Understanding Exemptions (and Exceptions) to Federal Overtime Rules

Not every Maryland employee is covered by federal and state overtime laws. The Fair Labor Standards Act, which governs federal overtime rules, contains a number of exemptions. That is to say, “exempt” employees are not legally entitled to overtime pay even if they work more than 40 hours per week.

Maryland Company Ordered to Pay Overtime to Managers Who Made Deliveries With Personal Vehicles

The U.S. Fourth Circuit Court of Appeals recently considered the scope of one FLSA exemption as it applied to a Maryland employer. The employer is a commercial bakery that provides baked goods to restaurants and retail stores. The plaintiffs worked as sales managers for the employer. As part of their job, the plaintiffs frequently made deliveries to customers. Sometimes they used company-owned commercial trucks, but “between 70 percent and 90 percent of the deliveries” were made using the plaintiffs’ personal vehicles.

This distinction between personal and commercial vehicles is critical. The FLSA does not apply to employees of commercial motor carriers, as they are subject to separate regulations made by the U.S. Department of Transportation. In 2005, Congress amended the FLSA to state this motor carrier exemption only applied to vehicles weighing more than 10,000 pounds. A subsequent amendment in 2008 clarified that an employer still had to pay overtime wages to any employee whose work “in whole or in part” included operating a motor vehicle under the 10,000 pound limit.

In this case, the plaintiffs said they qualified for overtime under the 2008 amendment. The employer disagreed, arguing that since the plaintiffs sometimes operated larger commercial delivery trucks, they were exempt from overtime. In effect, the employer argued that any “mixed fleet” workers fall outside the scope of the FLSA.

The Fourth Circuit disagreed. Reversing a lower court’s ruling, a three-judge panel held that the plain language of the 2008 amendment “plainly provides that employees working on mixed fleet vehicles are covered” by the exception to the overall exemption for motor carrier workers. Notably, the 2008 language states an employee only has to work “in part” on smaller vehicles to qualify for overtime. That was the case here.

Had Congress wanted to exclude employees of mixed fleets from overtime protections, as the employer in this case suggested, it could have said so explicitly. But “Congress did not do so,” the appeals court noted, and the judges declined to read the law so narrowly. To the contrary, the FLSA is a “remedial” statute and its terms must be “narrowly construed against the employers,” the Court said. Accordingly, the plaintiffs were entitled to overtime.

Need Help From a Baltimore Wage and Hour Attorney?

It should be noted that the plaintiffs in the case above were not covered under Maryland’s state overtime rules. The Fourth Circuit said the state law did not incorporate the 2008 amendment applicable to the plaintiffs’ federal overtime claims. This illustrates the inherent complexity of overtime law. That is why if you are involved in any kind of overtime dispute with your employer, you need to work with a qualified Baltimore wage and hour attorney. Call the Law Firm of J.W. Stafford, LLC at 410-514-6099 or contact us online to schedule a confidential consultation today.

(image courtesy of Orlando Leon)