United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                  ___________

                                  No. 04-3985
                                  ___________

Chris N. Acton; Boyd J. Arends;          *
Chris N. Babich; Tim Bach; Greg          *
Bacon; Anthony Bannister; Arnold J.      *
Bazat; Alan Beard; Mark E. Blakemore; *
Bruce Britt; Mark Brunstrom; K. P.       *
Bullard; James E. Bullard; Eric T.       *
Caszatt; Brian Clifford; Justin M.       *
Collins; Daniel J. Comegys; Darrin W. *
Arends; Rusty Bradley; Ron Cook;         *
Frank Kirby Crow; Keith E. Dothage; *
Gary R. Drewing, II; Delwyn Duncan; *
Kyle Fansler; Kurt Fansler; Ron M.       *
Fisher; Travis Floyd; Steven D. Forrest; *
Brad Frazier; Scott D. Frew; Andrew      *   Appeal from the United States
Gray; Tracy Gray; George F. Gregory; *       District Court for the
David Hanks; Eric D. Hartman; Aaron *        Western District of Missouri.
Hasheider; Antonio Hickam; John R.       *
Hiley; Michael Holz; Cameron House; *
Greg Hrdina; Matt Hudson; Billy Hurt; *
John Igleheart; Robert Joseph Innes;     *
James Jones; Jennifer Kamp; James E. *
Kandlik; Jeremy A. Kuhlmann; Carol *
Lexow; Dennis Long; Richard Martin; *
Shawn McCouom; Daniel J. McGavock;*
Jan B. McCrary; Brenda M. McGruder; *
Matthew Meinert; Rodger W.               *
Mertensmeyer; William Morris; Robert *
Loren Muellet; Thomas G. Ogden;          *
Douglas W. Oncken; Michael Orth;         *
Eric T. Pooler; John Purves; David H. *
Richerson; Dennis G. Rohr; Brint         *
Roush; Danny O. Sandker; Jon Adam *
Sapp; Brian S. Smith; Rachel L. Smith;    *
Deborah L. Sorrell; Willam A. Stafford;   *
Jeffrey Strawn; Daniel K. Sturgeon;       *
Christopher Sturm; Michael G. Sutton;     *
Timothy Taylor; Coline E. Tegerdine;      *
J. Thacker; Eric William Thiessen;        *
Doug Thoma; Kevin R. Thompson;            *
Wade Thompson; Brian K. Tilman;           *
Rolando Tobar; Lisa A. Rodd; Gary         *
L. Warren, Jr.; Brian A. Wasson; Ladon    *
Lee Whitaker; Tandall Elwin White;        *
David C. Williamson; Tony Willits;        *
Marc Wright; Donald R. Zielinski;         *
John Wood; Richard Douglas; Mark W.       *
Poole,                                    *
                                          *
            Plaintiffs-Appellees,         *
                                          *
      v.                                  *
                                          *
City of Columbia, Missouri,               *
                                          *
            Defendant-Appellant.          *

                                    ___________

                              Submitted: October 14, 2005
                                 Filed: February 8, 2006
                                  ___________

Before LOKEN, Chief Judge, LAY and BENTON, Circuit Judges.
                              ___________

LAY, Circuit Judge.




                                          -2-
                                 I. BACKGROUND

       Chris N. Acton and ninety-nine current and former firefighters (the
“firefighters”) employed by the City of Columbia, Missouri (the “City”) brought suit
against the City for failing to include a series of payments in the firefighters’ regular
rate of pay, in violation of 28 U.S.C. § 207(e) (the Fair Labor Standards Act or
“FLSA”).

       The firefighters subsequently moved for partial summary judgment, specifically
alleging that monies earned under the City’s sick leave buy-back, step-up pay, meal
allowance, and standby programs should be included in their regular rate of pay. The
firefighters also alleged the City willfully violated the FLSA and used an incorrect
hours ratio to determine when the firefighters become eligible for overtime pay under
the FLSA. The City did not file a cross-motion for summary judgment.

       While the firefighters’ motion for partial summary judgment was pending, the
parties entered into a settlement agreement on the firefighters’ longevity pay, step-up
pay, and standby pay claims. During this interim period, the City also changed its
hours ratio policy to comport with the requirements set forth in the firefighters’
motion for partial summary judgment.

