Laws Differ on Motor Carrier Exemption
The Fair Labor Standards Act (“FLSA”) requires employers to pay most employees the statutory overtime rate of 1 ½ times regular wages for hours worked in excess of 40 in a single workweek. However, the under the federal Motor Carrier Act and similar state laws, many companies can take advantage of an exemption from overtime pay for certain truck drivers and employees in other positions related to commercial conveyances.
An Appellate Court recently upheld a New Jersey Department of Labor and Workforce Development ruling that the state’s version of this exemption applies only to businesses primarily engaged in trucking or moving and storage, and not to companies that “transport goods incident to a different business purpose.” This was not good news for the giant furniture retailer Raymour and Flanigan, which was on the wrong end of the decision [In re Raymour & Flanigan Furniture, 405 N.J. Super. 367 (App. Div., March 2, 2009)]. The company argued that its trucking operation was completely separate from its retail furniture business, and that New Jersey’s narrowly-written trucking industry exemption therefore applied with respect to its transportation and distribution employees. The Court disagreed, mandating that approximately 500 current and former delivery workers share more than $2 million in back overtime wages, much to the chagrin of the retailer.
The impact of this case cannot be understated. Under the FLSA, when federal and state wage laws are in conflict, employees must be given the benefit of the law that is the most favorable to them. In this case, while the truckers in question might have been covered by the federal exemption from overtime pay, the narrower New Jersey exemption did not cover them. Not only New Jersey companies, but also other businesses across the nation must be careful to consider the state laws as well as federal laws when attempting to determine whether employees are entitled to overtime pay.
how does this apply in a situation where the company operates school buses
Whether a school bus driver is covered by the Motor Carrier's Exemption depends on whether the driver is expected to routinely transport students across state lines. Courts in the various states are not consistent with the exact standard and the extent of this interstate transport that is necessary. Also, certain states do not recognize the Motor Carriers exemption. Thus, whether the exemption applies to your drivers may depend greatly upon the state you are located in. In general, however, if there is no interstate travel, or if it is very sporadic, it is unlikely that the exemption will apply to the driver.
I represent a mixed fleet chauffeur service ranging from sedans, SUVS, Limos, Vans, Buses and trolleys. My state follows the Fed Motor Carrier Act. Interstate travel is no problem. However, with employees being cross trained in both qualifying and non-qualifying vehicles, the interplay b/w the FLSA and Motor Carrier Act becomes gray. Are drivers exempt outright if they drive qualifying vehicles regularly? Or must a company pay drivers OT if driving sedans and then no OT if driving vans? What if the drivers mix it up and drive both every week? Is this administrative nightmare really the outcome of this ambiguous legislation?
You’ve posed some very interesting questions here. You are correct that this can be very confusing. The answers depend on both the state you are in and some specific facts. Since there’s no clear-cut answer, it is likely best to consult with an employment lawyer familiar with the subject matter.
We are an Indiana corporation that has an office in New Jersey. We received a notice of alleged violations from the NJ DOL for violations of overtime rate and unpaid wages for our drivers (we are not in the trucking business, so Flanigan does not apply). Some of these employees are NJ residents and some of the trucks are based in NJ, but most of their work (about 70%) is done outside NJ and most of the overtime accrued outside NJ. What do we need to show to successfully argue that NJ's laws on wage and hour do not apply?
What are the laws concerning overtime pay for truckers who drive logging trucks? Logging is considered an agricultural business.
There is an overtime exemption for small logging operations where the employer has 8 or less employers. It is also possible that a trucker could be exempt from overtime as a motor carrier, depending on the specific duties the trucker has.