WSR 08-21-150

PERMANENT RULES

DEPARTMENT OF

LABOR AND INDUSTRIES

[ Filed October 21, 2008, 3:04 p.m. , effective November 21, 2008 ]


Effective Date of Rule: Thirty-one days after filing.

Purpose: The rule making is in response to Bostain v. Food Express, Inc., 159 Wn.2d 700, 153 P.3d 846 (2007). In that case, the court concluded that RCW 49.46.130(1) requires overtime compensation for hours worked over forty per week for interstate driving, including hours spent working out of state. Current rules require overtime pay for truck drivers only for their hours worked within Washington. These rules are not consistent with the decision and need to be amended.

The court's ruling directly affects two regulations with corresponding policies and enforcement practices. The court's decision has invalidated portions of WAC 296-128-011 and 296-128-012 where the rules define hours for purposes of overtime provisions as hours worked only within Washington state. Language will also be added that requires the department to review compensation systems submitted by employers, and approve such compensation systems retroactively if the department's review finds that they complied with Bostain and RCW 49.46.130 (2)(f).

Citation of Existing Rules Affected by this Order: Amending WAC 296-128-011 and 296-128-012.

Statutory Authority for Adoption: RCW 43.22.270 and 49.46.130.

Adopted under notice filed as WSR 08-15-178 on July 23, 2008.

Changes Other than Editing from Proposed to Adopted Version: WAC 296-128-012(3) "relied on WAC 296-128-011(1)" was replaced with "employed drivers who worked over forty hours a week consisting of both in-state and out-of-state hours anytime." Further, the last sentence of the proposed regulation was deleted. The sentence stated as follows: "Approval of a reasonably equivalent compensation system under this subsection shall constitute continuing approval for the period the employer uses the compensation system." These changes were made in response to public comments received.

There are three changes from the CR-102 proposed amendments.

First, the department made a technical change by deleting the reference to "(2)(f)" when referring to RCW 49.46.130. We deleted it based on review of RCW 49.46.130 (2)(f), the provision that creates the "reasonably equivalent to time-and-a-half" exemption. The deletion also makes the statutory reference consistent with the statutory reference in WAC 296-128-012 (1)(a).

Second, the department deleted the last sentence of the proposed regulation. It reads as follows: "Approval of a reasonably equivalent compensation system under this subsection shall constitute continuing approval for the period the employer uses the compensation system."

The department does not intend to, by promulgating the proposed regulation, impinge on rights of workers to receive reasonably equivalent overtime wages. The use of the word "shall" in the sentence appears to provide automatic continuing approval regardless of changes in circumstances into the future, potentially rendering it not reasonably equivalent in practice. The department believes that employers may need to make adjustments for unforeseen changes or circumstances for a reasonably equivalent system to be valid in the future.

While deleting this sentence from the proposed regulation, the department will be including additional language in approval letters to employers. That approval language will contain a statement that changes in circumstances may affect continuing approval. This will provide employers and employees the notice and knowledge that continuing approval is based on consistency with the plan.

Third, the department changed the language in the second sentence of WAC 296-128-012(3). That sentence now begins with the language, "An employer who employed drivers who worked over forty hours a week consisting of both in-state and out-of-state hours anytime..." The intent of the proposed subsection is to offer, for a discrete period of time, the benefit of a process for scrutiny to all employers with interstate drivers with out-of-state overtime hours. The department changed the proposed language to reflect that the subsection applies only to employers with interstate drivers.

A final cost-benefit analysis is available by contacting Sally Elliott, P.O. Box 44400, Olympia, WA 98504-4400, phone (360) 902-6411, fax (360) 902-5292, e-mail yous235@lni.wa.gov.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 2, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 2, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 2, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 2, Repealed 0.

Date Adopted: October 21, 2008.

Judy Schurke

Director

OTS-1709.4


AMENDATORY SECTION(Amending WSR 89-22-120, filed 11/1/89, effective 12/2/89)

WAC 296-128-011   Special recordkeeping requirements.   (1) In addition to the records required by WAC 296-128-010, employers who employ individuals as truck or bus drivers subject to the provisions of the Federal Motor Carrier Act shall maintain records indicating the base rate of pay, the overtime rate of pay, the hours worked by each employee for each type of work, and the formulas and projected work hours used to substantiate any deviation from payment on an hourly basis pursuant to WAC 296-128-012. The records shall indicate the period of time for which the base rate of pay and the overtime rate of pay are in effect.

For the purposes of this section and WAC 296-128-012, "base rate of pay" means the amount of compensation paid per hour or per unit of work in a workweek of forty hours or less. A base rate of pay shall be established in advance of the work performed and may be based on hours or work units such as mileage, performance of specified duties, or a specified percentage of the gross proceeds charged for specified work. A base rate of pay shall not be established that will result in compensation at less than the minimum wage prescribed in RCW 49.46.020. "Overtime rate of pay" means the amount of compensation paid for hours worked ((within the state of Washington)) in excess of forty hours per week and shall be at least one and one-half times the base rate of pay.

