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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6430 April 14, 1987 MINIMUM WAGES: STATE: State obligation to reimburse local units of government for overtime pay for employees in fire protection activities Obligation to reimburse local units of government for overtime pay for fire protection personnel The obligation of the state to reimburse local units of government for overtime pay for persons employed in fire protection activities as mandated by MCL 408.384a; MSA 17.255(4a), is unaffected by the decision of the United States Supreme Court in Garcia v San Antonio Metropolitan Transit Authority, 469 US 528; 105 S Ct 1005; 83 L Ed 2d 1016 (1985). Robert H. Naftaly Director Department of Management and Budget Lewis Cass Building Lansing, Michigan You have requested my opinion regarding the application of the decision of the United States Supreme Court in Garcia v San Antonio Metropolitan Transit Authority, 469 US 528; 105 S Ct 1005; 83 L Ed 2d 1016 (1985). Your question is: Does the Garcia decision relieve the State from having to reimburse local governments for firefighter overtime costs incurred pursuant to the Michigan Minimum Wage Law? In Garcia, the Court ruled that the minimum wage and overtime provisions of the Fair Labor Standards Act, 29 USC 206 and 207, were enforceable against the San Antonio Metropolitan Transit Authority. The Court expressly overruled the decision in National League of Cities v Usery, 426 US 833; 96 S Ct 2465; 49 L Ed 2d 245 (1976), which had held that Congress was without authority under the Commerce Clause, US Const, art I, Sec. 8, to subject the states and local units of government to the minimum wage and overtime provisions of the Fair Labor Standards Act, 29 USC 206 and 207. The Minimum Wage Law of 1964, as amended by 1978 PA 604, MCL 408.384a; MSA 17.255(4a) provides, in part: "(1) Except as otherwise provided in this section, an employee shall receive compensation at not less than 1 1/2 times the regular rate at which the employee is employed for employment in a workweek in excess of 40 hours. "(2)(a) In a work period of 28 consecutive days, the employee receives for tours of duty, which in the aggregate exceed 216 hours at a rate not less than 1 1/2 times the regular rate at which the employee is employed, which rate shall be not less than the statutory minimum hourly rate. "(7) The legislature shall annually appropriate from the general fund to each political subdivision affected by subsection (2) an amount equal to the difference in direct labor costs before and after the effective date of subsection (2) which arises from any change in existing law resulting from the enactment of subsection (2) and incurred by each such political subdivision." Prior to the amendment of MCL 408.384a; MSA 17.255(4a), local units of government were not required to pay overtime to firefighters, nor was the state required to reimburse local governments for overtime payments made to firefighters. It has been held that MCL 408.384a; MSA 17.255(4a), as amended, requires the state to reimburse local units of government fully for overtime compensation paid to their firefighters. Adrian v State of Michigan, 420 Mich 554; 362 NW2d 708 (1984). As a result of the Garcia decision, local units of government are required to pay overtime to firefighters by both the Fair Labor Standards Act and by MCL 408.384a; MSA 17.255(4a). The implication in your question is whether the decision in Garcia applying the Fair Labor Standards Act requirement to pay overtime serves to relieve the state of its obligation to reimburse local governmental units. The United States Supreme Court has held that Congress, by enacting the Fair Labor Standards Act, has left a domain for state regulation. Mitchell v HB Zachry, Co, 362 US 310; 80 S Ct 739; 4 L Ed 2d 753 (1960). The general rule regarding federal preemption in labor law is that a state may regulate conduct that is of only peripheral concern in the congressional enactment or which is so deeply rooted in local law that the courts should not assume that Congress intended to preempt the application of state law. San Diego Building Trades Council v Garmon, 359 US 236; 79 S Ct 773; 3 L Ed 2d (1959). The reimbursement requirement mandated by the Legislature in MCL 408.384a; MSA 17255(4a) is, at best, of only peripheral concern to the purposes of the Fair Labor Standards Act. While Congress was concerned that workers receive overtime compensation, it has no interest in the ultimate source of that compensation. Further, nothing is so traditionally deeply rooted in local law as is the right of the state to choose to reimburse local governmental expenditures. MCL 408.384a; MSA 17.255(4a) remains the law of the state. The decision of the Court in Garcia, supra, does not affect the continued validity of this statute. It is, my opinion, therefore, that the decision in Garcia v San Antonio Metropolitan Transit Authority does not relieve the state of the obligation set forth in MCL 408.384a; MSA 17.255(4a), to reimburse local units of government for overtime compensation mandated by the Legislature to be paid to firefighters. Frank J. Kelley Attorney General
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