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What the Labor Department’s New Overtime Rules Mean for Trucking

In May, after years of build-up, the United States Department of Labor published new regulations that will affect who may be paid a salary and who must be paid by the hour. The changes, which take effect December 1, 2016, dramatically change the landscape for employers.

But first, what has not changed? While many employers do not realize it, the law has always required that employees do certain types of work before the employer is allowed to pay them a flat salary without paying extra for overtime. Generally, those duties fall under the headings of administrative, executive, or professional work.

Without going into a detailed analysis of what kinds of jobs fall under those categories, broadly speaking these employees are supervisors of two or more employees, managers of operations who use their own judgment and discretion to make important decisions, or employees whose jobs require some advanced educational degree. Being an office worker or carrying a Manager title, for example, does not necessarily mean one may be paid a salary.

If an employee has the right duties—say, a Safety Manager who researches, designs, and implements an overall driver safety program—then the employer may pay him or her a salary, as opposed to an hourly rate of pay that fluctuates based on hours worked. This is where the new regulations come into play. Until December 1, that salary may be as low as $455 per week, or $23,660 per year. On December 1, that amount will jump all the way to $913 per week, or $47,476 per year.

So, unless a person is paid a salary at the rate of at least $47,476 per year, he must be paid by the hour and must be paid 1.5 times his hourly rate when he works over 40 hours in a workweek.

There is only one slight twist: employers may use bonuses and incentive payments (including commissions) to satisfy up to 10 percent of that $47,476, if these extra payments are paid at least quarterly. Stated otherwise, if an employer pays a bonus or commission at least quarterly, and the bonus or commission payments add up to at least $4,747 over the course of a year, then the employer need only pay a salary of $42,729. Note that this rule is not satisfied if the employee merely has the opportunity to earn that $4,474, but only if the employee is actually paid the $4,474.

As a reminder, the new regulations did not do away with the requirement that employees perform what has always been considered exempt work. Therefore, to be exempt from overtime, the employee must do the administrative, executive, or professional work that has always been required AND must receive the new enhanced salary—either (1) at least $47,476, or (2) at least $42,729 plus an annual total in bonuses or commission, paid quarterly or more often, to reach the new level.

The upshot of the new law is that employers need to look at every salaried individual paid less than $47,476 per year and ask whether he or she should receive a raise to that new level or should become paid on an hourly basis. As simple as the new threshold is to understand, the decisions it requires of employers are not easy.

For example, consider a dispatcher whose pay is $45,000 because he is a ten-year employee and a newly hired dispatcher whose pay is $37,000. Raising the pay of the senior employee who is only $3000 away from $47,476 and converting to hourly pay the employee who is nearly $11,000 away seems financially sensible. However, that approach would mean two employees with the same job, doing the same work, would be paid under different schemes. The newer dispatcher would need to keep time records while the other would not—disadvantage for him. However, the senior employee might be asked to work all of the overtime, for no more pay—disadvantage for him. Obviously, what might look like an easy fix can carry complications for employee relations.

Moving an employee to hourly status, of course, means his or her pay will fluctuate as he or she works more hours one week and fewer hours the next. If overtime is well-defined and predictable, an employer can calculate an hourly rate that will yield the same overall pay the employee now receives. However, the more that overtime changes from week to week, the more difficult it will be to make the conversion to hourly pay without affecting overall compensation. And, of course, controlling the hours of employees who work remotely requires careful management.

There is some good news for employers: examining the impact of the new salary threshold can create an opportunity for employers to address what might be existing problems. In looking at whose pay needs to change, employers might find that employees are presently misclassified. That is, some current employees might be receiving a salary without doing exempt work. Where those mistakes exist, they can now be corrected—with an explanation that the change is triggered by the new regulations' enhanced salary threshold.

Overall, these DOL-mandated changes will require good communication with employees to explain the reasons for the changes and, for some workers, the impact of moving from salaried to hourly status. In the end, employers and employees both will need to accept some degree of uncertainty and be flexible as a new pay scheme takes root.