       Regarding the firefighters’ outstanding claims, the district court1 subsequently
granted the firefighters’ motion in part, ruling that sick leave buy-back monies should
be included in the firefighters’ regular rate of pay. However, the district court also
denied the firefighters’ motion in part, ruling that monies received under the City’s
meal allowance program were excluded from the regular rate. Finally, the district
court found no evidence that the City willfully violated the FLSA.


      1
      The Honorable Nanette K. Laughrey, United States District Judge for the
Western District of Missouri.

                                          -3-
       After entry of the district court’s ruling, the parties filed a stipulation for
dismissal on the claims addressed in the settlement agreement. The parties further
stipulated that final judgment should be entered on the claims adjudicated in the
district court’s order.

      The district court then entered final judgment on the settled claims, and each
was dismissed with prejudice. The district court also referenced its prior order
granting in part and denying in part the firefighters’ motion for partial summary
judgment.

       The City now appeals the district court’s grant of summary judgment to the
firefighters, arguing that monies paid under its sick leave buy-back program should
not be included in the firefighters’ regular rate of pay.

                        II. APPELLATE JURISDICTION

       At oral argument this court raised the issue of jurisdiction. We hold that the
facts of this case present a rare instance where we may exercise jurisdiction to hear an
appeal from an order that was granted in part and denied in part.

       The jurisdiction of federal courts of appeal is generally limited to appeals taken
from “final decisions of the district courts.” 28 U.S.C. § 1291. Certain exceptions to
the final judgment rule exist, as set forth in 28 U.S.C. § 1292, Rule 54(b) of the
Federal Rules of Civil Procedure, and under the collateral order doctrine.2


      2
        Under § 1292, federal courts of appeal may exercise jurisdiction over an
interlocutory order that involves the denial of an injunction, or where the district court
has certified a controlling issue of law. 28 U.S.C. § 1292(a)(1), (b). Under Rule 54(b)
of the Federal Rules of Civil Procedure, federal courts of appeal also maintain
jurisdiction over summary judgment rulings that do not dispose of an entire case, but
where the district court nonetheless states that there is no just reason for delay and

                                           -4-
Reinholdson v. Minnesota, 

, 849 (8th Cir. 2003). None of these
exceptions, however, are applicable to the facts of this case, and our analysis therefore
turns on whether the district court’s order constitutes a final decision for purposes of
§ 1291. 

order to be final, it must “‘end[] the litigation on the merits and leave
nothing for the court to do but execute the judgment.’” 

v.
Hamilton County, 

, 204 (1999)). Moreover, a final order must “‘reflect
some clear and unequivocal manifestation by the trial court of its belief that the
decision made, so far as the [trial court] is concerned, is the end of the case.’” 

v. United States, 

, 151 (8th Cir. 1995)) (internal
citations omitted).

       We first note that an order denying summary judgment to one party coupled
with an order granting summary judgment to the same party on a different claim does
not normally constitute a final decision under § 1291 because all the claims in the case
are not yet resolved. See Catlin v. United States, 

, 233 (1945). The trial
court’s denial of summary judgment as to one claim establishes that fact issues still
remain for resolution at trial. Commodity Futures Trading Comm’n v. Morse, 

, 63 (8th Cir. 1985) (“Denial of summary judgment . . . simply indicates that
genuine fact issues exist [for trial].”). This denial, in turn, renders the entire order
interlocutory, thereby precluding appellate review under § 1291. See Helm Fin. Corp.
v. MNVA R.R., Inc., 

, 1079 (8th Cir. 2000) (“In general, denials of
summary judgment are interlocutory and thus not immediately appealable.”).


expressly directs entry of final judgment. Fed. R. Civ. P. 54(b). Finally, under the
narrow, judicially-created collateral order doctrine, federal appeals courts may also
exercise jurisdiction over interlocutory orders involving “decisions that are
conclusive, that resolve important questions separate from the merits, and that are
effectively unreviewable on appeal from the final judgment.” Reinholdson v.
Minnesota, 

, 849 (8th Cir. 2003) (internal citations omitted).

