In Wallace v. City of San Jose (9th Cir. 2020) 799 Fed.Appx. 477, the Ninth Circuit Court of Appeals granted the City of San Jose summary judgement in an FLSA lawsuit over alleging the city under calculated the Regular Rate of Pay used to calculate firefighters’ overtime and claimed unauthorized credits based on contractual overtime that exceeded the FLSA minimum requirements.  Here, the appellate court ruled the firefighters failed to present evidence that they were underpaid FLSA overtime.


The City had adopted a 28-day pay period for its firefighters and a base hourly rate for 224 hours per work period, regardless of whether they actually work a full 224 hours. Anytime a firefighter works hours outside of his or her regularly scheduled shifts, the City pays “contractual overtime” of 1.5 times his or her base hourly rate for each additional hour worked. Such “contractual overtime” payments are distinct from FLSA overtime requirements.  The firefighters are entitled to FLSA overtime pay for each hour worked over the 212-hour threshold.  Each work period, the City calculates what is owed to its firefighters under FLSA. If the amount the City paid a firefighter is less than required under FLSA, it adds a FLSA overtime adjustment to the firefighter’s paycheck at the end of the work period.

The appellate court held that the city conclusively demonstrated that it paid firefighters more than was required under FLSA, regardless of the method applied for calculating the Regular Rate of Pay.  The DOL Regulations provide different calculation formulas depending on whether employees are paid a base salary or on a purely hourly basis.  Under the salaried method, the divisor used is the regularly scheduled hours rather than all hours worked, and the multiplier is 1.5 as opposed to a .5 multiplier.  

The other dispute centered on whether the City takes an improper “credit” against its FLSA overtime liability.  The Plaintiffs alleged that the City improperly took a 1.5 credit for contractual overtime paid and deducted that credit from its FLSA liability, when they were only entitled to take a half-time credit (0.5) against their FLSA overtime liability.  However, the City taking such a “credit,” and a supervising accountant for the City made a sworn declaration that it does not do so.

The court admonished the firefighters for “fail[ing] to adduce any specific evidence to substantiate their improper credit argument.”  They submitted their own calculations but the court held they offered “no clear explanation for these calculations and cite to no clear authority to support their use.”  The Court noted they failed to refute the City calculations and omitted “broad swaths of the compensation they actually received.”  The court held that their calculations contained multiple mathematical errors further undermining their credibility.  

Ultimately, the court held that the firefighters failed to identify any disputed material fact with regard to their claim that the City took an improper FLSA credit or under payment of FLSA overtime.  Often FLSA ligation focuses on damages and contractual overtime credit calculations, rather than whether a particular item of compensation must be included in the Regular Rate of Pay. This case demonstrates the importance of marshaling reliable evidence of FLSA under payments and the proper calculation of credits claimed by the employing agency.