TLPA

SAFETEA-LU TECHNICAL CORRECTIONS: DOT LICENSING AND OVERTIME PAYRULES FOR OPERATORS OF 1-8 PASSENGER VEHICLES

BY CHARLES M. WATKINS OF WEBSTER, CHAMBERLAIN & BEAN, WASHINGTON, D.C.

On June 6, 2008, President Bush signed the SAFETEA·LU Technical Corrections Act of 2008, Pub. Law 110244. The Act makes two significant changes in the laws governing operators of 1-8 passenger vehicles that provide interstate transportation.

OPERATING AUTHORITY

Section 305(c) ofthe Act amends the definition ofa "motor carrier" for purposes of determining which carriers are subject to licensing by the Federal Motor Carrier Safety Administration ("FMCSA").

Prior law

Under SAFETEA-LU, effective August 10, 2005, a motor carrier was not required to be licensed unless it was providing interstate transportation by "commercial motor vehicle"—most commonly, a vehicle weighing more than I0,000 pounds, or designed or used to transport 9 or more passengers, including the driver, for compensation.

Amendment

The amendment in the SAFETEA-LU Technical Corrections Act changes the definition of a "motor carrier" in 49 U.S.C. §I3I02(14), so that, effective June 6, 2008, any motor carrier providing interstate transportation by "motor vehicle" is required to be licensed. Thus, except as listed below, all motor vehicles that provide interstate transportation, including 1-8 passenger vehicles, must be licensed by the FMCSA. (The FMCSA calls this "obtaining Operating Authority.")

Exceptions

The exceptions are:

• Taxicabs, and certain black cars defined in 49 U.S.C. §13102(22) as providing taxicab service;
  
  
  
• Statelicensed vehicles operating exclusively within a municipality's "commercial zone" (defined in 49 CFR §372.201-.243); and
  
  
  
• Vehicles exclusively providing transportation before or after air travel and within 25 miles of the airport (49 CFR §372.117).

Additional requirements

Financial responsibility. The SAFETEA-LU Technical Corrections Act does not change the insurance requirements for motor carriers — $1.5 million for vehicles seating up to 15 passengers, and $5 million if any vehicle operated under the company's Operating Authority has a capacity greater than 15 passengers. Because operators of 1-8 passenger vehicles (exclusively) are now required to be licensed by the FMCSA, they are subject to the $1.5 million insurance requirement.

Self-insurance may be approved by the FMCSA if the applicant has sufficient net worth and an adequate safety program.

Other requirements. Unless and until the Federal Motor Carrier Safety Regulations are amended, they generally do not apply to 1-8 passenger vehicles that are not otherwise "commercial motor vehicles.” However, operators of 1-8 passenger vehicles must file a motor vehicle identification report (49 CFR §390.19) and maintain an accident log (49 CFR §390.15).

Enforcement

As of the date of this writing, the Federal Motor Carrier Safety Administration has not even posted notice of the change on its website, and a staff lawyer knew of no enforcement efforts directed at 1-8 passenger vehicles. However, operators who are not already licensed by FMCSA should obtain Operating Authority, and can do so by filing online at http://www.fmcsa.dot.gov/. Paper forms can also be downloaded or completed at the FMCSA website.

OVERTIME PAY REQUIREMENT

The second change in the laws is found in §306 of the Act, which, for employee-drivers of 1-8 passenger vehicles, "unhooks" the overtime pay requirement from the Secretary of Transportation's authority to regulate hours ofservice.

Prior law

Under §13(b)(l) ofthe Fair Labor Standards Act, 29 U.S.C. §213(b)(I), an employer is not required to pay overtime compensation (under federal law) 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 [49 U.S.C. §31502]." Section 31502 authorizes the Secretary of Transportation to prescribe the qualifications and maximum hours of service of employees of any motor carrier with respect to interstate transportation.

Thus, under SAFETEA-LU, because the definition of a "motor carrier" was tied to providing interstate transportation by "commercial motor vehicle," some question existed regarding whether the Secretary's authority was limited to drivers of commercial motor vehicles (e.g., more than 8 passengers, including the driver), or extended to drivers of 1-8 passenger vehicles operated by companies that were motor carriers because they also operated commercial motor vehicles.

Amendment

The Technical Corrections Act resolves this issue, but not by amending 49 U.S.C. §31502. Instead, §306(a) of the Act simply declares that, effective on the date of enactment [June 6, 2008], the Fair Labor Standards Act's (FLSA's) overtime pay requirement "shall apply to a covered employee notwithstanding" the §13(b)(I) exemption described above. Section 306(c) of the Act defines a "covered employee" as, among others, an employee of a motor carrier who drives a vehicle "weighing 10,000 pounds or less" and that is not otherwise a commercial motor vehicle. Accordingly, under the FLSA, operators must pay overtime compensation to employee-drivers of any vehicle weighing 10,000 pounds or less (regardless of the number of passengers the vehicle may carry) who provide interstate transportation, even though those drivers are subject to the Secretary of Transportation's authority to establish qualifications and maximum hours of service.

CHART OF USDOT REQUIREMENTS

Attached is a chart that summarizes the application of the USDOT regulations to commercial passenger vehicles traveling across state lines.

