SAFETEA-LU Affects Businesses

By Earl Eisenhart

When Congress passed the Safe, Accountable, Flexible and Efficient Transportation Equity Act (SAFETEA-LU) in 2005, there was an error made in the drafting of this legislation that inadvertently provided a new right to overtime pay for thousands of drivers operating commercial vehicles under 10,001 lbs. Many of these vehicles are employed in the distribution of food products, especially direct-store deliveries.
A longstanding exemption from the Fair Labor Standards Act for “any employee with respect to whom the Secretary of Transportation has the power to establish qualifications and maximum hours of service” was repealed. The consequence is that many employees who were previously subject to Department of Transportation (DOT) regulation now are subject to U.S. Department of Labor regulation under the FLSA.
This means that businesses of all sizes now are exposed to millions of dollars in lawsuits for overtime pay dating back to August 15, 2005, when SAFETEA-LU was signed into law. Moreover, the DOT, which now supports a return to the pre-highway bill status quo, has said that without the needed change, it will be seriously impeded in carrying out its safety mission because it will no longer have authority to regulate certain commercial vehicles.
Many businesses nationwide remain unaware that they may no longer be covered under the Motor Carrier exemption from the FLSA as a result of this unintended drafting error in SAFETEA-LU. In fact, many companies have learned of this issue through the filing of individual and class action lawsuits demanding additional pay retroactive to the passage of SAFETEA-LU on August 10, 2005.
A coalition of interested parties under the leadership of the Snack Food Association is working to remedy this problem in Congress. We will keep you informed.
Editor’s Note: Earl Eisenhart is SFA transportation policy advisor.