Sherborn Found in Violation of Fair Labor Standards Act

Note: The following is a press release from the Sherborn Board of Selectmen. To see the letter to the town from the U.S. Department of Labor click on the PDF and scroll down.

The town has received a letter from the United States stating in relevant part “the investigation disclosed violations of FLSA [Fair Labor Standards Act] section 6 resulting from your failure to pay employees at least the minimum wage for all hours worked and FLSA section 7 resulting from your failure to pay statutory overtime pay for hours worked in excess of 40 hours per workweek. These violations resulted in underpayments totaling $26,451.01 due to 15 employees. … No penalty is being assessed as a result of this investigation. If at any time in the future your firm is found to have violation the monetary provisions of the FLSA, it will be subject to such penalties.” The letter is hereby made public and is attached to this release.

The above findings represent category one of a number of possible expense the town must now face. Based legal advise, the BOS determined not to challenge this finding against the town. We as a town must proceed to pay this category of expenses totaling $26,451.01 by Oct. 19, 2011. The Fire Chief with the approval of the Board of Selectmen is to spend this amount now from his current appropriation, knowing the result will be that he will have insufficient funds to make payroll for the entire year. Instead, this is to let the citizens of the town know the plan to seek a supplemental appropriation at town meeting for the Fire Department budget.

In addition to the foregoing amounts to be paid, the Board of Selectmen have determined to make payments for the period of time from June 1 through August 31, 2011, a period of time after the period covered by the expenses in the FLSA letter. As the attached letter from the United States indicates, “you [the town of Sherborn] have agreed to fully comply with all the provisions of the FLSA in the future.” The same personnel policies were followed during this period of time as was followed during the earlier period of time and therefore should be treated in the same way. The town is proceeding to make those payments at this time, again drawing funds from the current FY 12 Fire Department payroll line item. The Town Treasurer reports that these additional expenses are as follows:

June                        727.40

July                      2,265.19

August                 1,174.07

An additional expense category is future payrolls for the balance of the fiscal year, i.e., the period Sept 1 through June 30, which will be addressed by paying additional FLSA wages each month from the Fire Department personnel appropriation line item at a new addition cost estimated to be $1,000.00 per month, or a total estimated amount of $10,000 to get to FY 12 year end on June 30th.

We have another category of expenses related to this investigation – record keeping requirements. Our personnel records and policies are to be modernized to keep more compliant records. At this time, new software to track necessary information has been authorized by the BOS, at the last BOS meeting, to be expended from the Fire Department expense budget in the amount of $3,750.00, representing one half the cost, as the Police Department will pick up the other half of the cost, making a total of $7,500.

As part of future compliance issues, there will be a need for additional BOS votes regarding establishment of workweeks as described in the letter below, and we have already appointed a new personnel board. The Fire Department is now operating under new management.

Therefore, the Fire Department budget will be drawn upon for additional payroll in the amount of $40,617.67 and expense line item in the amount of $3,750.00 (with $3,750 coming from other sources not needing replenishment) for which a supplemental appropriation will be sought at the annual town meeting so that the Fire Department can complete the year as needed to preserve the public safety of our residents. These numbers include estimates for the balance of fiscal year payroll costs, which may turn out to be more or less then current estimates.

To summarize in other words, $48,117.67 is being spent as a result of this FLSA matter; $44,367.67 supplemental appropriation appears necessary to be appropriated for the annual town meeting for operation of the Sherborn Fire Department.

Tom Twining

Chairman

Board of Selectmen

Voted unanimously to issue this Press Release on September 29, 2011