                                          -5-
       Here, however, when the district court granted the firefighters’ motion for
partial summary judgment on the sick leave buy-back claim and denied the
firefighters’ motion on the meal allowance and willfulness claims, it noted that no
genuine issues of material fact existed regarding any of the firefighters’ claims.

        Specifically, in the portion of its order denying summary judgment, the district
court cited Department of Labor regulations to support its conclusion that monies
earned under the City’s per diem meal allotment program should not be included in
the firefighters’ regular rate of pay. Similarly, the district court found no evidence to
support the firefighters’ contention that the City willfully violated the FLSA. In sum,
the district court made no reference to any factual disputes that required resolution at
trial in either of its summary judgment denials. Indeed, footnote number one of the
district court’s order expressly notes that, “[t]here is no dispute about the facts of this
case.” Acton v. City of Columbia, No. 03-4159-CV-NKL, 

, at *1
(W.D. Mo. Sept. 10, 2004).

       Courts have long struggled to decide precisely which orders qualify as “final”
for purposes of § 1291. Gillespie v. United States Steel Corp., 

, 152
(1964). The determination as to whether an order is final is often far from clear and,
in these instances, we are guided by the accepted rule that the requirement of finality
under § 1291 be given a “practical rather than technical construction.” Cohen v.
Beneficial Indus. Loan Corp., 

, 546 (1949); see also Arendt v. United
Power Ass’n, 

, 756 (8th Cir. 1980).

     To this end, we have no doubt that, had the City filed a cross-motion for
summary judgment on the meal allowance and willfulness claims, the district court
would have granted this motion.3 This conclusion is based on the district court’s legal

      3
       Similarly, if the firefighters had voluntarily dismissed their meal allowance and
willfulness claims, this dismissal would have rendered the district court’s order
unquestionably final. See Chrysler Motors Corp. v. Thomas Auto Co., 

,

                                           -6-
analysis and subsequent rulings as matters of law, as well as the district court’s
express determination that no genuine issues of material fact were implicated in any
of the three claims before the court. We therefore recognize the part of the district
court’s order denying summary judgment to be, in sum and substance, a grant of
summary judgment to the City. See Helm Fin. 

(stating that
a denial of summary judgment as a matter of law, coupled with a voluntary dismissal
of all remaining claims, “in effect made the denial of summary judgment a final
judgment for purposes of appeal”). Moreover, the analysis utilized, and ultimate legal
conclusions drawn, by the district court in its order provide the requisite “clear and
unequivocal manifestation” of the court’s intent to dispose of the claims on the merits
given the absence of any factual dispute.

        We recognize that, when making the determination as to whether an order is
final in the practical rather than technical sense, courts must balance “the
inconvenience and costs of piecemeal review on the one hand [against] the danger of
denying justice on the other.” Gillespie, 

(internal citations omitted).
In this case, however, there is no danger of piecemeal review that would inhibit us
from extending jurisdiction. The firefighters’ outstanding claims were resolved before
the district court’s order was issued. Thus, adjudication of this appeal will dispose of
this litigation.4




540 (8th Cir. 1991) (holding that appellant’s voluntary dismissal of the remainder of
his claims transformed a grant of a motion for partial summary judgment into a final
order).
      4
        Although extension of jurisdiction in this case will resolve whether sick leave
buy-back monies should be included in the firefighters’ regular rate of pay, the
parties’ settlement agreement limits the effect of our ruling. Therefore, the true
purpose of this appeal is to determine whether the City, in the future, must include
sick leave buy-back monies in the regular rates’ of pay of its other employees.

