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Motor Carrier Exemption

FLSA Motor Carrier Exemption

The federal Fair Labor Standards Act (FLSA) covers most employers in the United States. It requires them to pay minimum wage and overtime to most employees, subject to some exceptions. In addition to the general “White Collar” exemptions, the FLSA also establishes some industry or job-specific exemptions. One of these is the “motor carrier exemption” from the FLSA overtime pay requirements.

[Click here for more on the industry-neutral Administrative, Executive, Outside Sales, and Professional exemptions.]

Motor Carrier Exemption

The FLSA’s overtime provisions do not apply to employees subject to the motor carrier exemption found in section 13(b)(1) of the act. This exemption applies only to certain employees subject to maximum hours requirements set by the Secretary of Transportation. These are employees who are:

  1. Employed by a motor carrier or motor private carrier;
  2. Drivers, driver’s helper, 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.

What Is a “Motor Carrier”?

An employer qualifies as a “motor carrier” if it provides motor vehicle transportation for compensation.

“Transportation” includes movement of either passengers or property, and services related to that movement.

The exemption also applies where the employer is a “motor private carrier”. These are “persons other than motor carriers transporting property by motor vehicle if the person is the owner, lessee, or bailee of the property being transported, and the property is being transported for sale, lease, rent, or bailment, or to further a commercial enterprise.”

In applying the motor carrier exemption, it’s often not necessary to distinguish between “motor carriers” and “motor private carriers.”

Which Employees Qualify?

Drivers, driver’s helpers, loaders, and mechanics might qualify for this exemption. However, even workers in these categories must actually perform “safety-affecting activities” on a motor vehicle used for transportation on public highways in interstate or foreign commerce. They need not do that work all the time. It can be just part of their jobs, as long as it’s not a trivial or de minimis aspect of their duties.

The transportation involved must include interstate commerce. This usually means that the transportation must (1) cross state or international lines or (2) connect with an intrastate rail, air, water, or land terminal and continue an interstate journey of goods that have not come to rest at a final destination.

The safety-affecting employees do not have to travel out-of-state themselves. The exemption can still apply to an employee so long as the employer is involved in interstate commerce and the employee could reasonably be expected to make an interstate trip or work on a motor vehicle that is safety-affecting.

The motor carrier exemption applies for 4 months from the date the employee last could have been called on to or actually did engage in a motor carrier’s interstate activities. An employee continually involved in such activities retains the exemption perpetually (unless/until changing to non-exempt work for a period of 4 months or more).

Small Vehicle Exception

Yes, there is a critical “exception” to this “exemption”. If the exception applies, then the employer must pay overtime for time worked beyond 40 hours in a week even to employees who would have otherwise met the exemption requirements.

The exemption does not apply in any week where the employee’s work as a drive, driver’s helper, loader, or mechanic affecting the safety of operation of motor vehicles in transportation on public highways in interstate or foreign commerce includes work on small vehicles weighing 10,000 pounds or less.

But wait, there’s even an exception to the exception (to the exemption)!

The small vehicle exception does not apply if the small vehicles involved only include vehicles:

  • designed or used to transport more than 8 passengers, including the driver, for compensation;
  • designed or used to transport more than 15 passengers, including the driver, and not used to transport passengers for compensation; or
  • used in transporting hazardous materials, requiring placarding under Department of Transportation regulations.

In other words, weight isn’t the only factor in determining whether a vehicle is “small.” Its function is also relevant.

When an employee does work on a small vehicle, the exemption could be lost for that week even if the employee also works on other “larger” vehicles in the same week. (Note: this issue is still somewhat unsettled as a matter of law.)

Who’s Not Exempt?

The motor carrier exemption does not apply to employees of non-carriers. This includes commercial garages and other companies that maintain and repair motor vehicles even if motor carriers own or operate the vehicles. It likewise does not apply to employees of companies that lease or rent motor vehicles to carriers (unless the employer itself is separately also a motor carrier).

The motor carrier exemption also does not apply to employees not directly working in “safety-affecting activities”. Thus, dispatchers, office personnel, and even loaders who are not responsible for proper loading do not fall under the exemption. In other words, they’re eligible for overtime pay (unless a different exemption applies).

Don’t Forget State Law

Remember, the FLSA is a federal law. It applies throughout the United States. But there are also state laws that address minimum wage and overtime requirements. As with other FLSA exemptions, the motor carrier exemption might not excuse an employer’s state law overtime obligations. Accordingly, motor carriers must separately review and apply any state overtime laws in tandem with the FLSA to avoid liability for unpaid overtime.

 

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