This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

CONSTITUTIONAL LAW -- Gifts and Loans (authority to pay overtime compensation in excess of Fair Labor Standards Act minimum requirements)
PUBLIC OFFICERS AND EMPLOYEES -- Compensation (overtime pay in excess of Fair Labor Standards Act minimum requirements) -- Overtime (pay in excess of Fair Labor Standards Act minimum requirements)

GENERAL MUNICIPAL LAW §90; 29 USC §201 et seq.; NY CONST, ART. VIII, §1: A village board may authorize overtime payments at reasonable rates of pay in excess of the minimum payment requirements of the federal Fair Labor Standards Act. The payments must be made pursuant to a pre-existing, detailed overtime plan adopted by the village board that sets forth the terms, conditions and remuneration to be paid.

You ask whether a village, pursuant to General Municipal Law §90, may pay an individual who is subject to the maximum hour/minimum overtime wage provisions of the federal Fair Labor Standards Act ("FLSA"; 29 USC §201 et seq.) at a rate higher than that provided for in the FLSA, without running afoul of the gift and loan prohibition of article VIII, §1 of the State Constitution. For purposes of this opinion, we assume the individual in question is not governed by a collective bargaining agreement.

General Municipal Law §90 authorizes the governing board of each municipal corporation, by ordinance, local law, resolution, order or rule, to provide for the payment of overtime compensation to any or all public officers and employees, except elective officers and those officers otherwise excluded by law, for all time such officers and employees are required to work in excess of their regularly established hours of employment. Under section 90, overtime may be at the basic pay rate "or at such other rate as [the] governing board … may authorize."

Article VIII, §1 of the State Constitution prohibits gifts and loans by municipal corporations to or in aid of any private individual. In view of this constitutional provision, it has been held that a local government may not provide overtime compensation pursuant to section 90 in the absence of a pre-existing plan setting forth in detail the terms, conditions and remuneration for the overtime work (Murray v Levitt, 47 AD2d 267, 366 NYS2d 674 app den 37 NY2d 707, 375 NYS2d 1026).

The FLSA establishes, inter alia, minimum requirements for certain employees who are subject to that Act both for payment of overtime and for compensatory time off for a workweek longer than that prescribed in the federal statute (29 USC §207[a],[o]). Because it is now well-established that the FLSA applies generally to State and local governments (Garcia v San Antonio MTA, 469 US 528, 105 S Ct 1005, 83 L Ed2d 1016), New York State law applies in this area only to the extent not inconsistent with the FLSA (1990 Opns St Comp No. 90-11, p 26). Thus, we have expressed the opinion that if the overtime provisions of the FLSA are applicable to an individual, the individual is entitled to overtime compensation as provided in the FLSA even though the municipality has not implemented an overtime program as authorized by General Municipal Law §90 (id.).

As noted, however, the FLSA sets forth only minimum overtime compensation requirements. It has been held that they are not intended to preclude states and local governments from providing greater compensation (see, e.g., Mitchell v Adams, 230 F 2d 527, 530). Therefore, since General Municipal Law §90 permits local governments to provide overtime "at such … rate as the governing board … may authorize", it is our opinion that a village board may authorize overtime payments at reasonable rates of pay in excess of the minimum payment requirements of the FLSA. In our opinion, the mere fact that the amount paid is in excess of the minimum requirements of the FLSA would not result in a gift in violation of article VIII, §1, since the payment would constitute lawful compensation, pursuant to statutory authority, for services rendered (see, e.g., Local 456 v Town of Cortlandt, 68 Misc 2d 645, 327 NYS2d 143; Piro v Bowen, 76 AD2d 392, 430 NYS2d 847, lv den 52 NY2d 702, 437 NYS2d 1025; cf. People v Murphy, 235 AD2d 554, 652 NYS2d 754). In order to avoid contravening article VIII, §1, however, the payments, as noted, must be made pursuant to a pre-existing, detailed overtime plan adopted by the village board that sets forth the terms, conditions and remuneration to be paid (Murray, supra).¹

January 29, 2001
John S. Edwards, Esq., Village Attorney
Village of West Haverstraw

¹  Note that the plan also must be in compliance with constitutional equal protection guarantees (NY Const, art. I, §11; see, e.g., Gruen v County of Suffolk, 187 AD2d 560, 590 NYS2d 217).