                                          -7-
      We see no compelling reason not to extend jurisdiction over this appeal simply
because the district court failed to expressly state that it was granting the City
summary judgment on the firefighters’ meal allowance and willfulness claims, where
every indication suggests the district court intended to do just this.5 A contrary
decision would force the City to file a motion for summary judgment that would
surely be granted and possibly appealed once again, thereby further burdening our
system with unnecessary litigation and wasting judicial resources. See Barnes v.
Bosley, 

, 720 (8th Cir. 1986) (taking into consideration “the considerable
savings in judicial resources” when determining if an order is final under § 1291).6

       Further, the firefighters are not prejudiced by this ruling. We base this
conclusion on the firefighters’ failure to contest the issue of appellate jurisdiction in
their brief, as well as their express concession that this court maintained jurisdiction
to hear the City’s appeal. Simply, the firefighters made an informed and calculated
decision not to appeal the district court’s denials of summary judgment even though
they recognized an appeal to be within this court’s jurisdiction. This fact alleviates
any concern that our extension of appellate jurisdiction in this instance would



      5
        A district court maintains the discretion to grant a non-moving party summary
judgment, even where the nonmovant does not file a cross-motion for summary
judgment. Burlington N. R.R. Co. v. Omaha Pub. Power Dist., 

, 1231
n.3 (8th Cir. 1989).
      6
        We do, however, reject the parties’ attempts to consent to finality. First, the
parties requested that the district court enter final judgment over its order granting in
part and denying in part the firefighters’ motion for partial summary judgment. Then,
the parties expressly conceded the issue of appellate jurisdiction in their respective
briefs. Litigants themselves cannot consent to the jurisdiction of the courts. Orsini
v. Wallace, 

, 479 (8th Cir. 1990) (“[P]arties cannot consent to subject
matter jurisdiction [] because extending consent to its ‘inevitable conclusion’ will
eliminate civil jurisdiction from the federal courts, a result that is likely
unconstitutional.”).

                                          -8-
otherwise preclude the firefighters from filing an appeal under the belief that the
district court’s order was interlocutory under § 1291.

       The facts of this case compel the conclusion that the district court’s order was
final under § 1291. The record shows the district court adjudicated the firefighters’
meal allowance and willfulness claims given the absence of a genuine dispute of
material fact and, as such, the order denying summary judgment on these claims also
constituted a grant of summary judgment to the City. This, coupled with the district
court’s grant of summary judgment to the firefighters on the sick leave buy-back
claim, renders the order a final decision for purposes of § 1291. Accordingly, we have
jurisdiction to hear the merits of the City’s appeal.

                          III. STANDARD OF REVIEW

        We review a district court’s grant of summary judgment de novo, applying the
same standards set forth by the district court. McLaughlin v. Esselte Pendaflex Corp.,

, 510 (8th Cir. 1995). Summary judgment is proper “if the pleadings,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56 (c). The facts in this
case are undisputed. Our review is therefore limited to matters of law, which we
review de novo. Wal-Mart Stores, Inc. v. Alexander & Alexander, 

,
1330 (8th Cir. 1988).

                          IV. SICK LEAVE BUY-BACK

       Under the City’s sick leave buy-back program, firefighters who work twenty-
four hour work shifts during the course of one year accumulate ten days of sick leave.
Firefighters who fail to use their sick leave are entitled to “sell back” any of the ten
unused sick days to the City in exchange for a lump sum payment equal to 75% their

                                          -9-
regular hourly pay, provided the firefighter has amassed at least six months sick leave.
The firefighters contend that all monies received from the sale of sick leave should be
included in their regular rate of pay. The regular rate of pay calculation is critical
because it provides the base point from which the firefighters’ overtime compensation
is calculated.7

A.    The Fair Labor Standards Act

        Section 207(e) of the FLSA provides, in relevant part, that “all remuneration
for employment paid to, or on behalf of, the employee” must be included in the
employee’s regular rate of pay, provided such remuneration is not prohibited by one
of eight statutory exclusions listed under § 207(e)(1)-(8). 29 U.S.C. § 207(e). There
is a statutory presumption “that remuneration in any form is included in the regular
rate calculation. The burden is on the employer to establish that the remuneration in
question falls under an exception.” Madison v. Res. for Human Dev. Inc., 

, 187 (3d Cir. 2000). Under the FLSA, all employers, including public agencies,
are covered by the Act.8 29 U.S.C. § 203(d), (x). Therefore the City, as a municipal
entity, is subject to the requirements of the FLSA.




