Washington Supreme Court holds interstate truck drivers entitled to overtime compensation for all hours worked in excess of 40 hours per week
March, 2007
In a recent decision, the Washington Supreme Court has dramatically changed the rules governing when interstate truck drivers are entitled to overtime pay. In its decision, Bostain v. Food Express, Inc.---P3d---, 2007 WL 611259 (Wash March 1, 2007), the Washington Supreme Court held that interstate truck drivers are entitled to overtime compensation for any hours worked in excess of 40 hours per week, regardless of whether some of the hours were incurred outside Washington State. Companies employing interstate truck drivers should immediately review their compensation system to ensure compliance with this new decision.
The case involved a driver who was paid an hourly wage, unless he drove over 200 miles, in which case he was paid by the mile. Records showed the driver worked an average of 48 per week, but that he never worked more than 40 hours a week within Washington. His employer had not been paying overtime to him since he worked less than 40 hours a week in Washington. The employer's position was based on Washington Administrative Code that stated overtime pay was only required for hours worked in Washington in excess of 40 hours per week. The Washington Supreme Court found the administrative rule was inconsistent with Washington's Minimum Wage Act (MWA) and therefore invalid.
If interstate drivers are paid by the hour, the overtime rate of pay is one and one-half (1 ½) times the regular rate for which a driver is paid. If, however, an alternative compensation system is used (such as by the mile), it must include a component for overtime pay at least reasonably equivalent to that under an hourly-based system. The Code contains an example of a mileage-based overtime compensation formula that ensures a driver will be properly compensated. While the formula is somewhat complicated to implement, it can be beneficial for certain employers.
For companies who employ interstate truck drivers the implications of this decision are significant. These companies should immediately review and evaluate whether their current compensation system is in compliance with this new decision. Failure to correctly compensate drivers can expose an employer to wage and hourly lawsuits, which can result in an award of damages consisting of back wages, penalties and interest.
Please contact your Bullivant attorney for additional details regarding this case or its implications.