(2) The records required by this section shall be made available by the employer at the request of the department. Any current or past employee may obtain copies of the formula, the base rate of pay, the overtime rate of pay, and that employee's records. Job applicants seeking employment by the employer as truck or bus drivers subject to the provisions of the Federal Motor Carrier Act, may obtain copies of the formula, the base rate of pay, and the overtime rate of pay.

[Statutory Authority: RCW 43.22.270, 49.46.130 and 1989 c 104. 89-22-120, 296-128-011, filed 11/1/89, effective 12/2/89.]


AMENDATORY SECTION(Amending WSR 89-22-120, filed 11/1/89, effective 12/2/89)

WAC 296-128-012   Overtime for truck and bus drivers.   (1)(a) The compensation system under which a truck or bus driver subject to the provisions of the Federal Motor Carrier Act is paid shall include overtime pay at least reasonably equivalent to that required by RCW 49.46.130 for working ((within the state of Washington)) in excess of forty hours a week. To meet this requirement, an employer may, with notice to a truck or bus driver subject to the provisions of the Federal Motor Carrier Act, establish a rate of pay that is not on an hourly basis and that includes in the rate of pay compensation for overtime. An employer shall substantiate any deviation from payment on an hourly basis to the satisfaction of the department by using the following formula or an alternative formula that, at a minimum, compensates hours worked ((within the state of Washington)) in excess of forty hours per week at an overtime rate of pay and distributes the projected overtime pay over the average number of hours projected to be worked. The following formula is recommended for establishing a uniform rate of pay to compensate work that is not paid on an hourly basis and for which compensation for overtime is included:

1. Define work unit first. E.g., miles, loading, unloading, other.
2. Average number of work units =

Average number of work units accomplished per week

per hour

Average number of hours projected to be worked per week
3. Weekly Base Rate = Number of units per hour x 40 hours x base rate of pay
4. Weekly Overtime rate = Number of units per hour x number of hours over 40 x overtime rate of pay
5. Total weekly pay = Weekly base rate plus weekly overtime rate
6. Uniform rate of pay =

Total weekly pay

Total work units
Example: A truck driver is paid on a mileage basis for a two hundred thirty mile trip performed about ten times a week. The base rate of pay is twenty cents a mile. The overtime rate of pay is thirty cents a mile. The average length of the trip is four and one-half hours.

1. 2300 mi. divided by

per week

45 hours per week = 51.1 miles

per hour


2.

(a)

51.1 miles/hour times 40 hours times .20/ mile = $408.80
(b) 51.1 miles/hour times 5 hours = 255.5 miles
(c) 255.5 miles times .30/mile = $76.65
(d) $408.80 plus $76.65 = $485.45 divided by 2300 miles = 21.1 cents mile

(b) In using a formula to determine a rate of pay, the average number of hours projected to be worked and the average number of work units accomplished per week shall reflect the actual number of hours worked and work units projected to be accomplished by persons performing the same type of work over a representative time period within the past two years consisting of at least twenty-six consecutive weeks.

(c) The department may evaluate alternative rates of pay and formulas used by employers in order to determine whether the rates of pay established under this section result in the driver receiving compensation reasonably equivalent to one and one-half times the base rate of pay for actual hours worked ((within the state of Washington)) in excess of forty hours per week.

(2) Where an employee receives a different base rate of pay depending on the type of work performed, the rate that is paid or used for hours worked ((within the state of Washington)) in excess of forty hours per week shall be at least the overtime rate of pay for the type of work in which most hours were worked.

(3) Compensation plans before March 1, 2007. An employer who employed drivers who worked over forty hours a week consisting of both in-state and out-of-state hours anytime before March 1, 2007, may, within ninety days of the adoption of this subsection, submit a proposal consistent with subsection (1) of this section to the department for approval of a reasonably equivalent compensation system. The employer shall submit information to substantiate its proposal consisting of at least twenty-six consecutive weeks over a representative time period between July 1, 2005, and March 1, 2007. The department shall then determine if the compensation system includes overtime that was at least reasonably equivalent to that required by RCW 49.46.130.


Note 1: On March 1, 2007, the Washington state supreme court ruled that overtime rate of pay includes hours worked within and outside the state of Washington for Washington-based employees. Bostain v. Food Express, Inc., 159 Wn.2d 700, 153 P.3d 846 (2007).

Note 2: The adoption date of this subsection is October 21, 2008.

[Statutory Authority: RCW 43.22.270, 49.46.130 and 1989 c 104. 89-22-120, 296-128-012, filed 11/1/89, effective 12/2/89.]

Washington State Code Reviser's Office