Are you a trucking company? If so, you may be exposed to class action lawsuits for minimum wage, break time, and overtime violations.
Trucking companies are essential to our national economy and security. However, trucking companies often risk violating wage and hour laws (minimum wage, break time, and overtime) by doing “what everyone else does” without thinking it through.
The Fair Labor Standards Act (FLSA) is the federal law that governs the payment of wages for hours worked. Interstate truckers are generally exempt from overtime. Sometimes, even intrastate truckers can be exempt. But if the trucks are 10,000 lbs. or less, overtime is required.
Minimum wage is a bigger issue. There is no truck driver exception for minimum wage. It makes no difference how you pay drivers (hourly, by the mile, or by the task). Drivers’ pay must meet or exceed minimum wage on an hourly basis. Rarely (but sometimes), overtime can be an issue too.
Common industry errors include:
- Not counting all work hours as time worked – only productive, driving time – as hours worked, with drivers dropping below minimum wage when extra time is included.
- Not counting breaks under 20 minutes as hours worked. Any break under 20 minutes must be counted as hours worked, even if the driver does no work. It is a paid break by law.
- Misclassification as an independent contractor. Employees must be paid minimum wage; independent contractors do not. But the trucking industry is notorious for calling drivers independent contractors when they are really employees, and deducting charges that drop drivers below minimum wage. Examples include deductions for fuel, e-log and electronic monitoring, safety violations, and insurance that the company deducts from driver earnings—dropping the driver below minimum wage. Just calling someone an independent contractor doesn’t cut it. Most egregious in the industry, if the company leases the rig to the driver and the driver must exclusively drive for one company, that driver will almost certainly be an employee. A true independent contractor would provide all of their own equipment (including the rig), none of it provided by the trucking company, and be paid a flat rate per mile with no deductions.
- Not paying overtime to intrastate truckers. These drivers are not exempt from overtime because either:
(a) a truck is 10,000 lbs. or less, and if even 1 truck driven during a week is 10,000 lbs. or less, there is no overtime exemption for that week; or even if over 10,000 lbs.
(b) the interstate element is missing. If the driver does not perform any interstate driving, including delivering goods to an intrastate terminal as part of an interstate shipment or being available for out-of-state trips, the exemption does not apply.
Two final mistakes:
- Not having an enforceable arbitration agreement. An enforceable arbitration agreement is the only way to force drivers to bring claims individually, instead of as a collective group. The problem is federal bars arbitration agreements from being enforceable against those engaged in interstate movement of goods. Writing such an agreement per the Federal Arbitration Act is worthless. It is worse than worthless, because it gives a false sense of security. However, almost every state has its own arbitration act. Most state arbitration acts do NOT have an exception for interstate transportation workers. But it is important to check your specific state.
- Forgetting about state laws. State law may apply in addition to federal law for:
(a) the state where the company’s headquarters are located; and/or
(b) the state where the driver performs the majority of their work.
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