The Maddening World of Overtime Exemptions under the Fair Labor Standards Act (FLSA)

Every now and then, I run into something as a lawyer that makes me laugh. Not laugh in the sense of a deep belly chuckle, but more in the sense of shaking my head with disbelief. Here's what had me laughing the other day.

When does overtime pay apply?

Imagine you're an employee who wants to know if you're entitled to overtime pay. Or maybe you're an owner of a small business, and you want to know if you're required to pay overtime.

Let's imagine further that, in this scenario, we have two employees:

Jeff Gordon works as a driver delivering packages from around the country to your doorstep (think FedEx, UPS, etc.). Jeff typically works 40 hours per week and receives an hourly wage. On occasion, the company is shorthanded, and Jeff is required to work more than 40 hours in a week. Oh, and I almost forgot: Jeff drives a brand-new 2019 Ford transit van for work.

Jeff’s van looks something like this:

Dale Earnhart, Jr. works for the same company and has the exact same job duties as Jeff, but he drives a 2018 Ford Transit Van. It looks exactly like Jeff’s van, with some minor design differences.

What if I told you that one of these employees is entitled to premium overtime pay, while the other employee is not? Could you tell me which one and why?

The answer: Jeff likely is entitled to overtime pay. The reason? Because the 2019 Ford Transit Van he drives weighs 9,950 pounds, as measured by gross vehicle weight rating (GVWR). Dale is not entitled to overtime pay because the 2018 Ford transit van he drives weighs 10,360 pounds (GVWR).

Making sense of overtime exemptions

You're not alone if you're now scratching your head. This example illustrates some of the maddening complexity and nuances of the Fair Labor Standards Act (FLSA), the law that governs overtime pay requirements. The FLSA is full of confusing and sometimes nonsensical, bright-line distinctions, between employees who are entitled to overtime pay and those who are not. The devil is in the details, as they say.

By way of background, the default rule under the FLSA is that all employees engaged in interstate commerce (defined broadly to include almost all workers) are entitled to one-and-a-half time their regular rate of pay for overtime hours, that is, each hour worked in excess of forty (40) hours in any workweek. This default rule controls unless one of a significant number of exemptions applies. You may hear employment lawyers casually throw around the terms "non-exempt" and "exempt." These terms differentiate employees who are entitled to overtime premium pay from those who fit within one of the exemptions (and who are not).

The motor carrier exemption

At issue in the above example is the motor carrier exemption.

From 1938 until 2005, the motor carrier exemption limited overtime pay from extending into the commercial trucking industry—which is otherwise regulated by the Department of Transportation. In 2005, the FLSA was amended to remove from the exemption (got that?) those employees who operate commercial motor vehicles weighing less than 10,000 pounds. And so here we are today: an employee's right to overtime pay may depend on nothing more than whether he drives a 2018 or 2019 model year Ford Transit van.

The need for employment law compliance

Given the complexities of the FLSA, an employment attorney may be needed to determine whether you are eligible for unpaid overtime (or whether your small business must pay overtime to its employees). An employee misclassified as exempt from overtime pay may be able to recover unpaid wages going back two years or more.

Schedule a consultation with Spengler Agans Bradley PLLC today to learn more about overtime requirements under the FLSA.

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