The Grawe Gazette – General Counsel
Driver Pay Issues
By The Grawe Group, LLC, October 2021
Easy-to-Understand Pay = Driver Appreciation
As an industry we just got done showing our driver appreciation with giveaways, barbecues, shout-outs and more. Show your drivers and independent contractors you appreciate them every time you pay them by making your pay statements easy to understand. Put your pay rules in writing, make them clear and easy to understand to avoid disputes down the road. Review your pay rules and practices regularly so they remain accurate and current.
Common Driver Pay Mistakes
To show your appreciation for your fleet and prevent litigation, avoid common issues in the motor carrier/driver pay world.
- Pay for all work. As an industry we know mileage pay and percentage pay plus some accessorials are pay for all of the work drivers do: loading, securing, inspecting, completing load paperwork, FMCSR compliance, driving, stop offs, unloading, etc. But plaintiff lawyers today argue no, mileage pay/percentage pay only covers driving, not the other work. And some states (I bet you can guess which one leads the way… hint: it is west of Nevada…) explicitly state the driver must be paid for all work. Thus, you need to make sure you put it in writing the work for which your pay compensates them. If your mileage pay is supposed to be pay for inspecting the equipment, make sure you have paperwork with your drivers and your independent contractors that says your pay is pay for inspecting and all of the other work you expect. Get detailed.
- Pay at least minimum wage. This issue arises in the training context typically. Make sure the total amount you pay divided by the total hours worked each week is at least minimum wage (and be mindful of the growing number of state and local minimum wage levels that are higher than the federal minimum wage). Plaintiff lawyers will argue the correct divisor is all hours in the day if the driver is staying out overnight. You can usually beat back that argument (“usually” because courts have proven they can go rogue every once in a while), but to be safe you can evaluate your minimum wage pay threshold using a maximum 70-hour work week under the HOS. If your pay exceeds minimum wage in a 70-hour work week your minimum wage violation risk is low.
- Sleeper Berth Time. Plaintiff lawyers are trying to argue drivers should be paid for all time away from home, regardless of how the driver is logging the hours. Their argument is the driver is never actually free from duties, is always under the control of the carrier, and therefore is always working and must be paid for all time away from home. To beat back this argument make sure you document (and enforce this in reality) that the driver has no responsibilities toward the load or toward you (other than compliance with applicable laws) when they are logged off duty. You can require the driver to park the high value load in a secure location, but once parked and off duty, make sure they have no obligations. If you want to be even safer, you can go as far as to offer discounted hotel rooms (at their expense) so they have a sleeping option other than the truck. That further separates the off duty driver from any responsibilities for the load or the truck.
- Mileage Guides and Pay Rules. Document your pay rules and policies. What mileage guide are you using? What rules must the driver follow to get paid detention? If you are paying percentage, how do you calculate the percentage? Is it a percentage of all the revenue? Or just the linehaul revenue? All accessorial revenue, or just some? Documenting those rules and following them prevents disputes and helps you defend against those that do still come up.
- Deductions. Many states have restrictions on what employers can deduct from employee pay. For example, contrary to popular belief, most states do not allow an employer to unilaterally deduct truck damage from a driver’s wages even if the driver caused the damage. The driver, in most states, must give the employer permission after the fact. And on the independent contractor side federal law forces motor carriers to get written authorization from contractors for each type of settlement deduction. The takeaway: make sure you have written authorization, or clear authority under the law (e.g., employee withholding taxes) to deduct anything from driver pay or contractor settlements.
Ultimately, to minimize driver pay issues and show your driver appreciation maintain clear, easy-to-understand pay structure. Review your pay practices regularly to make sure what you say, what you wrote down, and what you actually do all line up. If you have any questions about your driver or contractor pay programs, we are happy to help.
A new Grawe Pod episode is now available! In our latest episode we discuss a topic that doesn’t get as much attention in the industry news as it should – vehicle maintenance. We talk about the debate between in sourcing and outsourcing, roadside service, and maintenance’s role in driver retention.
The Grawe Group, LLC is here to bring peace of mind to you and your business. We are a professional services firm focused on the transportation industry. With a team of experienced executives, we provide general counsel, executive leadership, and people development services for trucking and logistics companies. From legal and risk management matters, to operational, financial, and leadership challenges, the Grawe Group has the practical expertise in trucking and logistics to help you build sustainable success. www.thegrawegroup.com.
Check out the Grawe Pod, transportation’s general counsel podcast, for discussions on challenges industry leaders face in their business and how to address them. Now available on iTunes, Spotify, and other major podcast outlets!