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stevewlaw
stevewlaw, Attorney
Category: Business Law
Satisfied Customers: 207
Experience:  25+ years and millions of dollars in settlements in catastrophic personal injury, wrongful death, and commercial litigation.
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I own a delivery service business in Michigan that contracts

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I own a delivery service business in Michigan that contracts with FedEx to delivery packages. All drivers are my employees. We pay by the day to have drivers deliver all packages and they then get paid a minimum per day or a % of what was delivered. I am concerned about OT pay. We don't pay OT. Is this a problem?

stevewlaw :

Hi [USERNAME], my name is XXXXX XXXXX I will do the best to help you. My advice is general only and does not create an attorney-client relationship. The MI law regarding overtime is codified at :


MINIMUM WAGE LAW OF 1964 (EXCERPT)
Act 154 of 1964



408.384a Compensation for overtime; exceptions; rules; unpaid minimum wages; appropriation; compensatory time in lieu of monetary overtime compensation.

stevewlaw :

If the drivers who are your employees work in excess of 40 hours per week, the total wages they receive for the overtime must meet or exceed the 1.5 times their hourly wage rate. If they are paid a minimum, just make sure that the minimum or the % pay that they receive will equal the 1.5 times their regular hourly wage rate. Since it appears that they do not receive a regular hourly rate and instead receive a "minimum", make sure that this amount meets or exceeds the minimum wage rate (and I am sure that it would) and use this minimum as your baseline to figure overtime an overtime wage.

stevewlaw :

Let me ask you this - do your employee drivers often work in excess of 40 hours per week?

stevewlaw :

Just a moment - I am looking at a recent case interpreting the transportation industry exemption under the Motor Carrier Act....

Customer:

Yes. Does the FLSA exemption for transportation come into play here? I'm hoping this would cover our situation.

stevewlaw :

That is what I am looking at my friend. I take it that your deliveries are "local" in nature and not interstate, correct?

Customer:

yep - they are all in michigan

Customer:

Im thinking maybe exemption wouldn't matter because we don't fall under FLSA requirements!?

stevewlaw :

I am sure you have already read this DOL fact sheet pertaining to this subject. So long as the transportation is involving interstate commerce (including your employees dropping goods off at an interstate terminal (such as the FedEx terminal - and I believe all FedEx shipments go through one of a few hubs so they all are involving interstate commerce), the exemption will apply to your drivers. So whether it applies or doesn't, I think that you are good here in exempting the drivers from overtime.

stevewlaw :

The link to the DOL fact sheet I mentioned is located at http://www.dol.gov/whd/regs/compliance/whdfs19.htm

Customer:

ok that's great news! I have been worried about it for a while now. Thanks for your help!

stevewlaw :

You're welcome. THank you for allowing me to assist you.

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