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HomeMy WebLinkAboutAgenda Statement 1985/08/06 Item 16 COUNCIL AGENDA STATEMENT Item 16 Meeting Date 8/6/85 ITEM TITLE: Resolution /2/ /- Supporting SB 1434 (Pete Wilson) Excluding City Employees from the Provisions of the Fair Labor Standards Act i SUBMITTED BY: City Attorney n'{ (4/5ths Vote: Yes No X ) This resolution expresses the Council's support for SB 1434 (Wilson) exempting local government from the Fair Labor Standards Act. RECOMMENDATION: Adopt the resolution BOARDS/COMMISSIONS RECOMMENDATION: N/A DISCUSSION: In February, the United States Supreme Court decided the case of Garcia v. San Antonio Metropolitan Transit Authority, a 5-4 decision. This case overruled the previous case of Usery v. National League of Cities which had exempted local government employees from the provisions of the Fair Labor Standards Act. The Garcia case has produced a financial crisis for state and local governments across the country. It is estimated that it will initially cost local government $3 billion or more with the estimated cost in California at approximately $350 million. The major impact of the decision affects firefighters and police officers. Senator Wilson's bill would rectify the problem caused by the Supreme Court ruling by exempting local government employees from the provisions of the Fair Labor Standards Act. FISCAL IMPACT: N/A 0651a b y t'�� C i L y c . -U of Chula Vida, C2Jfornia Dated :1-1`cF-� _ __ _ __ „ ,_. ___, t Cit of Chula Vista Cali f ornia CE OF THE MAYOR I / Gregory R. Cox August 28, 1985 The Supreme Court's recent decision regulating the application of Fair Labor Standards Act (FLSA) to City governments will create a significant financial burden for local governments. In an effort to support counteracting legislation, the City of Chula Vista adopted the attached resolution supporting Senate Bill 1434 (Pete Wilson) which excludes City employees from the provisions of the FLSA. The City of Chula Vista requests that you oppose the application of FLSA to cities and support Senate Bill 1434. The magnitude of the financial burden that FLSA will place on local government is still to be determined and is dependent upon final interpretation by the Department of Labor. However, it is estimated that the first year financial impact on California governments will range from a low of $350 million to a high of $1.5 billion'. These estimates reflect solely overtime compensation required by FLSA and do not include other costs that may be required to achieve compliance. In addition to the above noted costs, there are several other factors that cannot be quantified when calculating the cost impact of FLSA on cities. They include the ability of employers to negotiate decreased pay rates when coming into compliance with FLSA, the application of premium/shift differential pay for inclusion as part of overtime compensation as required by FLSA, the loss of compensatory time off to adjust for seasonal workloads and other purposes, the requirement to pay volunteer firefighters and police reserves, a minimum wage if they receive a stipend in excess of their actual expenses, the additional cost related to implementing new record keeping systems, the cost of legal counsel for advice on achieving compliance, the cost of retroactive payments that may be required, and court costs, legal costs and damages incurred from employee suits. CIVIC CENTER • 276 FOURTH AVENUE • CHULA VISTA,CALIFORNIA 92010 • TELEPHONE(619)691-5044 Page Two ► August 28, 1985 Fair Labor Standards Act As you can see, the application of the Fair Labor Standards Act upon City governments will dramatically impact many of the cost effective measures that they have implemented to insure an ongoing, high quality service to their citizens. On behalf of the City of Chula Vista, I again request that you join the City in its support of Senate Bill 1434. Very truly yours, Gregory R. Cox MAYOR cc: U. S. Conference of Mayors League of California Cities 'Public Management ( cc: President Ronald Reagan Vice President George Bush The Honorable Alan Cranston, U.S. Senator The Honorable Pete Wilson, U.S. Senator The Honorable Bill Lowery, Congressman, 41 District The Honorable Ron Packard, Congressman, 43rd District The Honorable Jim Bates, Congressman 44th District The Honorable Duncan Hunter, Congressman 45th District P. Guardacosta mailed the attached letter and Resolution No. 12121 to the above mailing list on August 29 , 1985 .