Back Pay Can Include Overtime

Written on 01/05/2023
LRIS

In 2020, the North Carolina De­partment of Public Safety terminated Christopher Stockli’s employment at the Pasquotank Correctional Institu­tion. Stockli challenged his termination through a contested case in North Caro­lina’s Office of Administrative Hearings. An administrative law judge entered a final decision reinstating Stockli and awarding him back pay. That back pay award included his salary for regular working days and back pay for two days of mandatory overtime that Stockli tes­tified he was required to work because of staffing shortages at the correctional institution.

The Department challenged the ALJ’s final decision, alleging that the ALJ only had authority to award back pay based on Stockli’s regular salary and that overtime pay should not be includ­ed in the calculation of an employee’s regular salary.

The North Carolina Court of Ap­peals upheld the ALJ’s decision. The Court found that “by statute, when an ALJ determines that a state agency lacked just cause to terminate an employee, the ALJ may provide several forms of relief to the employee including ‘payment for any loss of salary’ resulting from the improper termination. The State’s regulations authorize ALJs to include in a back pay calculation ‘any across-the-board compensation that would have been included in the grievant’s regular salary except for the interruption in employment.’

“The term ‘salary’ is undefined in the statute and corresponding regulation. The parties acknowledge that, because the word ‘salary’ is undefined, it should be given its ordinary meaning in English usage. In ordinary English usage, salary generally means ‘fixed compensation paid regularly for services.’

“At the hearing, Stockli testified that he worked 14 days each month at his regular pay scale and worked overtime. Some of that overtime was voluntary, Stockli testified, but two to three days each month was ‘mandatory overtime’ that he was required to work because the correctional institution was ‘shorthanded.’

“The Department argues that the only evidence in the record of any allegedly mandatory overtime is Stock­li’s own ‘self-serving testimony.’ But self-serving or not, Stockli’s testimony is unrebutted, sworn testimony. If the Department believed Stockli’s testimo­ny about his ‘mandatory overtime’ was incorrect, it could have presented its own counterevidence. The Department did not do so.

“The ALJ chose to credit Stockli’s undisputed testimony about his manda­tory overtime. Based on this competent evidence, the ALJ properly determined that Stockli’s ‘fixed compensation paid regularly’ for his work included both his normal work schedule and two days of mandatory overtime work per month that was necessary because Stockli’s employer was understaffed. The ALJ therefore included two overtime days in the calculation for Stockli’s ‘regular salary.’ This is consistent with both the applicable statute and accompanying regulations.”

Stockli v. North Carolina Department of Public Safety, 2022 WL 16937444 (N.C. App. 2022).

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