Under the Fair Labor Standards Act (FLSA), certain employees are exempt from overtime pay if they qualify as bona fide executive, administrative, professional, outside sales, or computer employees. To be exempt from overtime requirements, employees must meet specified salary thresholds, with the current minimum set at $35,568, among other criteria.

The upcoming increase scheduled for July 1 follows the wage-threshold adjustment process outlined in the 2019 rule, as explained by Jessica Looman, administrator of DOL’s Wage and Hour Division, during a recent press call.

This method bases adjustments on the 20th percentile of weekly earnings of full-time salaried workers in the lowest-wage U.S. Census region. In January 2025, the increase will utilize an updated methodology based on the 35th percentile.

Looman indicated that the initial increase in July 2024 is projected to impact around 1 million workers, while the subsequent increase in January 2025 is estimated to affect approximately 3 million workers.

Additionally, a separate overtime exemption applies to certain highly compensated employees. According to Patrick Oakford, deputy assistant secretary for policy at DOL, the minimum salary threshold for these employees will rise to $132,964 on July 1 and to $151,164 on January 1, 2025.

The department reviewed over 33,000 public comments on the proposed rule, including input from the Society for Human Resource Management (SHRM), which urged a delay in the final rule’s effective date until 2025. SHRM argued that a 60-day period between publication and the effective date is insufficient for employers to assess and comply with the rule.

“This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time,” said Julie Su, acting secretary of labor. “Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay. That is unacceptable.”

Anticipation now turns to potential legal challenges in federal courts, where opposition to the rule is expected. While a judge for the U.S. District Court for the Western District of Texas previously rejected an attempt to overturn the 2019 rule, legal battles may continue. In Congress, a bill introduced by a Republican representative from Missouri seeks to block the new final rule, though it has not yet undergone committee review.

In the meantime, employer-side attorneys advise businesses to evaluate which positions will be affected by the updated thresholds and decide whether to convert impacted employees to hourly, nonexempt status with overtime pay or increase their salaries to surpass the threshold.

Source: Trucking Dive

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Senate Bill 3273, titled the Guaranteeing Overtime for Truckers (GOT) Act, introduced by Sen. Alex Padilla (D-CA), is currently in the hands of the Committee on Health, Education, Labor and Pensions. Its counterpart, House Bill 6359, referred to the House Committee on Education and the Workforce, has seen no progress.

“I think it is pretty simple and straightforward, for the same reason that a lot of other workers and a lot of other industries get paid overtime for their time and their work,” Padilla said. “Truckers deserve the same, but for reasons I don’t understand, the Fair Labor Standards Act of 1938 exempted many truckers from overtime protections, including overtime compensation.”

This stagnation is not unfamiliar to those well-acquainted with the intricacies of the trucking industry.

“The proposed overtime bill would force additional costs on the carrier and hope the carrier finds a way to pass on those costs to the shipper,” said Dave Williams, chairman of the Truckload Carriers Association (TCA) and senior vice president of equipment and government affairs for Knight-Swift Transportation. He says the legislation is, “a case of good intentions with unintended consequences.”

The International Brotherhood of Teamsters (IBT) has predictably expressed support for the bill, aligning with various advocacy groups.

“Truck drivers have been denied overtime protections for nearly 100 years,” said Sean O’Brien, IBT general president. “The Guaranteeing Overtime for Truckers Act rights this wrong and would end this inexcusable abuse to hundreds of thousands of drivers across the country.”

However, the practical implications of such legislation remain unclear, raising concerns about potential unintended consequences.

TCA Senior Vice President of Safety and Government Affairs David Heller shares apprehensions about possible repercussions.

“When you start looking at the unintended consequences of such a bill, the reality is going to be in today’s market,” he said. “Does that put carriers into a situation where maybe they start monitoring those hours and keep them at 40 hours?”

He, like others, worries about the adverse impact on the supply chain if driver hours are reduced. Addressing the question of where the added cost would be absorbed, particularly in the current freight market, remains a challenge.

“Where does the cost come from, especially in today’s freight market?” Heller said.

George O’Connor, Director of Communications and Government Affairs for the Owner-Operator Independent Drivers Association (OOIDA), sees the issue as one of fairness and safety.

“In addition to basic fairness and decency, our roads are more dangerous because truckers aren’t guaranteed overtime,” he said. “The system allows shippers and receivers to excessively detain truckers at loading docks.”

He suggests that changes in drivers’ working hours, pay structures, and shipping procedures would be just the beginning. Adjustments to carrier operations, freight rates, and contracts would be necessary to accommodate overtime pay. He emphasizes that safety could be enhanced if shippers and receivers compensated drivers more for detentions.

“The delays truckers face when waiting to be loaded or unloaded is proven to increase safety risks,” he explained. “If a truck spends just 15 minutes more than usual at a facility, it increases the accident rate by 6.2%. This results in over 6,500 more crashes per year.”

However, Heller and many others in the industry argue that the unintended consequences of the GOT Act could have negative safety implications. Limiting drivers to a 40-hour workweek could lead to traffic congestion, increased competition for parking spaces, and exacerbate the existing driver shortage.

“More trucks, more drivers, and more parking,” he said. “We already don’t have enough parking spaces.”

