Working Overtime

A rash of recent lawsuits related to overtime pay has left many high schools rethinking who they will allow to coach their teams this fall.

By Laura Smith

Laura Smith is an Assistant Editor at Athletic Management.

Athletic Management, 16.5, August/September 2004, http://www.momentummedia.com/articles/am/am1605/overtime.htm

In April, Joe Howard went into his superintendent’s office and received the surprise of his career. By the time he left the meeting, the Akron (Ohio) City Schools Program Manager for Athletics had lost 25 coaches, one site manager, one assistant athletic director, and 45 other individuals he had relied on to perform various functions in the athletic department.

Effective July 1, the Akron School Board and administration decided that those employees classified as support staff—teachers’ aides, custodians, food service workers, secretaries, and others—would no longer be awarded coaching contracts or other athletic responsibilities within the school. Akron set the new policy to protect itself from litigation under the Fair Labor Standards Act (FLSA), a federal law requiring that non-professional employees must be paid overtime if they work more than 40 hours per week.

Akron had good reason to be concerned about FLSA violations. Since 1998, approximately 250 school districts in 10 states have faced lawsuits, paying out millions of dollars in unpaid overtime and penalties. Many of Akron’s athletic department staff were full-time non-professional school employees, leaving the district wide open to suits, since any hours they worked in their athletics roles could be seen as overtime. Watching the litigation spread, Akron began rethinking practices and rewriting policies that have been in place for decades with the hope that their school won’t be the next one in court.

Other districts have made the same decision, and the policy change has not been an easy one. Coaches with years of experience are forced to tell their teams they won’t be returning. “I told my team last Friday after our track meet … I broke down in tears trying to tell them,” Rick Englehart, an Akron teachers’ aide and multi-sport coach, told the local Akron Beacon Journal. “And they broke down in tears trying to listen and understand.”

“It wasn’t something we wanted to do,” says Howard. “It’s been terrible. But our legal advisor couldn’t find any other way out of the liability we were facing. We felt this was the only choice we could make.”

School district employees, professional and non-professional, have a long history of wearing multiple hats. The library aide who doubles as assistant swim coach, the secretary who handles ticket sales at basketball games, and the custodian who helps handle game operations are all vital to the day-to-day operations of high school athletic departments. However, if these employees are exceeding 40 hours per week when their regular jobs are combined with hours spent in athletics, and if they are not being paid overtime for their work, chances are the school is violating the law.

OLD LAW, NEW RISKS
While the rash of lawsuits against schools for unpaid overtime is a new phenomenon, it’s actually not the result of any change in the law. In its roughly 65-year history, the Fair Labor Standards Act has changed very little. The suits are largely a result of one southern law firm’s aggressive focus on the issue. The School Litigation Group (SLG), based in Jackson, Miss., has represented the plaintiffs in nearly every FLSA case against a school district, beginning in Mississippi and moving into Alabama, Arkansas, Florida, Georgia, Louisiana, Oklahoma, South Carolina, Tennessee, and Virginia.

“The School Litigation Group will target a particular state and begin to advertise aggressively there,” explains Patrick Schmitz, Deputy Director of Legal Services for the Ohio School Boards Association. “They mail postcards to school employees inviting them to join a class action lawsuit if they think the school may owe them unpaid overtime. All the employee has to do is check a box and drop it in the mail. They don’t even have to put a stamp on it. Most people see it as an offer of free money, and human nature being what it is, many of them are going to respond. A lot of these employees don’t have any particular ax to grind with their districts. They just kind of get lured in.” Coaches are specifically targeted in SLG advertisements.

If a district is successfully sued for unpaid overtime, the employee can collect back wages for up to two years. If the court determines that the school was willful in its failure to pay, the number becomes three years. In addition, courts generally award liquidated damages equal to double the amount of unpaid overtime, and the district is liable for the plaintiff’s attorney’s fees.

