DUNKIRK — Dunkirk’s fiscal crisis appears to have taken a turn for the worse. According to emails and phone calls to the OBSERVER this week, there are reports that employees who have worked overtime hours are not being compensated for their time in paychecks.

If that is the case, the city is in violation of the Fair Labor Standards Act of the U.S. Department of Labor that comes with additional financial penalties.

Area union officials noted the American Federation of State, County, and Municipal Employees District Council 66 is aware of the situation and is taking action. Council 66 is a labor union representing over 8,500 public and nonprofit sector workers in Upstate New York and the Hudson Valley.

Last month, Common Council unanimously passed a resolution ordering a freeze on all non-emergency overtime, until further notice. The resolution did not strictly define what “non-emergency” is.

City officials had asked department heads to forego overtime for months, as the scope of Dunkirk’s financial problems became clear. However, enough overtime continued that councilors felt they needed a formal resolution to halt it.

An email seeking comment on the withholding of overtime pay from the administration and council members was answered by councilman at-large Nick Weiser and council members Natalie Luczkowiak and Nancy Nichols.

Weiser said since that resolution, all overtime needs to be approved by the mayor while Luczkowiak and Nichols said they had no information regarding the action.

That resolution in no way overrides New York state labor law that says “employees must receive overtime pay at the rate of 1½ times their regular rate of pay for all hours worked over 40 in a work week.”

Don Williams, Dunkirk Central Labor Council president, said the organization supports those employees who have been wrongly penalized. “The city needs to understand that they did not only violate the Collective Bargaining Agreement with AFSCME Local 912, the city broke the law!” he said, noting the city needs to “pay your employees for the work they’ve done.”

Dunkirk’s financial shortfall first came to light at the end of March when the city was running short on cash to pay its bills. In June, council approved a $16.8 million revenue anticipation note through New York state.

This month, a $28.9 million budget was announced that proposes a 108% tax increase for city property owners in 2025 due to previous years of mismanaged finances.

OBSERVER staff writer M.J. Stafford contributed to this article.