Indiana District Court Applies Federal Motor Carrier Exemption to Former Employees Who Never Crossed State Lines

Intrastate haulers and slingers of trash and recyclables are exempt under the federal Motor Carrier Act according to a recent decision by the United States District Court for the Southern District of Indiana, Indianapolis Division. Craft, et al. v. Ray’s LLC and Donald Matthews, 1:08-cv-627-RLY-JMS (S.D. Ind.). The FLSA mandates that employers pay employees one and a half times their regular rate for each hour worked in excess of forty during a work week. 29 U.S.C. § 207(a)(1). Several exceptions to this rule exist, including one for employees “over whom the Secretary of Transportation has power to establish qualifications and maximum hours of service.” 29 U.S.C. § 213(b)(1).The Motor Carrier Act exemption specifically applies to drivers, drivers’ helpers, loaders, and mechanics who participate in interstate commerce within the scope of their employment. 29 C.F.R. § 782.2(b)(2).

In Craft, the plaintiffs transported full containers from customer locations to Ray’s Recycling or a transfer location owned by Ray’s, within Indiana state lines. Trash and recyclables are sorted, with trash being taken by a Ray’s driver to an in-state landfill or incinerator. Recyclable material is shredded, compacted or baled in preparation for delivery to end recipients. Ray’s Recycling does not process recyclable scrap metal. Instead, a Ray’s driver transports scrap metal from Ray’s Recycling or a transfer station to Farnsworth Metals, Inc., an Indiana company owned by the majority shareholder of Ray’s. Ray’s Recycling, the transfer stations, and Farnsworth typically received advance purchase orders and shipping instructions from end recipients. Over 50% of the end recipients are out-of-state.

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Newly Enacted Wage and Hour Legislation

Several new wage and hour bills made it through various state legislatures during the second quarter of the year. Below is a wrap up of new developments (including regulatory updates) from April 1, 2009 through June 30, 2009.

Alabama House Bill 144, Effective 5/19/2009. Modifying several aspects of the state child labor laws.

Colorado House Bill 1108, Effective 8/5/2009. Provides that an employer under specified circumstances is subject to penalties if an employee's paycheck is not paid because the employer's bank does not honor the paycheck.

Connecticut House Bill 6185, Effective 10/1/2009. Concerns equal pay discrimination.

Florida House Bill 569, Effective 7/1/2009. Allows wages to be paid by a payroll debit card.

Indiana Senate Bill 465, Effective 7/1/2009. Requires an employer to provide a pay stub to employees and post a notice regarding the state's minimum wage law. The notice must include an employee's basic rights and who to contact for information, questions or complaints.

Iowa House Bill 618, Effective 7/1/2009. Update to civil and criminal penalties, including increase of maximum penalty to $10,000 for the illegal use of child labor, and provides that wage discrimination is an unfair employment practice under the state civil rights act.

Kansas Senate Bill 160, Effective 1/1/2010. Increases the minimum wage from $2.65 an hour to $7.25 an hour.

Maine House Bill 280, Effective 9/18/2009. Requires break time for nursing mothers in the workplace and requires an employer to provide a sanitary space, which must be close to the work area and may not be a bathroom, for nursing mothers to express milk in privacy.

Maryland Code of Administrative Rules 09.12.02.01 -.02, Effective 6/19/2009. Amends rules relating to equal pay for equal work. Requires employers to collect certain employee data, such as the gender and racial classification of their employees and records must be maintained by the employer for 3 years.

Montana House Bill 133, Effective 10/1/2009. Amends the definition of “income” with respect to garnishments to exclude mandatory retirement and disability contributions and union dues.

Nevada Assembly Bill 84, Effective 7/1/2009. Expands exemption for salespersons to any employee in a retail or service business. In order to qualify for the exemption, the employee must earn at least half of his/her compensation through commissions and be paid more than 1½ times the minimum wage.

New Mexico House Bill 489, Effective 6/19/2009. Allows workers to collect treble damages against employers that violate the state's $7.50-an-hour minimum wage law.

North Dakota Senate Bill 2344, Effective 8/1/2009. Exempts the act of breastfeeding from the offense of indecent exposure. An employer may use the designation "infant friendly" on its promotional materials if the employer adopts a workplace breastfeeding policy that includes specific criteria.

