SENATE BILL REPORT

SB 5746

BYSenators Sellar, Smith, Owen and Matson

Exempting interstate truck drivers from overtime wage requirements.

Senate Committee on Transportation

Senate Hearing Date(s):February 22, 1989; March 1, 1989

Majority Report:  That Substitute Senate Bill No. 5746 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Patterson, Chairman; Nelson, Vice Chairman; von Reichbauer, Vice Chairman; Barr, Bender, Benitz, Murray, Sellar, Thorsness.

Senate Staff:Mary McLaughlin (786-7309)

                  March 2, 1989

AS REPORTED BY COMMITTEE ON TRANSPORTATION, MARCH 1, 1989

BACKGROUND:

In a recent Washington State Supreme Court decision, the court ruled that the regulations governing the maximum number of hours an employee of an interstate motor carrier may work as contained in the federal Motor Carrier Act (MCA) does not preempt the overtime provisions of Washington's Minimum Wage Act (MWA).  The decision overturned two lower court rulings.

The MWA requires employers to pay employees time and one-half when the work week exceeds 40 hours.  Under the MCA, the Secretary of the U.S. Department of Transportation has the power to set the maximum hours of service for employees of interstate motor carriers for safety purposes; rates of pay are not addressed.  An interstate truck driver is limited to:  (1) no more than ten hours driving time followed by eight consecutive hours off duty, or (2) no more than 15 hours on duty followed by eight consecutive hours off duty or (3) no more than 60 hours on duty in seven consecutive days if the motor carrier employer does not operate seven days per weeks, or (4) no more than 70 hours on duty in eight consecutive days if the employer operates seven days per week.

A mechanic employed by an interstate trucking firm based in Washington State was denied overtime wages even though the employee worked entirely within the state and worked in excess of 40 hours per week in 35 pay periods. 

The State Department of Labor and Industries (L&I) brought an overtime wage claim in lower district court and later in superior court.  In both cases, the courts held in favor of the employer, based on the assumption that the MCA preempted the MWA.  L&I appealed the case to the Court of Appeals, which certified the case to the Supreme Court.

In its decision, the Supreme Court found:  (1) Congress has not expressed a clear intent to preempt state overtime wage provisions; (2)  neither Congress or the secretary have shown an intent to occupy the field of overtime wage; (3) the MWA does not require an employee to work in excess of the maximum hours set by the secretary; and (4) the state's hours worked and wage requirements do not interfere with safety goals of the MCA.  The court concluded that there is no necessary inconsistency between enforcing maximum hours of service for safety and at the same time, requiring compliance with increased rates of pay for overtime.

Truck drivers are currently paid:  (1) an hourly wage, plus overtime, (2) on a per mile basis, or (3) on a percentage of the gross income per load.  Compensation which is based upon a per mile or percentage of the gross income may include an allowance for overtime so the over-the-road driver's monthly income is comparable to a local driver who is paid on an hourly basis.  This system is normally used because it is difficult for a company to keep track of the working schedules of its over-the- road drivers.

SUMMARY:

The 40-hour work week and overtime wage provisions contained in Washington's Minimum Wage Act (MWA) do not apply to an individual employed as an interstate truck driver who is subject to the provisions of the federal Motor Carrier Act.  Other employees of an interstate carrier are eligible for overtime wages as contained in the MWA.

EFFECT OF PROPOSED SUBSTITUTE:

The reference to federal statute is expanded to include both the federal Motor Carrier Act and the Interstate Commerce Act.  The pay system used to compensate the truck driver includes overtime pay that is reasonably equivalent to that required in the Minimum Wage Act for working more than 40 hours per week.

Appropriation:    none

Revenue:    none

Fiscal Note:      February 15, 1989

Senate Committee - Testified: Martin Sangster, WTA; Mike Ryherd, Teamsters; Jim Oswald, Teamsters; Leo Sweeney, Teamsters; Pam Hoyam, McLane Northwest; Don Frey, Metro Hauling, Inc.; George Payne