OUR THOUGHTS ON:

Transportation Employee Overtime Exemption Limited

Transportation & Logistics

By Stephanie Vanscavish

The Department of Labor (DOL) issued a memorandum that clarifies the effect of The Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) on transportation industry personnel. SAFETEA-LU limits the Motor Carrier Act exemption for the transportation industry. Previously under the Fair Labor Standards Act (FLSA), an overtime pay exemption was allowed for people involved with “motor vehicles” when both the employer and the employee met FLSA requirements. This broad description allowed the exemption to be taken for numerous employees in the transportation field.

With the passage of SAFETEA-LU and clarification from the DOL, the exemption is now limited to personnel involved with commercial motor vehicles, which significantly decreases the number of employees who qualify for the exemption. The DOL explains that to be considered a commercial motor vehicle, the vehicle must:

  • Have a gross vehicle weight or gross vehicle weight rating of at least 10,000 pounds, or
  • Be designed or used to transport more than 8 passengers (including the driver) for compensation, or
  • Be designed or used to transport more than 15 passengers (including the driver) and not be used to transport passengers for compensation, or
  • Be used in transporting hazardous material, requiring placarding under regulations prescribed by the Secretary of Transportation.

With this change, many employees who were once exempt under the FLSA are not eligible for the overtime exemption. Ensure that your transportation industry clients have changed their employees’ status to reflect the new exemption rules.

For further information, please contact John Popies.

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