Note: TLPA members should consult with their own legal counsel regarding whether they are required to obtain Operating Authority from the FMCSA and the extent to which their employee-drivers are subject to the overtime pay requirements of the Fair Labor Standards Act.

USDOT Regulation of Commercial Passenger Vehicles Traveling Across State Lines - February 9, 2009

USDOT Regulation of Commercial Passenger Vehicles Traveling Across State Lines February 9, 2009

• Licensing. As of June 6, 2008, DOT has jurisdiction over interstate passenger transportation provided in any "motor vehicle." All motor carriers of passengers subject to DOT licensing jurisdiction must file Forms OP-l(P), MCS-150, and MCS-150A. Forms and online registration are available at www.fincsa.dot.gov. DOT does not have Iicensing jurisdiction over, inter alia, (I) vehicles providing "taxicab service" (as defined in 49 U.S.C. §13102(22)), 49 U.S.C. §13506(a)(2); (2) transportation wlthn a municipality's interstate "commercial zone" (defined in 49 CFR Part 372), 49 U.S.C. §13506(b)(I); (3) transportation immediately before or after air travel and (generally) within 25 miles of the airport, 49 U.S.C. §13506(a)(8)A), 49 CFR 372.117); or (4) intrastate transportation, 49 U.S.C. §13501(1). States may impose their own (more or less strict) requirements on intra-state transportation.

•• Federal Motor Carrier Safety Regulations (49 CFR Parts 350-399) also apply to any "commercial motor vehicle." For this purpose, a "commercial motor vehicle" is a "self-propelled or towed vehicle used on the highways in interstate commerce to transport passengers or property if the vehicle (A) has a gross vehicle weight rating or gross vehicle weight of at least 10,000 pounds, whichever is greater; (B) is designed or used to transport more than 8 passengers, including the driver) for compensation; (C) is designed or used to transport more than 15 passengers including the driver, and is not used to transport passengers for compensation; or (D) is used in transporting [certain hazardous] material." 49 U.S.C. §31 132(1). "Gross vehicle weight rating" (GVWR) means the value specified by the manufacturer as the loaded weight of a single motor vehicle. 49 CFR §390.5

••• Commercial Driver License/Drug & Alcohol Testing. CDL/D&A testing also apply to drivers of any vehicle whose GVWR or actual GVW is more than 26,000 Ibs. CDL/D&A testing is required of drivers of 16+ passenger vehicles on trips that "affect” interstate transportation, even if they don't cross a state line. 49 CFR §383.5; 49 CFR §382.103(a)(I).

•••• Employee-drivers (and others) ''with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of [49 U.S.C. §31502] are generally exempt from Fair Labor Standards Act overtime pay requirement. 29 U.S.C. §213(b)(l). However, Pub. Law 110-244, the SAFETEA-LU Technical Corrections Act, §306(a) and (c), effectively repealed the exemption for drivers of vehicles "weighing 10,000 pounds or less," regardless of the number of passengers the vehicle may carry. The repeal is not codified in 29 U.S.C.§213.

(I) Employee-taxi drivers are separately exempt from FLSA overtime pay requirement without regard to DOT's authority. 29 U.S.C. §213(b)(l7).

(2) DOT has power to regulate hours of service, but has not done so.

(3) Employee-drivers of any vehicle "weighing 10,000 pounds or less," are subject to the FLSA overtime pay requirement, notwithstanding the DOT's authority. Pub. Law 110-44, SAFETEA-LU Technical Corrections Act, §306(a) and (c). See Note [••••] above. Thus, drivers of all 1-8 passenger vehicles, many or all 9-15 passenger vehicles, and perhaps even some vehicles carrying more than 15 passengers are subject to the FLSA overtime pay requirement.

(4) "Direct compensation" means "payment made to the motor carrier by the passengers or a person acting on behalf of the passengers for the transportation services provided, and not included in a total package charge or other assessment for highway transportation services." 49 CFR §390.5

(5) Congress has stated that the FMCSRs "that apply to interstate operations of commercial motor vehicles designed to transport between 9 and 15 passengers ... shall apply to all interstate operations of such carriers regardless of the distance traveled." SAFETEA-LU §4136, effective Aug. 10, 2005. This overrules a regulatory distinction made between vehicles that traveled more than 86.3 statute miles from the driver's normal work reporting location, 49 CFR §390.3(t)(6)(ii), introduced in amendments to the regulations published at 68 Fed. Reg. 47860 (Aug. 12, 2003). The inartful statutory repeal (a) refers to "such carriers" without an antecedent; and (b) does not mention the second regulatory distinction, between transportation provided for direct compensation and transportation ancillary to the provision of other services, e.g., by a hotel or camp shuttle van, see Note (4) above. It also appears to require the regulations to apply to operations of I-8 passenger vehicles by an operator that also operates any 9- I5 passenger vehicle; however, the FMCSA has not, to date, amended the regulations to so interpret the law.

(6) $1.5 million insurance required if a commercial motor vehicle.

(7) Except for MCS-150 and MCS-150A, accident register, and marking (see columns 5, 6, and 7).

(8) Limited to DOT# if not a commercial motor vehicle. 49 CFR §390.3(t)(6).

© Taxicab, Limousine & Paratransit Association

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This Legislative Alert is published by the TLPA ACTION FUND, which is dedicated to addressing our industry's federal legislative and regulatory issues.

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