Public employers often require employees to wear uniforms and the employers may reimburse employees to cover the cost of maintaining or replacing the uniforms. Some employers provide employees more than the cost of maintaining or replacing the uniform, either in an excess of caution or as a form of additional compensation. But providing uniform pay can have FLSA implications. Some types of uniform pay are considered mere reimbursements, but some types are considered compensation. Here are a few things you need to know about uniform pay.
1. Uniform pay may be excluded from the regular rate of pay.
The Fair Labor Standards Act excludes “reasonable payments” for certain expenses, including uniform reimbursement, from the regular rate of pay. Therefore, if an employer provides employees with a reasonable amount to reimburse employees for uniforms and related costs, the uniform pay payment may be excluded when calculating the FLSA regular rate of pay for overtime purposes.
2. Uniform pay should reflect the actual or reasonably approximate amount for maintenance of uniforms.
Uniform pay which reflects the actual or reasonably approximate amount for purchasing, laundering or repairing uniforms or special clothing an employer requires an employee to wear does not need to be included in the regular rate of pay. This type of uniform pay is considered a reimbursement.
3. Uniform pay in excess of the actual or reasonably approximate amount for maintenance of uniforms should be included in the regular rate of pay.
When employers pay an amount above what might be considered reasonable to maintain uniforms, that additional payment may be considered compensation for employees and required to be included in the regular rate of pay. An Illinois federal court recently addressed this precise issue in Caraballo v. City of Chicago (N.D. Ill. 2013) 969 F.Supp.2d 1008. A group of paramedics sued the City of Chicago for failing to include the $1250 the paramedics received annually as uniform pay in their regular rate of pay. The Court determined the City was entitled to exclude at least some of the uniform pay from the regular reimbursement because at least some of the uniform pay reimbursed the paramedics for maintaining and cleaning the uniforms. But the Court also determined that the City had not set forth evidence to show the amount of the uniform pay was the “actual or reasonably approximate amount” for maintaining the uniforms as intended.
If an agency reimburses employees for uniform pay with an amount in excess of what is reasonably needed to clean and maintain the uniform, the agency should include the excess amount in the regular rate of pay when calculating overtime pay for those employees. To determine the excess over a “reasonable amount,” employers should review and maintain records and evidence of the “reasonable amount,” such as receipts for cleaning the uniforms or purchasing new ones.