      7
        The FLSA requires employers to pay covered employees time and one-half
their regular rate of pay for each hour worked in excess of forty hours per workweek.
29 U.S.C. § 207(a)(1).
      8
       In 1985, the United States Supreme Court ruled the FLSA could be
constitutionally extended to regulate state and local governments. Garcia v. San
Antonio Metro. Transit. Auth., 

, 557 (1985). In response, Congress
amended the FLSA to give all public employers until April 15, 1986, to comply with
the Act. Fair Labor Standards Act Amendments of 1985, Pub. L. No. 99-150, § 2(c),
99 Stat. 787, 788. Since this time, the FLSA has been applied to the conduct of state
and local government.

                                         -10-
        Before beginning our analysis, we must clarify a preliminary matter of statutory
construction under the FLSA that has been a point of confusion between the parties.
First, the City argues sick leave buy-back monies do not constitute remuneration for
employment. Next, the City contends sick leave buy-back monies are also excluded
under § 207(e)(2) because they “are not made as compensation for [the employee’s]
hours of employment.” 

language “not made as compensation for
[the employee’s] hours of employment” posited in § 207(e)(2) is but a mere re-
articulation of the “remuneration for employment” requirement set forth in the
preambulary language of § 207(e). Section 207(e)(2), properly understood, operates
not as a separate basis for exclusion, but instead clarifies the types of payments that
do not constitute remuneration for employment for purposes of § 207. Therefore, we
treat the City’s “remuneration for employment” and § 207(e)(2) arguments under the
same mode of analysis. Finally, because both provisions modify one other, we must
necessarily consider the express requirements of § 207(e)(2) and the federal
regulations interpreting it when determining if sick leave buy-back monies constitute
remuneration for employment.

      1.     Remuneration for Employment.

      Regulation § 29 C.F.R. § 778.223 provides the touchstone for our inquiry
because it addresses the scope of § 207(e)(2).9 Specifically, regulation § 778.223


      9
       The firefighters also cite regulation § 778.211 and a Department of Labor
opinion letter to support their position that sick leave buy-back monies should be
included in their regular rate of pay. See 29 C.F.R. § 778.211; Opinion Letter from
Herbert J. Cohen, Deputy Administrator, U.S. Department of Labor (Feb. 24, 1986).
Under regulation § 778.211, attendance bonuses and bonuses announced to induce
employees to work more steadily or efficiently must be included in the employee’s
regular rate of pay. However, we need not address whether sick leave buy-back
monies are tantamount to an attendance bonus per se, or a bonus announced to induce
employees to work more steadily or efficiently, because these requirements are
extraneous to § 207. Under § 207, we need only consider two factors. First, we must

                                         -11-
addresses whether monies paid to employees for remaining on call are excluded from
the regular rate under § 207(e)(2). The regulation concludes that monies paid to
employees to remain on call, while not related to “any specific hours of work,” are
nevertheless awarded as “compensation for performing a duty involved in the
employee’s job” – namely, the employee’s willingness and commitment to work
unscheduled hours if requested. See 29 C.F.R. § 778.223. The plain language of the
regulation makes clear that all monies paid as compensation for either a general or
specific work-related duty should be included in the regular rate. The critical question
before this court is whether sick leave buy-back monies compensate the firefighters
for some specific or general duty of employment.

       In order to qualify for sick leave buy-back payments, firefighters must come to
work regularly for a period of several years in order to amass the requisite six month
sick leave reserve. Then, the firefighters must also accrue additional sick leave in the
present year in order to be eligible for buy-back. Thus, the primary effect of the buy-
back program is to encourage firefighters to come to work regularly over a significant
period of their employment tenure. We recognize consistent workplace attendance to
be a general duty of employment and, therefore, rule that sick leave buy-back monies
constitute remuneration for employment.10




determine whether sick leave buy-back monies constitute remuneration for
employment. If so, we must then decide whether sick leave buy-back monies are
nevertheless excluded by one or more of the statutory exceptions enumerated under
§ 207(e)(1)-(8). 29 U.S.C. § 207.
      10
         We also note that sick leave buy-back monies do not resemble any of the
payments expressly excluded under § 207(e)(2). See 29 C.F.R. § 778.224(a) (noting
that payments excluded from the regular rate under § 207(e)(2) must “be ‘similar’ in
character to the payments specifically described” in (e)(2)). Sick leave buy-back
monies, in contrast to § 207(e)(2) payments, are awarded to employees for coming to
work consistently, not for work that was never performed.

