Are Commercial Truck Drivers Exempt from Overtime Pay?

Some drivers may be entitled to overtime pay based on their job duties and other factors, but most commercial truck drivers do not receive overtime pay.

In any industry, an employee may be misclassified as a contractor. In some cases, employers do this on purpose as a way to get out of paying benefits to a worker. Many truck drivers may wonder if they have been classified correctly and if they are eligible for benefits such as overtime pay.

How Are Truck Drivers Paid?

Unlike in other fields, truck drivers often don’t receive overtime pay. Hourly pay is far more common for local drivers. Delivery truck drivers had a median pay of $16.51 per hour in 2020, according to the Bureau of Labor Statistics, while a light truck driver’s median pay was $17.81 per hour. Heavy truck drivers or over-the-road drivers who are paid hourly reportedly earned a median hourly rate of $22.66.

Although hourly pay is common in many industries, it’s not as widely applicable in the trucking industry. Due to federal regulations governing the amount of time truck drivers can drive at a time, or in a workweek, some truckers find that hourly pay is not as lucrative.

Instead of being paid by the hour, most drivers are instead compensated on a per mile basis. Compensation may vary from $0.28 to $0.40 per mile, although some drivers are paid as much as $0.45 per mile, All Trucking reports. Drivers are expected to travel between 2,000 and 3,000 miles per week. Per mile wages are easier to track than hourly wages, but can be affected by the weather, traffic, speed limits, and other factors.

In some cases, truckers may be paid a flat salary rather than by the hour or mile. Salaries depend on the amount of experience a driver has, but are usually associated with better benefits than other types of payment.

Some other factors affect truck driver pay, such as the type of load they carry. Drivers who specialize in heavy hauling, cattle transport, hazard materials, or other niche transportation categories may be paid more than other drivers due to the knowledge and licensure required. Pay rates will also depend on whether or not a driver drives in state, regionally, or over the road.

Are Truck Drivers Entitled to Overtime Pay?

Some route drivers may be entitled to overtime pay, but other truckers may not be.

Under the federal Fair Labor Standards Act (FLSA), some truck drivers are exempt from overtime. In order to be exempt from this extra pay, the following must apply to a truck driver:

• They must be employed by a motor carrier or private motor carrier.
• They must perform the duties of a driver, driver’s helper, loader, or mechanic whose duties affect the safety of operating motor vehicles while transporting items.
• They must not be covered by the small vehicle overtime exemption (works with a vehicle weighing 10,000 pounds or less).

If all of these conditions do not apply, a driver may be entitled to overtime pay.

How California Law May Affect Trucker Overtime

There has been an ongoing debate among employers, truckers, and state regulators over how drivers should be classified under California labor laws. A new law, AB 5, had the potential to shake up the trucking industry, qualifying many more independent contractors, including truckers, as employees entitled to overtime.

However, the trucking industry pushed back, filing a lawsuit against the state over the law. In January 2020, a federal judge issued a restraining order on the state, stopping them from enforcing AB 5 against trucking companies while the lawsuit was pending.

Since then, a state court judge has ruled that federal labor laws do not preempt California law. The ruling, made in November 2020, brings AB 5 and the concept of truckers with employment rights, such as overtime, one step closer to reality, Freightwaves reports.

However, another state law, the voter-enacted Proposition 22, may throw a wrench into AB 5. According to The Trucker, Prop 22 was an initiative backed by rideshare giants Uber and Lyft, as well as independent contractor drivers, that allows companies to classify workers as independent contractors under loosened circumstances than under AB 5.

While Proposition 22 targeted rideshare drivers, legal experts pointed out to The Trucker that the voter-passed initiative pokes another hole in the applicability of AB 5. It remains to be seen how trucker classification will be hashed out in California and if overtime pay may become reality for those working in the industry.

What’s The Difference Between a Contractor and an Employee?

An employee is subject to their employer’s schedule and is required to perform their duties in accordance with company policies. When they are hired, they fill out Form W2, and state and federal income, FICA (Social Security) and Medicare taxes are withheld from their pay. Generally, benefits such as health coverage and retirement are part of an employee’s compensation. It is the employer’s responsibility to furnish workers with the tools and equipment required to carry out their tasks.

In order to be considered an independent contractor, a worker must be allowed to carry out their assigned job duties without direct supervision and work on their own schedule. They are not subject to set hours, and are free to complete their tasks in a manner that best suits them.

