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FLSA Case Update -Grievance of the Parties

This page is intended to provide information on recent and upcoming events in the FLSA case. To understand the history, including a brief overview of the hearings already held in the FLSA case, please go to the FLSA History page. All FLSA pages reside within the Grievances tab. Click the Grievances tab (above) to go to the main grievances page where the FLSA section resides or click here to the FLSA main page > >


FLSA Status Report -- Updated March 7, 2008

March 7, 2008:

     On March 5, HUD, AFGE Council 222 and NFFE Local 1450 entered into an agreement to settle the Fair Labor Standards Act case.

     The settlement agreement covers three areas: Who will be covered by the FLSA in the future? What direction will be given to employees and supervisors about the FLSA? And what damages will employees receive for their misclassification?

Who will be covered by the FLSA?

     Thousands of bargaining unit employees will be converted to FLSA "non-exempt" status, meaning that they will be covered by the FLSA. In 2005, we had 5276 exempt and 1057 non-exempt employees, for a total bargaining unit of 6333. That translated to 83% exempt, and 17% covered by FLSA.

     Under this settlement agreement, we should have 1945 exempt and 4072 non-exempt, for a total unit of 6017, or 33% and 67%. Click here to go to the list of positions and grades that will be FLSA covered, in addition to ALL GS-10 and below positions.

     We would have liked to see more employees covered by the FLSA, in particular Legal Honors Interns and IT specialists. But the agency remained unswayed by our arguments. As with all settlements, there is compromise, and neither side is completely satisfied.

     HIHRTS will reflect your FLSA status. It will take a few months for the agency to completely correct their records, but please monitor your profile in HIHRTS to see if changes are made.

What direction will be given to employees and supervisors about the FLSA?

     The agency and the Unions reached agreement on a notice to be sent to employees and supervisors. The notice makes it clear that employees covered by the FLSA are legally entitled to choose between overtime pay and compensatory time. Further, it outlines when employees are entitled to overtime for travel.

     The notice also states:

All managers should closely monitor the work hours and workloads of their employees to ensure that every employee´s workload can be accomplished within a forty (40) hour workweek, . . . .

What damages will employees receive?

     The agreement covers two main types of damages−damages related to underpayment for approved overtime, and damages related to "suffer and permit" overtime. The Unions are responsible for administering a claims process. The Unions´ attorneys at Snider & Associates are administering the process on behalf of the Unions. The damages period is Fiscal Year 2001 through Fiscal Year 2007.

     With regard to damages related to underpayment for approved overtime, the agency has provided Snider & Associates (the Firm) with payroll records from FY01 through FY07. The Firm is reviewing the records to identify covered employees whose overtime rate of pay was erroneously capped. They are also calculating the difference between overtime pay and compensatory time received. A portion of the $24 million settlement will be used to pay a portion of these damages. Employees will not need to file a claim for these damages, since the Firm has all of the information necessary for the Unions to direct HUD to pay employees these damages.

     With regard to damages related to "suffer or permit" overtime, this concerns unpaid overtime where management knew, or should have known, the employee was working overtime. Hearings were held and evidence presented about such unpaid overtime for a few employees - GS-360 FHEO Investigators and employees at or below GS-10. The testimony was very powerful, and we believe that the hearings motivated Management to settle this action.

     The vast majority of employees, however, have not had an opportunity to submit claims for "suffer or permit" overtime. The Firm is creating a web-based claims process. Employees will be notified via HUD´s email system when the claims process is open. The notice is being sent to all employees, regardless of current FLSA or bargaining unit status, since it is possible that the employee was a member of the class between 2001 and 2007. Only covered employees will be eligible to submit a claim for "suffer or permit" overtime, however.

     Once notified, employees will be linked to the web site. They will be asked to provide their last name and last four digits of their social security number. With this information, the system will be able to determine if the employee is a class member, and for what years. If the employee is a class member (all bargaining unit employees who were or should have been covered by the FLSA during FY01-FY07), the system will provide the employee with his/her personalized claims form affidavit.

     The claims form affidavit will include definitions of "suffer and permit" overtime and "compensation." It will then ask the employee for each year if the employee worked uncompensated overtime, and provide four options, which are currently set at: 1-8 hours, 9-16 hours, 17-24 hours, or 25+ hours.

     AFGE Council 222 and NFFE 1450 kept the initial threshold very low (1-8 hours) because they want to maximize the number of employees who can benefit from this action. Employees should keep in mind that even if they only worked 15 minutes off the clock every pay period (or worked through lunch once a month), they would have worked 13 hours uncompensated overtime per year. As a general rule, AFGE Council 222 would not normally have made a claim over such small amounts of damages. But HUD refused to settle this case for almost five years, denying that any problem existed. After five years of battling this issue, we are encouraging employees to make even small claims.