Some school districts, particularly in and around the southern states’ cradle of litigation, have adjusted their policies to avoid liability. Many others, however, continue to employ non-professional staff members as coaches. The reason, educators say, is that schools have not traditionally thought of the FLSA as applying to them.

“Schools have had people in dual roles for a long time, and we’ve never calculated their hours or paid overtime. This is just the way things have always been done,” says Lynn Smith, Superintendent of the Brewton (Ala.) City School District. Before a recent policy change, Brewton made extensive use of its non-professional staff for coaching roles. “This is my 13th year as a superintendent, and I had never thought about wage and hour laws until last year. I just didn’t know that we were impacted by it.”

“The FLSA was never an issue for school districts before because nobody had ever sued before,” says Stephen DeVita, General Counsel for Akron City Schools. “Schools were just going along thinking everything was okay, but it’s turning out to be very not okay.”

“It’s difficult to say how many schools are still violating the law,” says Lisa Soronen, Staff Attorney for the National School Boards Association. “Some have fixed their policies. Others have told their lawyers they’ll fix their policies and then gone back to doing it the old way. And many others haven’t addressed the issue yet at all. Some athletic departments have put off dealing with the issue, because telling willing, eager employees, ‘You can’t coach or help out in athletics’ can be a very tough stance to take.”

However, “business as usual” can be a risky proposition for schools employing support staff as coaches. “The choices school districts have to make about this issue are tough, but the worst choice is to ignore the issue,” says Schmitz.

“Lawsuits under the FLSA are real and they’re potentially coming to your area,” agrees Allison Schafer, Legal Counsel and Director of Policy for the North Carolina School Boards Association. “Districts must wake up and make sure they’re complying with the law.”

WHO IS EXEMPT?
The first step to making sure your department is complying with the Fair Labor Standards Act is understanding the law. The FLSA requires employers to pay workers a minimum wage and to pay them time-and-a-half if they work more than 40 hours in a seven-day period. All employees must be paid overtime unless they qualify for one of three exemptions: executive, administrative, or professional.

Superintendents and assistant superintendents fall under the executive exemption, and principals and assistant principals fall under the administrative exemption. Teachers are exempted under the law’s professional exemption, defined as an employee whose work requires advanced knowledge and a long course of specialized study. School psychologists, nurses who possess an R.N. degree, counselors, and accountants also fall under this exemption.

Nonexempt employees, who must be paid overtime, include secretaries, receptionists, teachers’ aides, custodians, food service workers, media assistants, as well as before-and after-school workers. These workers tend not to have a specialized degree.

In order to determine which of its staff members were exempt, Akron took a systematic approach. “First we identified all the teachers and set their names aside, because they are exempt,” DeVita says. “Then we looked at all the non-teachers. We considered on a case by case basis what each of their primary jobs are—a secretary, a custodian, a night watchman, a teachers’ aide. In most cases, it was very easy to see who did not fit into any of the exemptions. These were the people we decided to no longer employ in athletics, because when we looked at the stipends they were getting, they were nowhere near enough to cover overtime pay.”

In some cases, however, determining which employees are subject to overtime laws is more difficult than it sounds, as Smith discovered when he began the process of reviewing Brewton’s policy. “For example, our technology coordinator was a very tough call,” he says. “His job requires specialized knowledge, but he doesn’t possess a specialized degree. In the end, to be on the safe side, we decided he’s nonexempt. It was difficult, because he has always been paid to run the clock at basketball games, and it was something he loved doing, but I had to tell him he couldn’t do it anymore.”

Schools often view their support personnel as “salaried,” since they don’t punch a time clock and their hourly pay is not calculated each pay period. But it’s critical to understand that even if an employee is paid a weekly salary, they may still be nonexempt and eligible for overtime.

“It makes no difference whatsoever whether the school pays an employee a salary or pays them by the hour,” says Sam Brand, an attorney with the School Litigation Group who has represented plaintiffs in a large number of suits against schools. “If they work overtime, and they are not exempt under one of the three exemptions, they have to be paid time and a half for hours over 40.”

