New guidance issued by the U.S. Department of Labor on trucking wage compensation could provide millions of dollars in wage and litigation relief for employers while drivers could see cutbacks in pay.
The department’s Wage and Hour Division issued an opinion letter on July 22 changing its stance on employers’ pay obligations to drivers for time spent while drivers are in the sleeper berth.
Under prior guidance, the division interpreted the relevant regulations to mean that while sleeping time may be excluded from hours worked (and thus ineligible for pay), only up to 8 hours of sleeping time could be excluded in a trip 24 hours or longer, and no sleeping time may be excluded for trips under 24 hours, according to the Department of Labor.
But the wage division has found that this interpretation “is unnecessarily burdensome for employers and instead adopts a straightforward reading of the plain language of the applicable regulation, under which the time drivers are relieved of all duties and permitted to sleep in a sleeper berth is presumptively non-working time that is not compensable.”
The opinion letter noted, however, that there may be times where a driver who retires to a sleeping berth is unable to effectively sleep or use the time for other personal reasons – when required to remain on-call or must do required paperwork, for example. “In such cases, the time is compensable hours worked,” the division stated.
The American Trucking Associations (ATA) welcomed the opinion, maintaining that it’s consistent with “decades-old” Department of Labor regulations as well as a long-held understanding by the trucking industry. The association pointed out that the letter also clears up confusion created by recent court decisions calling into question how trucking companies compensate for sleeper berth time.
One of those cases was filed last year against P.A.M. Transportation Services Inc. (NASDAQ: PTSI), in which a federal district court ruled that sleeping time above 8 hours constituted hours worked for which a driver should be compensated.
“ATA also commends the Department for making guidance like this available through opinion letters, which provide an opportunity for stakeholders to better understand their compliance obligations prospectively, rather than settling such matters only after the fact, through costly and wasteful litigation,” ATA president and CEO Chris Spear said in a statement.
Todd Spencer, president of the Owner-Operator Independent Drivers Association, whose members include independent contractor drivers that stand to lose from the new interpretation of the law, said the opinion highlights the need for removing the truck driver exemption in the Fair Labor Standards Act.
“A primary duty of a truck driver’s job is waiting, but unfortunately they are paid by the mile and nothing for their time,” Spencer said in a statement. “If drivers were simply paid for all time worked, this issue would not likely have been brought to court.”