Authored by Kevin Young

In a move that could substantially impact businesses employing drivers and treating them as exempt from federal overtime requirements, the U.S. Department of Labor (the “DOL”) has narrowed its view of the Motor Carrier Exemption (the “MCE”) to the Fair Labor Standards Act (the “FLSA”), as set forth under 29 U.S.C. § 213(b).  The move, which the DOL announced in Assistance Bulletin 2010-2, will essentially require employers relying on the MCE to more persistently evaluate its applicability to their employees.

As a general matter, the MCE exempts from federal overtime requirements employees over whom the Secretary of Transportation has power to set qualifications and maximum hours.  As written, it exempts drivers, driver’s helpers, loaders, and mechanics whose work affects the safe operation of certain vehicles in interstate commerce.  Qualifying vehicles include those: (a) weighing over 5 tons; (b) designed to transport either (i) more than 8 individuals, for pay, or (ii) more than 15 individuals; or (c) used to transport certain hazardous materials.

Until now, the DOL’s position has been that the MCE applies to employees in four-month increments from the time that they perform, or could be asked to perform, the exempt work.  Rooted in DOT authority and endorsed by many courts, this stance was relatively generous for employers using the MCE, as a day-by-day review of the vehicle driven or worked upon by each employee is not necessary.  In light of recent amendments to Congress’s SAFETEA-LU legislation, however, the DOL has now changed course, explaining that the MCE cannot apply in a workweek in which an employee’s work is on a non-qualifying vehicle. 

To illustrate, suppose a freight company employs a pool of drivers, any of whom may be called upon to drive a truck weighing over 5 tons to transport goods to a site in another state.  Even after the DOL’s guidance, those drivers are, as a general matter, exempt from overtime requirements for a four-month period.  However, if a driver from the pool is asked to work on one of the company’s 2-ton pickup trucks, even for a day, then she is nonexempt for that week and must receive overtime pay for hours worked over 40, regardless of what trucks she works on the rest of the week, month, or year.

In sum, employers relying upon, or considering relying upon, the MCE should remain cognizant of these developments.  While the four-month rule remains in effect, the range the DOL once afforded it has no doubt been narrowed, perhaps requiring a daily qualification of the MCE for certain employees.  Although it remains to be seen how much weight, if any, a federal court will place on the guidance, its authority in the case of a DOL investigation is quite clear.