     At the end of the claims form affidavit, employees will be asked to affirm that their claim "is true and correct to the best of my knowledge, recollection and belief." We recognize that memories grow foggy after so many years. But as the example above shows, it´s easy to rack up several hours of uncompensated overtime. And don´t forget the claims that started this entire case - uncompensated travel on weekends, and before and after the workday. If an employee had four management reviews a year that required travel to and from the site all in one day, the chances are good that the employee was uncompensated for an additional 8 to 16 hours per year.

     Furthermore, neither the Unions nor Management will investigate employee claims. Management will not provide your supervisors with copies of the claims, nor advise your supervisor that you are a claimant. Employees will be taken at their word. Only the Union retains the affidavit claims, although they must be preserved in case of an audit by an independent body.

     This action cost AFGE Council 222 more than $60,000 in transcript fees and other costs. To reestablish our ability to pursue future actions, we are asking claimants to consider assigning a portion of their claim to the Unions. This option will appear on the affidavit claim form. Whether you choose to make such a contribution or not will have no impact on the processing of your claim.

     The amount available for each claim will depend upon the number of claimants and the amount of their claims. The more claimants and the larger the claims, the less that will be available for each 1-8 hour increment claimed. Nonetheless, employees making claims should see a reasonable amount of compensation.

     The Firm and the Unions will transmit a list of employees and amounts to be paid to HUD. Former employees will receive payment from the NFC. Current employees will receive a portion of their claim from HUD´s accounting center in Ft. Worth (that portion known as "liquidated damages"), and the remainder from the NFC. For liquidated damages payments, employees will be responsible for all tax payments - federal, state and local - although no FICA is due for these damages.

How will the Unions recognize employees who have already testified?

     The settlement agreement does not directly address this issue, because the Unions are solely responsible for administering the claims process. But the Unions have agreed that employees who have already testified in this case need to be treated differently. For one, they and their claims have been scrutinized by Management, including their supervisors. Second, we believe that because of their willingness to step forward early and gather evidence to support their claims, Management was willing to settle the case.

     Witnesses will receive two times their underpayment for approved overtime damages and comp time damages, and five times their "suffer or permit" claims, up to the maximum claim they submitted as witnesses. Keep in mind that the claims affidavit form currently sets forth as a maximum 25+ hours per year. Some of our witnesses testified and provided evidence of hundreds of uncompensated overtime hours.

     This case would not have been possible without some key players:

Please look to our website for further information as it is available.

March 2007: The Council presses Management to agree to hearing dates for the damages hearings for GS-10 and below in all series. The Council has collected affidavits and data to support more than 100 claims to represent the class. No dates have been established.

Note: This case would not be possible but for the hard work and dedication of many people. If you are a claimant, thank you for your time and effort to gather the evidence to create a good claim. Thank you to the FLSA Stewards who are helping claimants gather evidence and present claims. Thanks especially to Snider & Associates, our attorneys in this case.

If your job series has not yet been considered for FLSA coverage and damages, please know that we continue to pursue a global settlement that will benefit all employees. Absent a global settlement, it may take years before we reach your series. Please continue to maintain evidence of your uncompensated overtime, including any evidence that Management knows of your working overtime (ie, email messages after hours to your supervisor, etc.). Claims go back to June 2000. Please keep your records!

In solidarity,

Carolyn Federoff
President, AFGE Council 222

The Council submits a counteroffer that totals approximately $40 million (in March, 2007).

February 2007: Management advises the Council of which GS-10s and below it will compensate pursuant to the December 2006 settlement. Of the 110 claimants, Management challenges only 9. Parties continue to work to reach agreement on the remaining 9. Compensation to other 101 should be received no later than April 23, 2007 payday.

The Parties submit their briefs regarding damages for GS-360 Fair Housing Investigators at grade 11 and above. Copy to be made available on our website.

The Council lobbies Congress regarding the need to resolve the FLSA case during the AFGE National Legislative Conference. For a copy of the FLSA issue paper, go to and scroll down to 2007 Council 222 Issue Papers, "Failure to Implement the Fair Labor Standards Act."

January 2007: Management offers a settlement that maintains the $10 million for damages, includes an amount for attorneys fees, and sets aside additional funds to increase performance awards (to 3% for outstanding), and to increase the amounts set aside for transit, child-care and student loan subsidies. The settlement would require that employees submit claims for damages within 90 days, and that Management would be able to deny claims. The settlement continues to cover fewer employees than would be covered by the internal audit conducted by the Office of Administration in December 2005. The Council Executive Board rejects the settlement offer. Again, the amount doesn't take into account sufficient damages. Additionally, the claims process (involving more than 4000 employees) is unworkable in such a short amount of time, and the Council is concerned about the intimation that congressionally sanctioned programs such as child-care subsidies are being held hostage to the FLSA case. Management objects to this characterization.