HR Management & Compliance

A Ship with No Captain Means No Change in Course

As of press time, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) still doesn’t have an administrator. Cheryl Stanton, who is currently the executive director of South Carolina’s Department of Employment and Workforce, was nominated for the position in September 2017. However, the Senate returned her nomination to the president in January 2018. It isn’t known when or if someone else will be nominated for the position.

Source: designer491 / iStock / Getty

Although there have been some changes in the way the WHD operates since the Trump administration took over, they haven’t been drastic. One change is the WHD’s decision to return to the practice of issuing opinion letters. The agency began by reissuing several opinion letters that were withdrawn in early 2009 by the Obama administration, and it has recently issued a couple of new opinion letters as well as a new position paper addressing the joint employment of household domestic workers. All of those documents are available on the WHD’s website.

For the past several years, the WHD has pursued strategic enforcement against employers in certain targeted industries, including agriculture, day care, hospitality, garment manufacturing, guard services, health care, janitorial services, and temporary help. Although employers in those industries may not be specifically targeted, the WHD has devoted significant resources to overseeing “low wage” industries as long as I have been involved in WHD enforcement. Thus, I expect the agency to continue to spend a lot of enforcement time in those areas.

Refresher on Motor Carrier Exemption

Employers frequently face litigation involving improper application of the Fair Labor Standards Act’s (FLSA) Motor Carrier Exemption. Because there have been some changes in the criteria for this overtime exemption, an overview of the updated requirements is in order.

Section 13(b)(1) of the FLSA provides an overtime exemption for employees whose qualifications and maximum hours of service are regulated by the U.S. Department of Transportation (DOT) under Section 204 of the Motor Carrier Act of 1935. The Section 13(b)(1) overtime exemption applies to employees who are:

  1. Employed by a motor carrier or motor private carrier;
  2. Drivers, driver’s helpers, loaders, or mechanics whose duties affect the safety of operation of motor vehicles in transportation on public highways in interstate or foreign commerce; and
  3. Not covered by the Small Vehicle Exception (described below).

The driver’s, driver’s helper’s, loader’s, or mechanic’s duties must include the performance of safety-affecting activities on a motor vehicle used in transportation on public highways in interstate or foreign commerce. That includes transporting goods that are on an interstate journey even though the employee may not actually cross a state line. Further, safety-affecting employees who haven’t made an actual interstate trip may still meet the exemption’s duties requirement if they could, in the regular course of their employment, reasonably have been expected to make an interstate journey or could have worked on the motor vehicle in such a way as to be safety-affecting. An employee can also be exempt for a four-month period beginning on the date he could have been called upon to, or actually did, engage in the carrier’s interstate activities.

Small Vehicle Exception. In 2007, Congress passed a Small Vehicle Exception that severely limits the Motor Carrier Exemption, especially for small delivery vehicles such as vans and SUVs. The Small Vehicle Exception covers employees who work, in part or in whole, as a driver, driver’s helper, loader, or mechanic affecting the safety of operation of motor vehicles weighing 10,000 pounds or less in transportation on public highways in interstate or foreign commerce, except vehicles:

  1. Designed or used to transport more than eight passengers (including the driver) for compensation;
  2. Designed or used to transport more than 15 passengers (including the driver) and not used to transport passengers for compensation; or
  3. Used in transporting hazardous materials and requiring placarding under regulations prescribed by the DOT.

Under the Small Vehicle Exception, the Section 13(b)(1) exemption does not apply to an employee in any workweek that he performs duties related to the safety of small vehicles, even though his duties may also affect the operational safety of motor vehicles weighing more than 10,000 pounds—or other vehicles listed in Subsections (a), (b), and (c) above—in the same workweek. For example, a mechanic who normally spends his time repairing large vehicles is not exempt from overtime in any week he works on a small vehicle weighing less than 10,000 pounds. One federal court, confirming the WHD’s position, ruled that when determining whether a vehicle pulling a trailer meets the 10,000-pound requirement, the employer must consider the combined weight of the vehicle and the trailer.

Exception for safety-affecting employees. The Section 13(b)(1) overtime exemption also doesn’t apply to employees who aren’t engaged in “safety-affecting activities,” such as dispatchers, office personnel, workers who unload vehicles, or employees who load but are not responsible for the proper loading of vehicles. Only drivers, driver’s helpers, loaders who are responsible for proper loading, and mechanics working directly on motor vehicles to be used in transporting goods in interstate commerce can be exempt from the overtime provisions of the FLSA under Section 13(b)(1). Further, the overtime exemption doesn’t apply to employees of noncarriers, such as commercial garages, companies that maintain and repair motor vehicles owned and operated by carriers, or companies that lease and rent motor vehicles to carriers.

Review now, save later. Employers that operate motor vehicles should carefully review how they pay drivers, driver’s helpers, loaders, and mechanics to make sure they are in compliance with the FLSA. Failure to comply with the law can result in significant overtime liability.

Lyndel Erwin is a contributor to Alabama Employment Law Letter.  After more than 35 years of experience with the Department of Labor, Erwin became a consultant with Lehr Middlebrooks Vreeland & Thompson, P.C., where he assists attorneys in providing clients with analysis and consultation concerning all of the laws and regulations enforced by the Wage & Hour Division of the U.S. Department of Labor. He may be contacted at lerwin@lehrmiddlebrooks.com.