Change in Law Limits Overtime Exemption for Employees Involved with Transportation

In May of this year, the Department of Labor (DOL) issued a memorandum that significantly limits the Motor Carrier Act exemption for employees involved with the transportation industry. The Fair Labor Standard Act's (FLSA) motor carrier exemption has two basic requirements: 1) the employer must be a carrier under the Motor Carrier Act; and 2) the employee must be covered by the Motor Carrier Act. DOL regulations provide that the exemption depends "both on the class to which his employer belongs and on the class of work involved in the employee's job."

The DOL explains that the FLSA provides an overtime pay exemption, but not a minimum wage exemption, for any employee to whom "the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to Section 204 of the Motor Carrier Act (MCA)." This exemption applies to any "driver, driver's helper, loader, or mechanic employed by a carrier, and whose duties affect the safety of operation of motor vehicles on the public highways in interstate or foreign commerce."

For years, this exemption applied to employees who either drove or worked with "motor vehicles." With the passage of The Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users (SAFETEA-LU), the exemption now applies only to "commercial motor vehicles." A “commercial motor vehicle” is defined as a vehicle used on the highways in interstate commerce to transport passengers or property if it:

1) has a gross vehicle weight rating or gross vehicle weight of at least 10,001 pounds, whichever is greater; or

2) is designed or used to transport more than 8 passengers (including the driver) for compensation; or

3) is designed or used to transport more than 15 passengers, including the driver, and not used to transport passengers for compensation; or

4) is used in transporting hazardous material, requiring placarding under regulations prescribed by the Secretary of Transportation pursuant to Title 49 section 5103.

The DOL explains that with this change, many employees, such as mechanics, who once were covered by the motor carrier exemption, are no longer eligible and must be paid for all overtime worked. For example, a driver or mechanic of a pickup or moving van may have been covered by this exemption. Now, those employees will only be covered if they satisfy the requirements of the exemption and either drive or work on vehicles included in the new definition of commercial motor vehicles.

Employers, who have previously taken advantage of the motor carrier act exemption, should review the status of their transportation employees to insure the exemption remains applicable.

Michael Dalrymple is an Associate in the Firm's Labor Section. His practice includes a wide variety of employment litigation and a focus on issues arising under the Fair Labor Standards Act.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.