Reposted with permission from the law firm Smith Moore Leatherwood. Alexander Maultsby is with Smith Moore Leatherwood, specializing in transportation issues.

Related: Driver Pay Analyst: No Silver Bullet to Solve Driver Shortage

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Diesel Prices Plateau While Oil Markets Evaluate Brexit

Source: EIA

The price of diesel fuel remained relatively unchanged for the third straight week and the energy markets are still feeling the effects from the United Kingdom's vote to leave the European Union, according to the latest numbers from the Energy Department.

The average price of on-highway diesel fuel dropped by 0.3 cents last week, settling at $2.423 per gallon. The price is 40.9 cents than it was in the same week a year ago.

There are usually significant differences in fuel price fluctuations region to region but prices were slightly down in nearly all areas. The largest decrease in prices was in the New England region at 0.9 cents per gallon while the largest increase in prices was 0.7 cents in the Rocky Mountain region.

The average national price of regular gasoline was down last week by 3.8 cents, hitting $2.291 per gallon. The current average price is 50.2 cents cheaper than it was in the same a week in 2015.

When separated by region, the largest decrease in prices was in the Midwest with an 8.3-cent drop for the week. The smallest change in prices were on the West Coast where prices fell 0.5 cents.

The price of crude oil was down on July 5 as energy prices have felt the effects of the UK's vote to leave the EU, according to a CNBC report. The worry is that the, economic downturn in the UK would slow the global economy, reducing demand for oil.

While oil prices had been steadily rising for the past few months on news that oil producers would be reducing the supply of oil, a slower economy could prevent the prices from continuing to increase.

Related: Business Investment Sinks as Durable Orders Decline

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Omnitracs Adds Trailer & Cargo Tracking Solution

Omnitracs has announced a new solution that allows fleet managers to track trailers and cargo called Omnitracs Trailer Tracks 150.

The company said that Trailer Tracks 150 gives fleets the ability to manage trailer inventory, keep cargo safe and track drivers on the road. It helps keep track of trailers stored in set locations and allows for customizable alerts to signal if a trailer has been dropped off at an unauthorized site.

The new solution integrates into existing dispatch software and Omnitracs' other fleet management applications.

Omnitracs TT150 provides fleets with some key features and benefits:

• Increased driver and tractor productivity and security with real-time monitoring of status and location of trailers and containers
• Reduction of fuel, as fleet managers do not need to search for trailers
• Better operations/planning and enhanced customer service through automated and customized reports
• Increase asset usage, trailer pool inventory, as well as address unauthorized use of trailers for storage purposes through access to real-time data
• Simplified installation process through mobile-friendly, peel-and-stick installation

“Fleet owners continue to struggle with a lack of real-time data related to their fleet, which results in the need to search for trailers, increasing their costs associated with driver time and fuel, as well as leaving them vulnerable to theft and misuse of trailers,” said Jeff Champa, Omnitracs vice president of product management.

“The new TT150 improves visibility into both trailer location and status, eliminates the loss of trailers and cargo, increases utilization, and puts an end to wasted driver time and fuel searching for empty, usable trailers— all for a low price," he added.

Related: Omnitracs for Volvo Trucks Adds Productivity and Safety Features

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Land Line Now online: D.C. Report – Privacy among license plate reader concerns

Oil Eater Offers Full Spill Kit

Oil Eater's professional grade emergency spill kit provides all-in-one solutions for containment and clean up of hazardous spills in vehicle servicing facilities and other areas.

Each kit includes a supply of absorbent pads, pillows, universal snakes, booms, protective gloves, oil-resistant, high-temperature disposal bags and an emergency response instruction guide.

A 5-gallon bucket of Oil Eater Original cleaner is included in each kit to clean surfaces after the spill has been absorbed. Oil Eater cleaner-degreaser is water-based, non-toxic, non-corrosive, non-flammable and biodegradable.

Kits are available in 65-gallon and 95-gallon overpacks which can handle the corresponding volume of liquid.

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