Section 207(o) of the Fair Labor Standards Act sets a series of rules as to when compensatory time off is a legal substitute for cash compensation for overtime. Among the requirements of Section 7(o) is that if the employees have a collective bargaining representative, there must be an agreement between the union and the employer to use compensatory time off.
Since Section 7(o) was adopted in 1985, there has been debate as to whether the requisite agreement to use comp time could be produced by the award of an arbitrator. Put another way, if an arbitrator’s opinion is imposed upon both parties, can it be said that there is a voluntary “agreement” to use comp time?
An administrative law judge for New York’s Public Employment Relations Board (PERB) recently answered the question “no.” The case involved police officers working for the Village of Muttontown. In 2013, the officers began to be represented by the Muttontown Police Benevolent Association (PBA).
The City and the PBA met in 2013 and 2014 to negotiate an initial collective bargaining agreement. In January 2015, the PBA declared impasse and sought binding arbitration. As the parties headed to arbitration, PERB was required to decide whether the Village’s proposal for comp time was mandatorily negotiable.
The Village’s somewhat complicated proposal read: “For hours actually worked beyond those scheduled for a given ‘7(k)’ work cycle (the Village may unilaterally set and from time to time change the ‘7(k)’ schedule), the Village may elect to compensate the employee with compensatory time on a time and one half basis, to be used (the scheduling of which shall not unduly disrupt the operations of the Department as determined by the Chief) within one calendar year of earning same.”
PERB’s Administrative Law Judge found that “although the subject matter of the payment of overtime by means of compensatory time off is generally mandatorily negotiable, the Village’s proposal is not because it would give the Village the right to elect whether to compensate unit employees for overtime worked with compensatory time off in lieu of payment in a manner that is contrary to that required by the FLSA. Section 7(o) allows an employer to use compensatory time off to pay represented law enforcement personnel for overtime worked in lieu of payment ‘only’ pursuant to ‘applicable provisions of a collective bargaining agreement, memorandum of understanding, or any other agreement between the public agency and representatives of such employees.’ Since there is no agreement between the parties that allows the Village to compensate officers with time off for overtime worked, the demand contravenes the provisions of the FLSA. The foregoing is consistent with PERB’s prior decision holding that an agreement must be reached in order for the employer to be able to make that type of election and that neither the filing for interest arbitration nor the issuance of an interest arbitration award satisfy that statutory requirement.”
Muttontown Police Benevolent Association, 49 PERB ¶ 4520 (N.Y. PERB ALJ 2016).