Truckers’ overtime dispute involves use of federal exemption

A Kentucky trucking company recently reached a settlement in a lawsuit filed by truckers claiming they never received overtime pay despite not being qualified for the federal overtime exemption carved out for truckers.

Truck drivers for Beechmont, Ky.-based Clay’s Trucking have agreed to “an amicable resolution” with the company in a class-action lawsuit pursuing unpaid overtime wages. The dispute revolves around an intrastate operation that invoked a federal exemption from overtime pay reserved for interstate commerce.

The federal Fair Labor Standards Act requires employers to pay employees no less than time and one-half their regular pay rate for all time worked beyond 40 hours in a workweek. But the Motor Carrier Act exempts employees who fall within the jurisdiction of the U.S. Department of Transportation, including truckers who drive interstate.

However, Clay’s Trucking was an intrastate-only motor carrier. Its employees therefore did not qualify for the overtime pay exemption.

Although Clay’s Trucking is not federally required to register with the U.S. DOT, Kentucky state law does require intrastate carriers to obtain a U.S. DOT number. In its MCS-150 form, the trucking company only checked “Intrastate Non-Hazmat Carrier” when representing its operations. A screenshot from the Federal Motor Carrier Safety Administration’s Safety and Fitness Electronic Records (SAFER) from February 2022 reveals the trucking company was not registered for interstate operations.

Even if Clay’s Trucking could engage in interstate commerce, thereby exempting drivers from overtime pay, the lead plaintiff in the case and other truckers could not.

The truckers’ medical cards cleared them only for intrastate-only driving. Furthermore, Clay’s Trucking did not have insurance that provided coverage for interstate commerce.

On the other hand, the owner of Clay’s Trucking also owned two sister companies that were authorized to drive interstate: DC Trucking and DC Transport. All jobs that involved interstate commerce were directed to those companies, while Clay’s Trucking dealt exclusively with intrastate trucking.

The Motor Carrier Act’s overtime pay exemption applies to any employee that could “reasonably have been expected to make an interstate journey or could have worked on the motor vehicle in such a way as to be safety-affecting.” Considering that 1) Clay’s Trucking was never authorized for interstate travel and 2) Truckers never had medical clearance for interstate travel and 3) All interstate work went to the two sister companies, Clay’s Trucking drivers could never expect to engage in interstate commerce.

Per-ton pay rate

Calculating overtime pay is a bit more complicated in this case, as truckers were not paid a salary or hourly wage.

Rather, truck drivers received a percentage of the total amount paid for each load to Clay’s Trucking. The trucking company charged customers at a per-ton rate. Therefore, truckers’ pay was determined at a per-ton rate.

The truckers argued in their lawsuit that they should have been paid a higher per-ton rate for deliveries when working more than 40 hours per week. How the overtime pay dispute is being solved is unknown. Terms of the settlement have not been disclosed. Attorneys for both parties could not be reached for comment.

The lawsuit was filed in December 2020. As recently as February 2022, SAFER showed Clay’s Trucking as an intrastate-only carrier. The company has since changed its operation status to interstate, with its latest MCS-150 form filed in March 2023.

GOT Truckers Act

The issue of overtime pay for truckers is on the radar of some Congress members who find the exemption that was established nearly 90 years ago is outdated.

The Guaranteeing Overtime for Truckers Act, also known as the GOT Truckers Act, is currently being considered in the House and Senate. The one-sentence bill simply eliminates the overtime pay exemption for truckers from the Fair Labor Standards Act.

The Owner-Operator Independent Drivers Association, which represents the rights of truck drivers, supports the bill and is encouraging its approximately 150,000 members to contact their lawmakers.

Go to OOIDA’s Fighting For Truckers website for an easy way to contact your lawmaker. LL