Complicating matters further is the recent Department of Labor (DOL) announcement of its Final Rule on the classification of independent contractors.

“Misclassifying employees as independent contractors is a serious issue that deprives workers of basic rights and protections,” said Julie Su, DOL’s acting secretary of labor. “This rule will help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned.”

This development adds another layer of complexity for the trucking industry, as independent contractors reclassified as employees would also be subject to changes in overtime law.

“The DOL ruling, or even AB5 in and of itself, is a threat to that business model that has been so rewarding, specifically in the truckload segment,” Heller said. “The majority of our industry started because one person had a dream to own their own business, purchased a truck, and started hauling freight. It’s that American Dream that these misclassification-type rules threatens.”

While both sides of the overtime pay debate emphasize the need for fair compensation for drivers, the future of the GOT bill appears uncertain, particularly in a year overshadowed by presidential races as it continues to languish in committee.

“I think it’s worth noting that nobody wants to see drivers get paid more than the industry itself,” Heller said. “I think you can look at recent history and see that salaries have gone up.”

Source: The Trucker

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While many workers are entitled to overtime pay after exceeding 40 hours per week, the Fair Labor Standards Act of 1938 currently excludes motor carriers from this requirement. Joining forces with a bipartisan initiative, Rep. Van Drew, of New Jersey’s 2nd congressional district, recently introduced the House version of the GOT Truckers Act.

“I’m a strong Republican,” said Van Drew. “I believe in Republican values, and I believe for the future of the country that we have to be strong. However, there are issues that cross barriers, and this is one of them. I welcome my Democratic colleagues on this because I think they also recognize the fairness issue. I believe in entrepreneurship. I believe in business. I believe in hard work, but I also believe in fairness. That’s the point of this bill, and that’s what I think appeals to people on both sides of the aisle.”

Both the House and Senate host versions of the GOT Truckers Act. Van Drew and Rep. Mark Takano, D-Calif., put forth HR6359, while Sens. Alex Padilla, D-Calif., and Edward J. Markey, D-Mass., presented S3273.

According to Van Drew, this legislation aims to acknowledge the value of a truck driver’s time. Many truckers devote 60 to 70 hours weekly without any additional compensation. Making the issue even worse, most drivers are paid by the mile, neglecting payment for job-related functions during parked periods.

“Let’s be fair,” Van Drew said. “Truckers are breaking their backs. They sincerely are what makes America move. Our country would be in a whole lot of trouble if we didn’t have truckers working for us every single day. When people don’t work hard, that’s up to them and maybe they don’t deserve to make a lot of money. But truckers do, and they deserve to be treated fairly and make a decent income.”

Backing the bill, the Owner-Operator Independent Drivers Association (OOIDA), an advocate for truck drivers’ rights, encourages its 150,000-plus members to reach out to their lawmakers.

“Ask your representative or senators to co-sponsor the Guaranteeing Overtime for Truckers Act,” OOIDA wrote. “The bill would eliminate this (FLSA) exemption and help truckers be fairly compensated for all the time they work. Not only would this legislation provide overtime pay to company drivers, but it will help lift compensation for truckers across the industry.”

For a convenient way to contact your lawmaker and petition for overtime for professional drivers, visit OOIDA’s Fighting For Truckers website.

Source: Land Line

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While this proposal doesn’t encompass truck drivers, the Owner-Operator Independent Drivers Association (OOIDA), an organization dedicated to championing the rights of truck drivers, seized the comment period as an opportunity to advocate for the removal of a long-standing overtime exemption that applies to motor carriers.

OOIDA’s primary objective is to amend the Fair Labor Standards Act of 1938, ensuring that truckers are entitled to receive overtime compensation when their weekly working hours exceed 40.

“The FLSA motor carrier exemption was originally enacted in 1938 to prevent truckers from working excessive hours but now prevents them from receiving adequate compensation in the modern trucking industry,” OOIDA wrote. “Ironically, this exemption is now part of the reason why drivers regularly work more than 40 hours a week.”

It’s important to acknowledge that a typical truck driver often logs up to 70 hours a week while being compensated based on mileage, which means the many hours spent refueling, inspecting equipment, or waiting to load and unload freight can go uncompensated.

OOIDA underscores the necessity of valuing a truck driver’s time. Under the current system, shipping and receiving facilities often lack incentives to expedite a trucker’s return to the road.

“While denying guaranteed overtime pay is first and foremost unfair to truckers, the motor carrier exemption also contributes to supply chain inefficiency,” OOIDA wrote. “For far too long, the trucking industry has generally only offered compensation for detention time if waiting times exceed two hours. But even this pay is not provided to all drivers. As a result, entities throughout the supply chain, including shippers, receivers, and others, lack a financial incentive to load and unload trucks in an efficient manner.”

In addition to communicating their concerns to the DOL, OOIDA has been instrumental in the creation of the Guaranteeing Overtime for Truckers Act, a legislative proposal designed to amend the FLSA and ensure that truck drivers are eligible for overtime pay. This bill was introduced in a prior congressional session and is expected to be reintroduced in the near future.

Under the DOL’s proposed rule, most salaried workers earning less than $1,059 per week, which equates to approximately $55,000 per year, would be guaranteed overtime pay.

Source: Land Line

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