                                         -12-
       The City sets forth three primary arguments to support its conclusion that sick
leave buy-back payments are not remuneration for employment. First, the City argues
its buy-back program was intended to promote two objectives unrelated to employee
compensation. On the one hand, the sick leave buy-back program was intended to
provide firefighters with a form of short-term disability insurance because the City
does not have a disability policy covering employee illness or disability lasting six
months or less. The sick leave buy-back program, with its six-month accrued sick
leave requirement, was devised as a mechanism for employees to self-insure against
personal illness or disability. Alternatively, the City argues its sick leave buy-back
program discourages employees from treating sick leave as another form of vacation
or personal leave because the program creates a money incentive for employees to
accrue, but not use, their sick leave.

       These arguments are not compelling. Even if the sick leave buy-back program
was intended to provide employees with a form of short-term disability insurance and
to discourage misuse of sick leave, one plain effect of the program is to reward regular
workplace attendance through a non-discretionary, year-end, lump sum payment. The
City’s proffered justifications do not change the undisputed fact that the firefighters
are plainly rewarded for regularly showing up for work over a period of years.

        Second, the City also cites 29 C.F.R § 825.125, a Department of Labor opinion
letter, and a decision from a federal district court in the Northern District of Illinois
to support its claim that bonuses awarded for perfect attendance do not require
performance by the employee, but rather contemplate the absence of occurrences. 29
C.F.R. § 825.215 (“Bonuses for perfect attendance and safety do not require
performance by the employee but rather contemplate the absence of occurrences.”);
Opinion Letter from Maria Echaveste, Administrator, U.S. Department of Labor (Mar.
21, 1994) (“Bonuses premised on ‘perfect attendance’ or ‘perfect safety’ are rewards
not for work or production, but for compliance with rules.”); Dierlam v. Wesley
Jessen Corp., 

. 1052, 1057 (N.D. Ill. 2002) (noting that a bonus that

                                          -13-
does not require its recipient to meet production goals or quality standards “simply
contemplates the non-occurrence of an event – [the recipient’s] absence from work”).

      However, none of these three authorities address the applicability of § 207.
Instead, each confronts the issue of whether an employee is entitled to a bonus for
good attendance upon returning to work under the Family Medical Leave Act. The
City’s attempt to cite language taken out of context from authorities interpreting
another federal statute in no way binds us in this case. See Arnott v. Mataya, 

, 124 n.4 (8th Cir. 1993) (stating that an argument based on language that was
“taken out of context” from other inapplicable cases was not persuasive). To the
extent the City uses these authorities to argue that consistent workplace attendance
does not “require performance by the employee,” we flatly disagree. We believe
consistent workplace attendance does require performance. In the modern workplace,
regular and prompt workplace attendance is a valued commodity, one for which the
City appropriately rewards its employees.

       Finally, the City cites the Sixth Circuit’s decision in Featsent v. City of
Youngstown, 

, 1461 (6th Cir. 1995), to support its argument that sick
leave buy-back monies do not constitute remuneration for employment.11 In Featsent,
the Sixth Circuit ruled that monies paid to employees who did not submit medical



      11
         The City also cites the Third Circuit’s decision in Minizza v. Stone Container
Corp., 

, 1461 (3d Cir. 1988), to support its claim that sick leave buy-
back monies do not constitute remuneration for employment. However, Minizza
addressed a fundamentally different payment program. The Minizza court was
confronted with the issue of whether lump sum payments awarded to induce
employees to ratify a collective bargaining agreement should be excluded under
§ 207(e)(2). Because the “remuneration for employment” determination is a highly
fact-intensive question that focuses narrowly on the specific operation of the program
at issue, the Third Circuit’s Minizza decision does not help instruct our analysis
because that case considered a wholly distinguishable payment program.

                                         -14-
claims and failed to use accrued sick leave12 were excluded from the regular rate of
pay under § 207(e)(2) because such payments are “unrelated to the [employee’s]
compensation for services and hours of service.” 

.

