Alex Padilla U.S. Senator for California

By Cliff Abbott

U.S. Senate bill 3273 (S 32273), introduced on Nov. 9, 2023, by Sen. Alex Padilla (D-CA) was a notable exception to the bills containing hundreds, even thousands, of pages that often reach the ears of the nation’s legislators.

Instead, S 3273, known as the Guaranteed Overtime for Truckers (GOT) Act, consists of just a single page. On that single page, Padilla’s proposal was summed in in a single, succinct sentence: “Section 13(b)(1) of the Fair Labor Standards Act (FLSA) of 1938 (29 U.S.C. 213(b)(1)) is repealed.”

This particular section of the FLSA excludes truck drivers from qualifying for overtime pay. Its repeal would, as the bill’s name suggests, guarantee overtime compensation for commercial drivers.

Also on Nov. 9, a similar resolution, HR 6359, was introduced in the U.S. House of Representatives.

“America’s truck drivers are on the front lines of keeping goods and our economy moving. More than 70% of goods across the United States are shipped by truck,” Padilla stated when introducing the bill on the Senate floor. In addition, he noted that the COVID-19 pandemic and resulting supply chain crisis “exacerbated longstanding challenges for truckers, including long hours away from home and time spent waiting — often unpaid — to load and unload at congested ports, warehouses, and distribution centers.”

In addition to improving the nation’s ports and supply chain infrastructure through the bipartisan infrastructure law, he said, it is important to “improve wages and working conditions for essential workers and ensure they are paid for all of the hours they work.”

Industry response

Speaking out in support of the bills, Teamsters General President Sean O’Brien said, “Truck drivers have been denied overtime protections for nearly 100 years. The Guaranteeing Overtime for Truckers Act rights this wrong and would end this inexcusable abuse to hundreds of thousands of drivers across the country.”

The Owner-Operator Independent Driver Association (OOIDA) also supports the legislation.

“It’s hard to think of many professions where employees must be on the clock but not fully compensated for their time,” said Todd Spencer, president of OOIDA. “But this is the reality that many truckers face because of the FLSA overtime exemption. Shippers, receivers, carriers and others throughout the supply chain hardly have to think twice when they push truckers to work 60, 70 or 80 hours in a week — because they know they won’t have to pay overtime.”

American Trucking Associations President and CEO Chris Spear does not agree.

“This proposal is nothing more than a thinly veiled attempt to boost trial attorneys’ fees,” Spear said. “It would reduce drivers’ paychecks and decimate trucking jobs by upending the pay models that for 85 years have provided family-sustaining wages while growing the U.S. supply chain.”

Dave Williams, chairman of the Truckload Carriers Association and senior vice president of equipment and government affairs for Knight-Swift Transportation, calls the legislation a case of “good intentions with unintended consequences.”

“The proposed overtime bill would force additional costs on the carrier and hope the carrier finds a way to pass on those costs to the shipper,” Williams said.

In a recent interview with The Trucker, Padilla described his reason for sponsoring the bill, saying, “I think it is pretty simple and straightforward … a lot of other workers and a lot of other industries get paid overtime for their time and their work. Truckers deserve the same, but for reasons I don’t understand, the Fair Labor Standards Act of 1938 exempted many truckers from overtime protections, including overtime compensation.”

The logistics of trucker overtime

While the premise of the bill might be simple and straightforward, the implementation would be anything but. One of the first hurdles to clear will be figuring out how — and even if — current Federal Motor Carrier Safety Administration (FMCSA) regulations permitting 11 hours of driving during a 14-hour work period and 60 hours of work in a seven-day period (or 70 in an eight-day period) would mesh with eight-hour workdays and 40-hour work weeks.

There are many questions to be considered, the most obvious being: If this legislation becomes law, would carriers adjust drivers’ hours to avoid payment of overtime?

Doing so would drastically increase the number of trucks and drivers needed to haul the same amount of freight — in a market where company drivers are already hard to come by.

Over-the-road drivers regularly work 60 or more hours every week rather than 40. It’s likely that paying the generally accepted time-and-a-half overtime rate for 20-plus hours per driver per week would result in drastic changes to the rates carriers charge their customers. How would customers be billed for additional time spent in traffic or shut down due to weather conditions when rates are agreed to before loads are picked up? Potential overtime costs would need to be built into the rates.

Padilla indicated that the sponsors of the GOT Act would leave those questions to the industry.

