Guide to the Tough Community Questions, Part 3
  
• The Fire Officer’s Guide to the Tough Community Questions, Part 2
  
• The Fire Officer’s Guide to the Tough Community Questions, Part 1