       We decline to follow the Sixth Circuit’s decision in Featsent. The Featsent
court failed to articulate any basis for its reasoning. The court did not distinguish
regulation § 778.223 in reaching its conclusion, nor did it recognize and explain how
payments awarded to an employee for not using accrued sick leave, which necessarily
requires employees to work more days than they are required, is not tantamount to
payment for services rendered. Because we are unpersuaded by the Sixth Circuit’s
analysis, we reject its conclusion.

       2.     Statutory Exceptions.

       The second part of our inquiry asks whether sick leave buy-back payments are
excluded by of one of the eight statutory exceptions listed under § 207(e). The City’s
appeal relies exclusively on § 207(e)(2), which we have already addressed. Although
the City cites no other basis for exclusion in its brief, this court, at oral argument, first
raised the issue of whether § 207(e)(5) excludes sick leave buy-back payments from
the regular rate. The dissent contends that sick leave payments should be excluded
under § 207(e)(5). We now address this issue.

       Section 207(e)(5) provides:

       [E]xtra compensation provided by a premium rate paid for certain hours
       worked by the employee in any day or workweek because such hours are
       hours worked in excess of eight in a day or in excess of the maximum
       workweek applicable to such employee under subsection (a) or in excess


       12
        Under the program at issue in Featsent, employees accrue sick leave at a rate
of one and one-quarter days per month of employment. 

n.4.

                                            -15-
      of the employee’s normal working hours or regular working hours, as the
      case may be[.]

argues sick leave monies should be excluded under § 207(e)(5)
because they constitute premium payments for specific hours worked. This analysis
fails for several reasons. First, sick leave monies are not paid for specific hours
worked. Instead, these payments compensate employees for a record of consistent
attendance over the course of several years, not simply for working days during a
given year they are otherwise entitled to take off.

        Second, in order for payments to be excluded under § 207(e)(5), they must be
“paid for certain hours worked by the employee in any day or workweek because such
hours are hours worked in excess of eight in a day or in excess of the maximum
[required in a] workweek.” 

as the dissent does, that sick leave
buy-back payments are paid in sole recognition for the specific days a firefighter
chooses to work instead of calling in sick,13 there is still no basis to exclude such
payments under § 207(e)(5). Section 207(e)(5), by its own terms, limits its
applicability to payments made for certain hours worked in excess of the employee’s
normal daily or weekly schedule. Under the dissent’s approach, buy-back payments
are, at best, premium payments for working normally scheduled hours.

      Finally, § 207(e)(5) plainly excludes only “premium” payments – that is,
payments no less than one and one-third the employee’s regular rate. See 29 C.F.R.
§ 778.308(b). The dissent creatively “compounds” sick leave buy-back payments,
which are awarded at the sub-premium rate of 75% the firefighters’ hourly wage, with


      13
         We note it is impossible, in the practical sense, to determine the specific days
a given Firefighter would have worked, but decided not to, in order to preserve his
eligibility for buy-back payments. This further supports the conclusion that buy-back
payments are not attributable to specific days or hours worked.

                                          -16-
the firefighters’ base hourly wage. This ignores the fact that the premium payments
themselves must be at least one and one-third the employee’s hourly rate. See 

as it may, the dissent’s approach, taken to its logical conclusion, yields unsettling
results. Under the dissent’s theory, all extra monies paid to employees for specific
hours worked may be “compounded” with the employee’s regular hourly rate and
excluded under § 207(e)(5), in contravention of the express requirements of 29 C.F.R.
§ 778.207(b). See 29 C.F.R. § 778.207(b) (stating that non-overtime premiums for
specific hours worked, such as nightshift differentials and hazard pay, must be
included in the regular rate). Therefore, we rule that § 207(e)(5) does not exclude sick
leave buy-back payments from the regular rate of pay.

                                 IV. CONCLUSION

       The authority of federal regulation § 778.223, coupled with the statutory
presumption favoring the inclusion of all monies in the regular rate of pay, mandate
that lump sum payments awarded under the City’s sick leave buy-back program be
included in the firefighters’ regular rate of pay. As such, we affirm the district court’s
grant of summary judgment.

LOKEN, Chief Judge, dissenting.

