Exemptions are on the Wage & Hour Division’s hot list—and that means they should be on yours, too. In today’s Advisor, we’ll cover the slippery issue of the motor carrier exemption.
For help with this tricky exemption, we turned to BLR’s Wage & Hour Compliance—Practical Solutions for HR. It says that the FLSA provides an overtime exemption for employees who:
- Are employed by a motor carrier or motor private carrier; and
- Perform duties that affect the safe operation of commercial motor vehicles in transportation on public highways in interstate or foreign commerce.
To determine whether this exemption applies, the employer must answer yes to all three questions below:
1. Are you a motor carrier or motor private carrier?
In general, a motor carrier is a person (or entity) that provides motor vehicle transportation for compensation. The term
transportation includes:
- Any motor vehicle, vessel, property, instrumentality, or equipment that is in any way related to the movement of passengers, property, or both; and
- Various types of services related to the movement of passengers or property.
A “motor private carrier” is a person that transports property that he owns, leases, or bails for the purpose of sale, lease, rent, bailment, or to further a commercial enterprise.
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2. Does the employee perform duties that affect the safe operation of a commercial motor vehicle?
Employees meet this requirement only if they perform—or could in the regular course of employment reasonably be expected to perform—the following types of services:
- Drivers and driver’s helpers if they: (1) drive interstate routes or could reasonably expect to be called upon to do so, or (2) carry interstate goods in intrastate routes;
- Loaders (also called dockmen, stackers, or helpers) if they have responsibility for exercising judgment and discretion in planning and building a balanced load or in placing, distributing, or securing freight that ensures the safe operation of the vehicles in interstate or foreign commerce; and
- Mechanics whose activities directly affect the safety of operation of motor vehicles. In general, this means that the employee must perform repair or maintenance work on the vehicle itself as opposed to its parts.
The exemption does not apply to employees whose activities do not affect safety (such as dispatchers or servicemen who do nothing but oil, gas, grease, or wash vehicles).
Finally, the motor carrier exemption applies regardless of the proportion of time an employee actually spends on safety-affecting activities, assuming that it is not de minimis.
Example: Barry is an account manager for BizSmart furniture. He frequently drives out of state for training and meetings. On many of those trips, he kills two birds with one stone by driving a delivery truck and delivering large pieces of furniture and equipment to customers in the other state. Barry qualifies as a driver covered by the exemption even though making deliveries is not a substantial part of his job.
Example: A group of dockworkers sued their employer for unpaid overtime. One of their main duties was to load trailers, a task that required them to independently decide how to block freight and load it high and tight and to prepare diagrams to help safety workers reach hazardous cargo in the event of an accident.
They argued that their activities did not satisfy the “safe operation” requirement because their supervisor checked each trailer before it left the dock. A court disagreed, stating that the workers were exempt “loaders” under the Motor Carrier Act because they generally exercised their own judgment and discretion regarding how to safely load the trailers.
All you need to avoid exempt/nonexempt classification and overtime errors, now in BLR’s award-winning FLSA Wage & Hour Self-Audit Guide. Find out more.
3. Is the commercial motor vehicle operated on a public highway in interstate or foreign commerce?
In general, an employee is covered by the exemption if the motor vehicle on which he or she performs safety-affecting activities:
- Is in interstate commerce—which means it actually crosses state or international lines; or
- Never leaves the state but what is being transported is actually moving in interstate commerce. The fact that other carriers transport it out of or into the state is not material.
In tomorrow’s Advisor, the seven most common misclassification mistakes, plus an introduction to BLR’s unique checklist-based FLSA audit guide.
Of course, your state law might not have such an exemption.
Does anyone have information on how this applies to the armored car industry? It appears they are using this exemption as a loop hole. Can money, checks be considered interstate commerce if the trucks do not cross state lines?