“We’re not being prescriptive in how the large carriers, or any carrier, frankly, will comply with ensuring overtime pay,” he said. “For those (carriers) that are already compensating idle time — or any type of overtime — good for them. That should be the standard, not the privilege of just the drivers who work for them. It should be the standard across the industry, and it’s in everybody’s interest.”

Padilla says he understands that motor carriers are not always responsible for hours-long delays experienced by their drivers.

“You have issues of idle time, for example, at ports when trucks are being loaded and unloaded. You do have issues of traffic. I come from the state of California — specifically the city of Los Angeles — where I see truckers having to battle through traffic many times during the day,” he said. “So, time worked is not always equivalent with vehicle miles traveled.

“Those are just two examples of the inefficiencies in the supply chain that workers are victims of because they’re not being fairly compensated for the time and the work that they’re putting in,” he continued. “Ensuring that truckers can earn overtime pay for their overtime work is only right.”

Shifting to the perspective of motor carriers, the pay structure itself would need to be changed if these bills become law. Overtime pay is based on an hourly wage, while most over-the-road truckers are paid on either a cents-per-mile basis or receive a certain percentage of the profit from each load. At a minimum, carriers would need to adopt a combination of strategies, adding overtime hourly pay to the current system — or even change their pay systems entirely.

There’s also the question of how owner-operators and independent contractors might be compensated. Because these drivers are self-employed, they are not bound by overtime rules. However, the implementation of overtime compensation could benefit these drivers.

If carriers are required to pay overtime to company drivers, the result, as noted earlier, would likely be increased rates for their customers. These increased rates might create a competitive advantage for owner-operators and independent contractors. Another factor would occur if carriers reduce drivers’ hours to contain overtime costs, resulting in reduced capacity in the market, further driving rates up.

Then, if more drivers purchase trucks and become owner-operators to take advantage of higher rates, the FMCSA’s task of monitoring carriers becomes more difficult.

The safety factor

Industry safety groups have come out in favor of the bill, claiming that it would increase safety. Certainly, a case can be made that reducing driving hours to avoid overtime pay could ensure that drivers get more rest, enhancing safety efforts.

“When (carriers are) looking at their bottom line versus what’s in the best interest of truckers — or frankly, safety on the road when truckers have to put in more time to get the work done — that’s not always good for road safety,” Padilla said. “There may be a concern about either increased costs or … shifting costs. What I believe will happen is incentives will appear to (create) more efficiency throughout the supply chain.

“Let’s tackle the idle time and the inefficiencies when trucks are being loaded or unloaded at ports or at warehouses,” he continued. “Because right now, there’s no intent to cut down on that time that keeps truckers idle.”

There’s yet another side to the issue: Carriers that reduce their drivers’ hours to avoid paying overtime will need to put more trucks on already congested roads to meet customers’ deadlines and demands. Because of this, parking, which is already a driver’s nightmare in some areas of the U.S., will become an even bigger problem. None of these enhance industry safety.

Undoubtedly, drivers would benefit from the increased pay resulting from the passage of the GOT Act. Some argue that it’s only fair that drivers receive the same wage protections as workers in other industries. Higher pay could attract more drivers to the industry, helping alleviate the driver shortage complained about by large carriers and trucking associations.

The overall cost

At the same time, the aforementioned increased freight rates would undoubtedly result would add to inflationary pressures on the economy, increasing the cost of everything that moves by truck.

Trucking isn’t the only industry that would be impacted by S 32273 and HR 6359. While the legislation has the word “truckers” in its name, in reality its reach goes beyond the trucking industry. Specifically, the exemption in the FSLA applies to, “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of title 49.”

In addition to the trucking industry, the Department of Transportation has jurisdiction airline, rail, maritime and other industries. Repealing the overtime exception for truck drivers could very well have repercussions in those industries, too.

A bipartisan issue

Padilla says support for the bill is bipartisan, although at the time of this writing no Republican senators have officially thrown support behind the Senate version. Cosponsors include Sens. Edward Markey (D-MA), Bernard Sanders (I-VT), Elizabeth Warren (D-MA), Richard Blumenthal (D-CT) and Ron Wyden (D-OR).

However, the House version of the bill is sponsored by Rep. Jefferson Van Drew, a New Jersey Republican, and cosponsored by Rep. Mark Takana, a Democrat from California.

“Every community is served by truckers — it’s red states, it’s blue states. It’s red towns, it’s blue towns. This is not a partisan issue,” Padilla said.

Regardless of where one stands on the issue, there are a million questions that must be answered before the GOT Act becomes effective in the trucking industry. While the bill guarantees overtime pay for truckers, it also guarantees something else — a watershed moment for the trucking industry.

Read the full article here.