Opinion: Congress and Truck Driver Pay
It has been suggested that Congress amend the Fair Labor Standards Act to regulate compensation for truck drivers. Some interest groups advocate a federal mandate that truck drivers be paid on an hourly basis, with overtime for service beyond 40 hours in a week, or that all drivers be paid for all on-duty time instead of only driving time. The advocates suggest that these changes would enhance highway safety.
In fact, they would not improve safety.
In passing the act in 1938, Congress sought to raise substandard wages, protect workers from excessive hours and create more jobs in the post-Depression era. The minimum wage and higher overtime pay requirements were mechanisms to achieve these objectives.
The rationale for the truck driver exemption is equally valid today. Truck drivers continue to be protected from substandard wages by the federal minimum wage law and from excessive work hours by Department of Transportation rules limiting their hours of service. In fact, DOT’s rules — maximum 60 hours in seven days and 70 hours in eight days — are more restrictive than fair labor standards, which do not prohibit work after a certain time span.
Congress appropriately entrusted DOT with the role of regulating driver hours to promote highway safety and reasonable working conditions while meeting the needs of the trucking business and its customers. Congress also realized that an exemption from the overtime-pay requirement was warranted, since DOT, which is required to analyze the costs and benefits of any revision of the hours-of-service rules, would ensure safety and fair working conditions under its transportation policies.
The Fair Labor Standards Act does not require a specific method of payment, and for good reason. Each business uses various means of compensation and incentive, based upon job functions. Some employees receive a salary, and others are paid an hourly wage; some receive a commission, and others may be paid by piece or project. Trucking is no different in this respect. Some drivers are paid an hourly rate — typical for local driving and pickup and delivery. Long-haul drivers usually are paid by the mile, and in some cases they get an additional hourly wage for nondriving time or a fee for delivery. Independent contract drivers, who are not employees but lease their services and tractor to a trucking company, are often paid a percentage of revenue from the trip.
The application of overtime pay laws to truck drivers would not enhance highway safety, which is the principle rationale used by its advocates. They suggest that overtime pay would increase driver compensation and thereby result in reduced work time for each driver.
There are a number of flawed assumptions in this suggestion.
First, it assumes that truck drivers are not receiving reasonable compensation today. This is inaccurate. A truck driver earns, on average, $35,456 annually. Ten percent of drivers make more than $50,000 through working up to the maximum hours of service. Over the last several years, driver compensation has risen faster than the rate of inflation. Each year, approximately 320,000 truck drivers change employers to increase their compensation or to obtain enhanced work schedules. At least another 80,000 driver positions remain unfilled. Employment opportunities, levels of compensation and working conditions in trucking today are dramatically different than in the post-Depression economy that gave rise to the overtime pay law. Over half a century ago, there was a scarcity of jobs, which limited workers’ wages, and overtime pay was viewed as one way to address this problem. Today, truck drivers are in demand, and their wages and benefits keep rising. While compensation is important in recruiting and retaining drivers, it is only one factor in an overall package that also includes job benefits and the quality of the driver’s work schedule.
Competition for drivers ensures reasonable compensation.
It is also erroneous to assume that safety would be enhanced by a federal mandate of overtime pay. There is no research to support this proposition. Trucking safety is most influenced by management’s commitment to safety, driver experience, training, road and weather conditions, vehicle maintenance, law enforcement and the level of understanding by the motoring public of how to share the road with commercial vehicles.
It would be foolhardy and impractical to try to regulate compensation levels through overtime pay in trucking. In this highly competitive industry, pricing and wages are influenced by the economy and the marketplace. The imposition of overtime pay would cause a reduction in the base rate of pay, or an increase in the use of independent contractor drivers, or a decrease in employment — or a combination of these results.
Congress should not require trucking employers to establish dual methods of compensating for driving and nondriving time. Truck drivers paid by the mile are reasonably compensated for their total work time. Nondriving time is a variable that is influenced by a number of factors, including the efficiency of the operations of the customers who tender and receive the freight. This situation is no different than commissioned sales work. A person who receives a commission faces varying transaction times and benefits more when the sale is completed quickly. The fixed commission provides compensation based on the average time spent. The mileage pay method is similar.
In sum, there is no need for Congress to apply the overtime pay law to interstate truck drivers. The minimum wage provision of the Fair Labor Standards Act and the DOT hours-of-service rules ensure reasonable compensation and working conditions. Current driver compensation methods and levels do not adversely impact highway safety. Congress has never legislated the method of compensation for any industry and should not do so now. Elimination of the truck driver exemption from the overtime pay provision is neither necessary nor practical.