When a worker is hired on a contract basis, they are required to fill out a Form 1099. This is how their employer reports the amount they are paid for your work. No taxes are withheld from their pay; this is their responsibility, and generally, independent contractors make tax payments on a quarterly basis. As an independent contractor, they are also on their own when it comes to things such as health insurance, retirement, disability, etc. and are expected to provide their own equipment (in this case, the vehicle) and pay their own fuel and maintenance costs.

The advantage of being a contractor, in this case, is that virtually all of these job-related expenses are tax-deductible; with advance planning, most independent contractors pay little in income tax.

What Does Classification of Commercial Truck Drivers Have to Do with Overtime Pay?

Over the last ten years, more and more truck drivers have been classified as contractors as opposed to employees, according to Transport Topics. The news source goes so far as to call this a “fundamental shift” in the trucking industry.

More truck drivers are owner-operators of their own truck who then use their vehicle to transport a company’s items; others are simply contractors, using the company’s equipment.

This shift reportedly was made so that the companies could save money. Contractors do not receive benefits from an employer and have to insure themselves against damage and disability, among other things. This means that contractors are in charge of many costs that an employer would be in charge of for an employee. It also means that the employer does not have to pay a contractor overtime pay.

Unfortunately, according to the Department of Professional Employees, a company’s incentives for classifying a commercial truck driver as a contractor are many — the Department for Professional Employees notes that the tax savings of classifying a worker as an independent contractor rather than an employee “as well as savings from income and Medicare taxes results in employers saving between 20 to 40 percent on labor costs.”

This has taken a toll on truck driver benefits, including overtime. Whereas employees are entitled to benefits like workers’ compensation and overtime, contractors are technically their own employers, and not entitled to the same.

This means that a contractor may have to work long hours for no additional pay, if they are paid on a per-job basis, or for not much more money, if they are paid hourly.

A driver might be misclassified if they are treated the way an employee is treated — if they are subjected to extensive oversight, or are required to complete a job in a way required by their employer, as opposed to how they see fit.

The problem of employee/contractor classification is particularly common in the trucking industry. Some drivers may be misclassified and may be incorrectly denied overtime without their knowledge.

Are All Commercial Truck Drivers Exempt from Overtime Pay?

Truckers who are contractors or owner-operators are not eligible for overtime. Because more and more truck drivers are classified as independent contractors, fewer and fewer are entitled to overtime. In some cases, businesses may attempt to misclassify someone who should be classified as an employee to avoid paying that driver overtime.

Additionally, even if a commercial truck driver is an employee, they may not be eligible for overtime pay. The Fair Labor Standards Act is the law that guarantees overtime pay to many workers.

However, the same law has a Motor Carriers Exemption, which says that “any employee with respect to whom the Security of Transportation has the power to establish qualifications and maximum hours” is not guaranteed overtime pay, says Ask the Trucker.

Are There Cases in Which the Motor Carriers Exemption Might Not Apply?

Ask the Trucker goes on to explain that in some cases, states may have laws that differ slightly from federal laws. In these cases, state law might be better for a worker and may give them more protection than a federal law could.

An appellate court in New Jersey made a decision in a commercial truck driver overtime pay lawsuit that set a precedent that if a state and federal law conflicted, a worker should be given protections of the law that gave them the most generous protections. So, though there is a Motor Carriers Exemption, you might still be eligible for overtime depending on your state of residence.

Additionally, if you drive armored trucks, snow plows, salt trucks, tow trucks, or water trucks, you may still qualify for overtime under the Fair Labor Standards Act, because the Motor Carriers Exemption may not apply to you.

Truckers who believe they are entitled to overtime but are not being paid these extra wages may want to speak to a qualified wage and hour attorney. These drivers may be able to seek compensation from their employers for unpaid wages as part of a trucker wage and hour lawsuit or class action lawsuit.

Filing a lawsuit can be a daunting prospect, so Top Class Actions has laid the groundwork for you by connecting you with an experienced attorney. Consulting an attorney can help you determine if you have a claim, navigate the complexities of litigation, and maximize your potential compensation.

Join a Free Trucker Overtime Class Action Lawsuit Investigation

If you have worked as a contract truck driver and believe your carrier has failed to pay you minimum wage or overtime, or otherwise might not have honored a contract with you, you may qualify to file a truck driver lawsuit or class action lawsuit.

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