“If you have any question as to an employee’s status, the best place to turn is the Department of Labor representative in your state,” Schafer advises. “Each situation can be a little bit different, and they are your best resource for sorting out the answers.”

COUNTING HOURS
When sizing up your athletic department’s level of compliance with FLSA, it’s important to look at both your coaching staff and those who play other supporting roles. Nonexempt staff who serve as coaches or assistant coaches usually create the greatest liability.

“We call coaching an ‘easy loser’ for a school district,” Soronen says. “If a nonexempt employee works at a full-time job in the district and has a coaching job on the side, you know for sure that they worked more than 40 hours a week. And it’s probably a lot more. It’s not just the time that they spend at games, or travelling to games, or at practices. Things like reviewing tapes and counseling players can add up to a huge amount of time. The liability for a coach can turn into thousands and thousands of dollars.”

In addition, if an employee sues for unpaid overtime, it’s not up to him or her to prove that they worked the hours. It’s up to the district to prove that the employee did not work the hours he or she claims. “With a job like coaching, disproving the number of hours claimed is going to be virtually impossible to do,” Soronen says.

You also need to count the hours of nonexempt employees who work as ticket takers, timers, and security personnel at games. At Brewton, Smith also found that nonexempt employees were going into overtime when they worked as parking lot attendants or cleaned up after home football and basketball games. “We paid them, but not at an overtime rate,” Smith says. “So we had to change our policy.”

Even tasks like accounting for game receipts and depositing them in the bank are potential potholes, according to James “Spud” Seale, an attorney with the Montgomery-based law firm Hill, Hill, Carter, Franco, Cole & Black, P.C., who has defended schools in 40 FLSA cases against the School Litigation Group. “If the athletic director’s secretary does that one task every week and goes over 40 hours, he or she needs to be paid overtime,” Seale says.

Bus drivers who help transport teams to away games also need to be considered. “If a bus driver drives 35 hours a week doing regular bus runs, and then also drives to away games, he or she will probably go over 40 hours,” Schmitz says. “Providing a ‘game stipend’ to bus drivers is not a solution. It’s a very dangerous thing to do. Bus drivers are nonexempt, so their hours need to be calculated as overtime.”

TOUGH CHOICES
Once an athletic department identifies staff members who should be receiving overtime pay, it needs to carefully consider its options. One option schools absolutely do not have is allowing nonexempt employees to waive their right to overtime pay—something coaches will often offer to do.

“When we announced our policy change, I had several coaches say to me, ‘Joe, just let me sign something that says I don’t want overtime. I don’t care about the money,’” Howard says. “I had to tell them that the law doesn’t permit it.”

The reason, according to Schmitz, is that an employee cannot legally sign away his or her FLSA rights. “Anything an employee signed would not be binding,” he says. “The employee could come back any time in the next two years and say they had decided they wanted to exercise their rights, and the district would be liable.”

It is theoretically possible to continue employing the nonexempt workers, figuring out a system to track their hours and paying the overtime cost, but it can be a daunting task with several hazards. “If a district decides to have nonexempt people coaching, they really need to institute a very accurate record keeping system,” Seale says. “Coaches would have to write down every hour that they spent on coaching duties and what they were doing: ‘This is when I got to practice, this is when I left. I spent an hour sitting at home planning for our game. I spent half an hour talking to a player about a problem he’s having.’

“Just writing down the same hours every week as a token gesture is not good enough,” he continues. “The Department of Labor says that if they see timesheets that say, ‘3pm to 6pm’ every day, it raises an immediate red flag. The timesheet has to reflect exactly what the coach actually did.”

Another hurdle is calculating each employee’s overtime rate. Nonexempt employees with two jobs (a teacher’s aide who coaches, for example) are paid at a “blended” overtime rate that takes into account the salaries at each job and how many hours are spent at each job, and then uses a weighted average.