       I respectfully dissent. I believe that the only circuit court to consider the issue
correctly concluded that compensation paid under a sick leave buy-back program such
as the City of Columbia’s should be excluded from the FLSA’s definition of “regular
rate.” Featsent v. City of Youngstown, 

(6th Cir. 1995).

       Sick leave buy-back payments admittedly do not fit comfortably within the
exclusion in 29 U.S.C. § 207(e)(2) for “payments made for occasional periods when
no work is performed.” But the court is wrong to suggest that such payments “are not
related to specific duties or hours worked.” In my view, sick leave buy-back


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payments are functionally equivalent to premium overtime pay that is expressly
excluded from an employee’s regular rate. Like overtime, and unlike true attendance
bonuses, these payments relate to specific hours worked -- the days that the employee
chose to work rather than to use paid sick leave.

       As the Supreme Court said in the FLSA’s formative years, “[t]o permit
overtime premium to enter into the computation of the regular rate would be to allow
overtime premium on overtime premium -- a pyramiding that Congress could not have
intended.” Bay Ridge Operating Co. v. Aaron, 

, 464 (1948). This
principle was codified in 1949. See 29 U.S.C. §§ 207(e)(5)-(e)(7). If sick leave buy-
back payments fit awkwardly under § 207(e)(2) because they relate to hours worked,
rather than to hours not worked, these payments are squarely within the purview of
the three exclusions found in subsections (e)(5)-(e)(7) that apply to “extra
compensation provided by a premium rate paid for certain hours worked.”14

       Section 207(e)(5) excludes “extra compensation provided by a premium rate
paid for certain hours worked . . . because such hours are hours worked . . . in excess
of the employee’s . . . regular working hours.” A firefighter who works one or more
paid sick leave days has worked in excess of his “regular working hours.” If
otherwise eligible under the City’s program, he may sell unused sick leave to bring
his total pay for sick leave hours worked up to 175% of his regular rate. The related
exclusion in § 207(e)(6) applies to “extra compensation provided by a premium rate
paid for work by the employee on . . . regular days of rest” if the premium rate is not
less than one and one-half times the regular rate. These exclusions were intended to


      14
        Unlike the exclusion in § 207(e)(2) for payments for hours not worked,
compensation excluded from the employee’s regular rate under subsections (e)(5)-
(e)(7) “shall be creditable toward overtime compensation payable pursuant to this
section.” § 207(h). The record on appeal does not reveal what impact, if any, that
difference would have in this case. I would leave that question for the district court
to resolve on remand.

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prevent the pyramiding of “overtime on overtime.” They have been applied to a
variety of overtime compensation programs. See Alexander v. United States, 

, 1577 (Fed. Cir. 1994); Brock v. Two “R” Drilling Co., Inc., 

,
1201-02 (5th Cir. 1985); Brennan v. Valley Towing Co., Inc., 

, 109-10
(9th Cir. 1975).

       In response, the court asserts that sick leave buy-back payments are not
compensation at a premium rate. This ignores economic reality. The City agreed to
pay the plaintiff firefighters for ten days of sick leave each year. If sick leave is used,
the City must pay another employee to do the work, presumably at a rate at least equal
to the regular rate of the firefighter on sick leave. If the firefighter instead works,
leaving his sick leave unused, the City through the buy-back program pays, on top of
the regular rate already paid, a premium equal to 75% of the firefighter’s regular rate.
Thus, for those days worked, the firefighter is paid 175% of his regular rate. This
premium is greater than and functionally no different than the premium the FLSA
requires employers to pay for overtime work -- not less than one and one-half times
(150%) the employee’s regular rate. See 29 U.S.C. § 207(a). And like overtime, extra
compensation paid for unused sick leave is offset by the employer not incurring the
expense of hiring additional workers or paying other employees to fill in.

       It may make little difference whether the City’s sick leave buy-back payments
are excluded from a firefighter’s regular rate under § 207(e)(2) because they are
“similar to payments made when no work is performed due to illness,” 

, or under §§ 207(e)(5) or (6) as overtime compensation paid at a premium
rate. But the contrary decision of the district court and this court to include those
payments in the regular rate both distorts FLSA principles and discourages use of a
creative overtime payment device that benefits both employers and employees. I
respectfully dissent from this decision.
                        ______________________________



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