Oklahoma Administrative Code sections 380:30-1-7, -3-4, -5, Effective 7/1/2009. Amends rules to clarify the requirements for a valid payroll deduction agreement.

Oklahoma Senate Bill 527, Effective 11/1/2009. Provides that if an employer pays an employee with a check that is subsequently returned by reason of the refusal of the bank to honor the check due to insufficient funds or a stop payment notice, the employer must reimburse the employee for any fees or costs incurred by the employee within 14 days.  Additionally requires employers to post a notice describing the pertinent provisions of the Oklahoma Minimum Wage Act. The notice must be not less than 8 1/2 by 11 inches and must be displayed and accessible to all employees in each establishment under the control of the employer.

Oregon House Bill 2826, Effective 1/1/2010. Increases the hours of the day during which children under 16 years of age may work; provides for additional hours of work during summer.

Oregon House Bill 3474, Effective 1/1/2010. Increases processing fee chargeable to employee by employer for garnishments of employee's wages.

Oregon Senate Bill 373, Effective 1/1/2010. Provides that an obligor and obligee under a support order may bring a civil action for damages against an employer or other person who withholds money under an order to withhold, but who fails to pay the withheld amounts within the time allowed by law.

Vermont House Bill 313, Effective 6/1/2009. Amends the state minimum wage law to clarify that annual adjustments to the state minimum wage are not to result in a decrease in the minimum hourly wage rate.

Washington House Bill 1596, Effective 7/26/2009. Protects a woman's right to breastfeed in a place of public resort, accommodation, assemblage, or amusement.
 

Minimum Wage Increases Set For July

The federal minimum wage is set to increase to $7.25 on July 24, 2009. Additionally, 23 states will also increase the minimum wage for employers subject to state wage and hour laws. The majority of these increases take effect on July 24, 2009, but three states raise their minimum wage effective July 1, 2009.

In addition to noting the wage increase, employers should ensure that they are properly displaying a copy of the state’s current minimum wage poster in a conspicuous location in the workplace that notes the wage increase, even if the increase will not affect hourly employees at any particular workplace.

The following states have increased their state minimum wage:

Delaware
• $7.25/hr. effective 7/24/09

District of Columbia
• $8.25/hr. effective 7/24/09

Federal
• $7.25/hr. effective 7/24/09

Florida
• $7.25/hr. effective 7/24/2009

Idaho
• $7.25/hr. effective 7/24/09

Illinois
• $8.00/hr. effective 7/1/09

Indiana
• $7.25/hr. effective 7/24/09

Kentucky
• $7.25/hr. effective 7/1/09

Maryland
• $7.25/hr. effective 7/24/09

Missouri
• $7.25/hr. effective 7/24/09

Montana
• $7.25/hr. effective 7/24/09

Nebraska
• $7.25/hr. effective 7/24/09

Nevada
• If health benefits are available:
Effective 7/1/09 $6.55/hr (employers subject to the FLSA should see federal requirements)
• If the employer does not provide qualified health benefits:
Effective 7/1/09 $7.55/hr

New Jersey
• $7.25/hr. effective 7/24/09

New York
• $7.25/hr. effective 7/24/2009

North Carolina
• $7.25/hr. effective 7/24/09

North Dakota
• $7.25/hr. effective 7/24/09

Oklahoma
• $7.25/hr. effective 7/24/09

Pennsylvania
• $7.25/hr. (large employers) effective 7/24/09
• $7.25/hr. (small employers) effective 7/24/09

South Dakota
• $7.25/hr. effective 7/24/09

Texas
• $7.25/hr. effective 7/24/09

Utah
• $7.25/hr. effective 7/24/09

Virginia
• $7.25/hr. effective 7/24/09

Wisconsin
• $7.25/hr effective 7/24/09
 

Indiana Adopts New Minimum Wage Poster Requirements

Beginning July 1, 2009, every employer subject to Indiana's minimum wage law or any rule or order issued under that law, is required to post a poster providing employees with the following information: the current Indiana minimum wage; a description of an employee’s rights under the minimum wage law; and information regarding how an employee can obtain additional information from, or direct questions or complaints to, the Indiana Department of Labor. The poster is available free of charge from the Indiana Department of Labor.

This blog post was authored by Christopher Kaczmarek.