Since the enactment of the Fair Labor Standards Act (FLSA) in 1938, the Department of Labor (DOL) and plaintiffs’ attorneys across the country have targeted employers who fail to strictly adhere to the FLSA’s requirement that employees be paid minimum wage and overtime. However, trucking companies have not been a major target for either the DOL or plaintiffs’ attorneys.
Perhaps the primary reason trucking companies have avoided DOL’s and the plaintiffs’ bar’s scrutiny is that the FLSA specifically exempts over-the-road trucking companies from paying overtime to certain truck drivers. To be exempt from overtime, drivers must be employed by a motor carrier or motor private carrier, their duties affect the safety of operation of motor vehicles in transportation on public highways, and the driver is not subject to the small vehicle exception (which generally applies to vehicles weighing less than 10,000 pounds). Because this overtime exclusion significantly lowers the potential pool of damages a plaintiff may recover in an FLSA lawsuit, it has, in turn, discouraged most plaintiffs’ attorneys from investigating and bringing FLSA suits against trucking companies.
Recently, however, some plaintiffs’ attorneys have been scrutinizing the mileage-based pay system many trucking companies use to pay truck drivers. Mileage-based pay systems are popular among long-haul, over-the-road trucking companies because it allows drivers to be paid under a “piece-rate” compensation system rather than on an hourly basis. Piece-rate compensation plans are perfectly legal so long as the rate of pay is high enough to ensure that the employee is paid at least minimum wage for all hours worked and overtime (if applicable).