Bill That Guarantees Overtime for Truckers – What It Means for Drivers and Companies
A representative from Michigan has introduced the Guaranteeing Overtime for Truckers Act, also known as bill number HR 7517. If passed, this would be the first legislative action involving truckers pay in over half a decade. This would call for a repeal of an amendment made to a dated Fair Labor Standards Act exemption regarding mandatory overtime that excluded truckers amongst other workers.
In essence, this would make it mandatory for truck drivers to get paid overtime after 40 hours of work during the week. As every driver knows, if the wheels aren’t turning the drivers aren’t making money. So, if a driver is working 14-hour days and ideally spends an average of half of those driving which means there is about 35 hours or more that they are technically on the clock without getting paid.
If this sounds like a raw deal, then you would likely agree with theory of this being one of the key reasons for the driver shortage. In this case it is less of a shortage than a retention problem.
“Truck drivers across the country face brutal working conditions marked by inadequate pay and long hours. Despite their tireless work, truck drivers do not receive overtime pay for overtime hours. As a result, the trucking industry faces an extremely high turnover rate as truckers cannot keep up with the thankless demands of their work. We all stand to benefit when truckers are paid what they’re owed.” - Rep. Andy Levin, D-Mich.
Many believe that fair wages for truck drivers could help remedy the retention issue and make the job itself more desirable over time as return on an investment like this would take time to see. This bill is supported by the Owner-Operator Independent Drivers Association (OOIDA) that have had a long fight to get their voices heard. They have also stated that “the original design of the exemption passed in the 1930s was to prevent truckers from working too many hours. The reality, OOIDA says, is that the “outdated law” prevents truckers from receiving fair compensation.”
The importance of fair pay is not the only pressing reason this act is making an appearance but those that are in support of it believe it will help ease supply chain strains indirectly by putting more trucks on the road via better pay.
What would this mean for companies? According to freightwaves.com “trucking companies large and small struggle to stay profitable – even if they pay employees less than minimum wage. An ongoing study of operating ratios by NYU Stern School of Business professor Aswath Damodaran shows that trucking companies maintain a net margin of a paltry 1.85%. The overall transportation sector sits at 5.97%. It’s not because these companies are poorly run. It dates back to that 1980 deregulation act. In the late 1970s, there were about 17,000 trucking companies. Now, there are more than 200,000. If a trucking company decided to jack up rates to pay its workers more, its clients can simply go work with any other trucking company.”
To view the bill in its entirety, click here.
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