“Let’s say an employee works 60 percent of their total hours as a teacher’s aide for $10 an hour and 40 percent of their hours as a head coach at $5.15 an hour,” Seale explains. “To get the blended rate, you multiply 60 percent times $10 and get $6. Then you multiply 40 percent times $5.15 and get $2.06. Add those together, and the blended rate is $8.06 an hour. To get the overtime rate, take time and a half of that: $12.09 an hour.”

As if that’s not complicated enough, each coach’s blended overtime rate would need to be recalculated every week, since few coaches work exactly the same number of hours each week. “When we talked to our payroll department about keeping our nonexempt coaches and calculating their overtime, they told us the calculation process would be mind-boggling,” Howard says. “We would have had to hire someone just to compute everything on an hourly basis on every payroll. It would cost us more than we could afford just to do that.”

For most athletic departments, paying a coach time and a half is simply cost-prohibitive. “Our nonexempt employees typically make between $8 and $12 an hour,” Smith says. “When you look at paying that in addition to an overtime rate for the hours they would be coaching, it can easily end up doubling the normal coaching stipend.”

“And then you would have teacher-coaches and teacher’s aide-coaches getting very different compensation,” DeVita adds. “Assistant coaches might be making more than head coaches—or even athletic directors. That was one of the big concerns that influenced our decision not to hire nonexempt coaches.”

One compromise, Schafer says, is to limit the hours nonexempt coaches are allowed to put in to control costs. “You would tell them, ‘You can work as an assistant coach for 10 hours a week, and then you have to go home, even if practice isn’t over,’” she explains.

However, districts have to be extremely careful if they go this route, since the law holds the employer liable for overtime. “You can have a strict policy that a coach can only put in 10 hours a week, but if they put in 20, you still have to pay them,” Seale says. “And if your district ends up in court, you will have to pay them.”

For nonexempt employees who occasionally take tickets and operate scoreboards, tracking hours is often manageable. For those employees, Smith says the Brewton district wrote a policy that requires them to take “release time” during their regular workday when they help out with an athletic event. “If a janitor is going to park cars and provide security for five hours at a football game, we make sure he takes five hours off from his regular job during that same week,” Smith explains. “We haven’t had any objections to that policy.”

When athletic departments opt not to employ nonexempt staff, filling the gaps means looking harder for coaches among teachers and other exempt school employees. Another option is to hire people who work outside of the school district. There is no risk of running afoul of the FLSA when athletic department workers’ regular jobs are in a neighboring school district, for example.

BOTTOM LINE
“We advise our schools’ athletic departments to sit down and really weigh how critical nonexempt staff are to their operations,” Schmitz says. “If they can operate without them, as tough as it is, we advise them to do that. If they decide that they are essential to their department, they have to be extremely meticulous about how they calculate and document their pay.”

And if an athletic department chooses not to employ nonexempt workers, communicating the news should be done with care. Once Akron made the decision not to employ nonexempt workers, Howard talked to staff members one-on-one or in small group meetings and provided plenty of time for the employees to ask questions and vent their frustration.

“I had two custodians who have worked for seven years as track timers,” says Howard. “They were extremely upset, so I decided to talk with each of them individually so that they knew how much I appreciated their years of dedication and that I understood their frustration. I told them, ‘I don’t like this any better than you do, but this is the law and I have to go by it.’”

RESOURCES:
• The National School Boards Association can be found online at www.nsba.org/site/index.asp.
• The North Carolina School Boards Association makes a variety of materials on the FLSA available at www.ncsba.org/flsa.htm.
• Compliance assistance is also available from the U.S. Department of Labor at www.dol.gov/dol/compliance/comp-flsa.htm.
• The School Litigation Group can be found online at www.slgcentral.com/.


sidebar:
CAN COACHES VOLUNTEER?
The Fair Labor Standards Act (FLSA) is very clear that nonexempt employees cannot waive their right to receive overtime pay—if they take on a paid position, and they work more than 40 hours a week, they must be paid time-and-a-half. But what if an employee wants to volunteer to do the job for no money at all? The question has stumped administrators, attorneys, and seemingly the U.S. Department of Labor itself, since state offices of the DOL have issued varying opinions.

