Do Drivers of Armored Cars Qualify for Overtime Compensation?

The Bloomberg BNA Payroll Library gives you reliable, up-to-date guidance and analysis in every area of payroll administration and compliance, and includes hundreds of interactive forms and links to related federal, state, and local sites.

By K.W. Mitchell

“You owe me overtime pay,” said Stacy, a truck driver for a courier company. “The law may not allow overtime pay to some drivers, but I'm covered under an exception to the rule.”

“I'm sorry, but we do not owe you overtime wages,” said Greg, the company's payroll director. “There's an exemption under federal law that was established specifically for workers like you.”

FACTS: The driver of an armored truck worked at a courier company for about a year. Her duties consisted of either driving an armored vehicle or riding as a passenger to ensure security.

She spent 51 percent of her time working with vehicles that weighed more than 10,000 pounds and 49 percent of her time working with vehicles lighter than 10,000 pounds.

She was compensated on an hourly basis and often worked more than 40 hours a week, for which she was paid at her regular rate.

After leaving the company, the employee filed a lawsuit claiming that she was owed overtime wages for her time spent working more than 40 hours in a workweek, under the Fair Labor Standards Act.

The company said the driver fell under the Motor Carrier Act exemption under the FLSA, which exempts some trucking company employees from overtime compensation.

The driver disagreed, saying that she instead was covered by an exception and was due overtime wages for hours spent working in excess of more than 40 hours in a workweek.

A federal district court ruled in favor of the driver, saying that she was owed overtime compensation. The employer appealed the ruling.

ISSUE: Was the truck driver exempt from overtime wages under the FLSA because of an exception to the Motor Carrier Act?

DECISION: The truck driver is to receive overtime compensation, a federal appeals court ruled, noting that overtime pay is required even if the Motor Carrier exemption would typically create an exception.

In 2008, Congress approved an exception to the Motor Carrier Act's exclusion from overtime compensation. A covered employee is one whose job “in whole or part affects the safe operation of vehicles lighter than 10,000 pounds, except vehicles designed to transport hazardous materials or large numbers of passengers,” the court said.

The driver of an armored car claimed that she was owed overtime wages despite coverage rules under the Motor Carrier Act.

The driver was within the definition of a covered employee because about half of the driver's trips were in vehicles weighing less than 10,000 pounds, the court said.

Some district courts have reached similar conclusions regarding the language of the 2008 Corrections Act, the appeals court said. Although other appeals courts “have yet to weigh in squarely on whether a Corrections Act ‘covered employee' is entitled to overtime,” other circuits also have noted the plain language of the Corrections Act, it said (McMaster v. Eastern Armored Servs., Inc., 3d Cir., No. 14-1010, 3/11/15).

POINTERS: Several types of transportation-industry employers are exempt from FLSA overtime requirements with respect to those employees actually engaged in transportation-related activities. A motor carrier generally refers to a company that employs drivers of large vehicles, such as semi-trucks and passenger buses.

Some motor carriers that are covered by the Motor Carrier Act are exempt from FLSA overtime provisions. There is, however, no exemption from FLSA minimum wage requirements. Motor carriers generally are excluded from FLSA overtime requirements because of the authority given the Transportation Department secretary under the Motor Carrier Act to regulate maximum working hours for employees of common and contract carriers of passengers and freight.

In general, the motor carrier exemption is available to employers when the carrier is engaged in interstate commerce as defined under the Motor Carrier Act; the employer is a carrier covered by the Motor Carrier Act; and the excluded employees must be involved in activities that directly affect the safety of operation of motor vehicles.

Employers seeking the motor carrier exemption should note that Department of Transportation regulations designate drivers, drivers' helpers, loaders and mechanics as the only employees whose work directly affects motor vehicles safety. Thus, only employees within these four categories are eligible for the motor carrier exemption.

Employers also should note that the Motor Carrier Act defines “interstate commerce” more narrowly than the FLSA. For example, drivers, assistants, loaders and mechanics who work within a state are considered to be engaged in interstate commerce under the FLSA. Yet employees who engage in strictly intrastate work would not be covered by the Motor Carrier Act. Thus, motor carriers who employ workers engaged in only intrastate activities are not eligible for the motor carrier exemption and must pay overtime for hours in excess of FLSA's statutory maximum.

For more information see PAG's “FLSA Exemptions” chapter.

This analysis illustrates how courts resolve pay-related disputes. The names and dialogue are fictitious.