Most American employers must abide by The Fair Labor Standards Act of 1938 (FLSA) and pay overtime for workweeks exceeding 40 hours. However, most employee drivers at trucking companies are an exception due to the law’s motor carrier exemption.
But if Congress follows through on the U.S. Department of Transportation’s recent advice, all that will change. Bill H.R. 7517, introduced recently in the House, will end exemptions.
Labor already accounts for roughly 43% of the cost of trucking among companies employing drivers. Many carriers pay drivers overtime or charge hourly detention fees when wait times exceed a contracted threshold.
The question for many industry watchers is this: Many carriers already use electronic logging devices, GPS trackers, and driver-facing cameras to measure and monitor driver performance. Would adding more overtime pay for truck drivers improve shipper/receiver efficiency? How could drivers benefit?
How Bill H.R. 75171 could impact pay for truck drivers
Like any regulatory change, the bill will likely have benefits, costs, and unknown unintended consequences–including potential market effects, significant challenges for large carriers, and changes to pay for truck drivers:
- Single truck owner-operators leased to larger carriers may indirectly benefit if large carriers pay company drivers more and freight rates rise.
- Most company drivers would likely benefit financially by spending less time waiting to load or unload shipments.
- Carriers with company drivers could reduce pay for truck drivers to offset overtime pay, keeping total earnings relatively unchanged. Or they may rely more heavily on independently contracted owner-operators.
- The industry could offer fewer company driving jobs, which provide stability, insurance, and retirement benefits.
- Carriers who do not already provide overtime pay for truck drivers would likely need to overhaul their systems for paying drivers and tracking drivers’ hours.
- While most employee truck drivers hauling over the road receive per-mile payment, trucking’s hodgepodge of compensation models (hourly wages, salaries, percentage pay, and the like) may mean carriers find some existing payment models incompatible with overtime. Furthermore, they may need to implement new payment systems, which would require time and resources. This fundamental change could hasten trucking automation and the use of autonomous trucks.
We haven’t seen the impact of the new bill yet. But it is sure to impact the U.S. trucking industry and fair pay for truck drivers. Axele supports fair pay for truck drivers, who work tirelessly to move cargo across the U.S. After all, paying truck drivers for their work helps them enjoy a better lifestyle. Contact Axele today.