There is a provision in the law that allows for volunteering, but it comes with a restriction: An employee cannot volunteer to do a job that is too similar to the job they are paid to do. The caveat is designed to protect workers from being subtly pressured to “volunteer” to work extra hours in their normal roles for free by employers who want to avoid paying overtime.

When it comes to nonexempt school employees who want to volunteer to coach or help out at games, it’s pretty clear to administrators that they are in no danger of being exploited. But the law still applies to them, and that’s where the confusion begins.

“Some states have said that no one can volunteer. Others have said that food service people can volunteer to coach, but teachers’ aides can’t, because teaching is too similar to coaching,” says Lisa Soronen, Staff Attorney for the National School Boards Association. The ambiguity has left some districts scrambling to decide which jobs are similar to which volunteer tasks: Can a food service worker volunteer to cook for a team banquet? Can the school bookkeeper volunteer to tally up the gate receipts?

For many, the questions have led to a “better safe than sorry” policy—no one is allowed to volunteer at all. “We just don’t allow it,” says Lynn Smith, Superintendent of the Brewton (Ala.) City School District. “People tell us all the time, ‘I don’t want the money. I just want to help out.’ And we have to say, ‘We’re sorry. You can’t.’ It’s very hard to turn them away, but we feel that it’s too much of a gray area to risk it.”

Since this hardly seems in the spirit of the law, a group spearheaded by Allison Schafer, the North Carolina School Boards Association’s Legal Counsel and Director of Policy, and backed up by members of Congress, asked the DOL to clarify the situation. Among other things, the request specifically asks the DOL to clear up whether teachers’ aides can volunteer to coach.

The DOL has not issued a response yet, but they expect to do so very soon, perhaps within the next few weeks. When the ruling is issued, the National School Boards Association will help disseminate its contents to individual schools, Schafer says. Administrators can also contact their state school boards association to keep tabs on the issue.

Until the ruling occurs, Schafer urges caution when using volunteers. It’s crucial to obtain the employee’s written confirmation that they are a “true volunteer,” she says. The NCSBA has developed a volunteer form, available on their Web site (see "Resources, above).

In addition, while the U.S. DOL ruling should clear up volunteering questions under federal law, each state has its own department of labor, which may have different regulations. “Under the FLSA, a state cannot make rules about volunteering that are less protective of workers, but it can make rules that are more protective,” explains Al Robinson, Deputy Administrator for Policy with the DOL. “Each school needs to also check the regulations in its own state.”



Sidebar:
ATCs AND THE FLSA
On Aug. 24, some slight changes to the federal Fair Labor Standards Act (FLSA) will go into effect. For the most part, schools will not see much of a difference as a result of the new regulations, with one notable exception: certified athletic trainers. The new regulations specify that athletic trainers who have completed four years of study at a program accredited by the Commission on Accreditation of Allied Health Education Program and are certified by the National Athletic Trainers’ Association are not eligible for overtime pay.

The clarification follows several years of ambiguity, with athletic trainers in a handful of states suing districts for unpaid overtime with varying results, leaving the question of whether athletic trainers are exempt professionals somewhat up in the air. However, in 1999, a Texas court ruled that a group of San Antonio Independent School District athletic trainers were in fact exempt from overtime. The Supreme Court later refused to hear the case, allowing the decision to stand.

The Department of Labor relied on that court decision, along with the fact that athletic training is a specialized field requiring advanced education and utilizing extensive discretionary judgement, in setting the new regulation. Now, both college and high school certified athletic trainers are ineligible for overtime pay under the FLSA’s professional exemption.

A full list of the new regulations is available online at http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov
/2004/04-9016.htm.