For years, truck driver pay laws have dictated truckers’ compensation. For some, truck driver pay per mile works out to less than minimum wage for these workers, a likely violation of the federal Fair Labor Standards Act (FLSA). Truck driver employee rights are now at the forefront of litigation across the country.
A recent Arkansas federal court decision may change how truck drivers are compensated for their time. In October 2018, the U.S. District Court in the Western District of Arkansas, Fayetteville Division, denied a motion to dismiss a lawsuit against defendant PAM Transport, which was accused of violating the FLSA.
PAM Transport is an Arkansas trucking company founded in 1980. In 2016, three of PAM’s truck drivers filed a lawsuit seeking to represent nearly 3,000 other drivers in a class action case.
Traditionally, truck drivers are paid by the number of miles they drive, which means they are not paid for time spent waiting for shipments to be loaded and unloaded or for hours they are forced to wait out bad weather or other circumstances beyond their control. This downtime obviously affects truck drivers’ pay.
The courts have indicated that trucking companies are fully aware that drivers have no choice but to spend time waiting, and have made clear that drivers should be compensated for that time.
In the PAM lawsuit, the court found that the company’s long-haul truck drivers were entitled to at least minimum wage, payable up to 16 hours per day. The driver’s only unpaid time was the eight hours allowed to sleep.
According to guidance released by the Department of Labor in July 2019, drivers are not required to be compensated for the eight hours they are expected to be sleeping. However, there may be exceptions to truck driver pay laws. If truckers are required to be on call or do paperwork during these eight hours, this time may be counted as time spent on the clock.
What is the Average Truck Driver Pay?
Average yearly earnings for a semi-truck driver in 2020 were about $47,130, which was a slight increase from $43,590 four years earlier. This amount is subject to variations, both up and down, depending on employment status, location, and training. Truck driver pay per mile affects the total annual income.
Evolution of Truck Driver Pay Laws
The PAM lawsuit is part of a wave of litigation that in recent years has challenged the way in which truck drivers have been compensated. Swift Transportation agreed to pay up to $100 million to settle claims that it misclassified truckers as independent contractors when in fact they were employees eligible for minimum wage and other protections, according to Business Insider.
Truck driver misclassification may prevent some drivers from the benefits of being an employee, such as minimum wage, overtime, health insurance, and more. Contractor truck drivers must also pay for their own truck, fuel, auto insurance, maintenance, and more.
In earlier cases, a Nebraska court ordered Werner Enterprises to pay $780,000 to 52,000 student truck drivers who were not properly paid for their work, and C.R. England paid $2.35 million to cover unpaid wages for its drivers.
Truck Driver Pay Per Mile
Since 1938, the Fair Labor Standards Act (FLSA) has required nearly every worker in the U.S. to earn at least a set minimum wage. But because compensation for truck drivers is often determined by distance instead of time, pay per mile truck drivers have been an exception to this rule.How much do truck drivers get paid per mile? Most truck drivers’ pay per mile falls somewhere between 27 cents and 40 cents.
As a result of the low pay, the turnover rate for truck drivers is 90% or more at companies that don’t want to change the way they compensate their drivers. It’s no wonder nearly 900,000 truck driving positions are open across the country. Few people jump at the chance to be overworked and underpaid.
Fortunately, the courts and truck driver pay laws are starting to recognize that truck drivers deserve to be paid minimum wage in line with FLSA regulations. When paid a living wage for every hour they are on the job, truck drivers are more inclined to stay with a company.
What Impact Does Trucker Downtime Have?
There are many different rules and regulations affecting truckers today, but required downtime can lead to frustrations. Truckers are known to attempt to avoid downtime because of the dip in pay.
Drivers who are detained at shipping and docking locations can be stuck there for hours. This issue served as an impetus for legislators to address the issue of trucker downtime. Studies have found that the majority of truckers have been detained in some way or another in their previous 30 days of work, according to the Commercial Carrier Journal.
Those truckers who get paid for every mile or job they pick up during a particular day have a strong motivation to drive as many hours as possible, which obviously raises average truck driver pay. When downtime is required but the trucker isn’t being paid, some believe this is a violation of how workers should be treated.
Information from the National Transportation Institute shows that issues over average truck driver pay are getting more coverage, which led to changes in the first quarter of 2019 and beyond. Some recruiters are continuing to use sign-on bonuses to address the massive trucking shortage in the U.S., but other companies are also looking at guaranteed pay as an option.
Much of the shift to guaranteed pay came about as the result of drivers who spent hours waiting at loading docks but were not compensated for that time, Transport Topics reports.
Overworked, tired, and underpaid truck drivers are more apt to drive fatigued, which endangers all motorists. Paying truckers for the time they are working, though not necessarily driving, does not incentivize them to evade downtime.
How Much Does Down Time Affect Truckers?
According to a study by the American Transportation Research Institute, the amount of time truckers spend waiting for their trucks to be loaded or unloaded has increased over the past several years. The study examined wait times between 2014 and 2018.
While most truckers spend an average of two-and-a-half hours waiting at warehouses, some may wait for more than twice that time. According to the research, the number of truckers who reported having to wait at warehouses more than 71% of the time increased by 40%. Additionally, more than 9% of them claimed to have waited for more than six hours at least once, according to Business Insider. This is up from 7% percent who claimed to experience six-hour wait times in 2014.
However, it seems that more truckers are being compensated for this time. While only 62.8% of truckers reported being paid all or part of the compensation they were owed for waiting in 2014, more than 71% reported being compensated for wait times in 2018.
Income Appeared to Increase Prior to Pandemic
In May 2020, the American Trucking Association (ATA) released results of the 2019 Driver Compensation Study, which was reviewed by DC Velocity, a logistics multi-media company.
According to the study, truck drivers who drove nationally earned an average of $58,000 in 2019, an increase of $6,000 from the 2017 study.
Whether those gains can hold steady through the COVID-19 pandemic remains to be seen.
New freight contracts have declined by 60% to 90% since the pandemic began, and empty runs have increased by 40%, according to a report from Reuters. Those figures are from the International Transport Union (IRU) in Geneva that includes truckers from 80 countries.
The American Truck Association reports that 97% of American trucking companies have a fleet of fewer than 20 semis. Some 91% have six or fewer trucks, which means workers usually depend on single assignments rather than repeated trips based on contracts.
ERL Intermodal had to lay off six drivers and the remaining drivers received a 30% decrease in pay because the work just isn’t there, Reuters reported.
At one point, ERL Intermodal agreed to rent several refrigerated trailers to the federal government, which has been using them as temporary morgues due to coronavirus deaths.
As demand for trucking needs has decreased, so has the pay offered to complete the jobs that are available. A Pennsylvania trucker told Reuters that many of the jobs are offering such cut rates of pay that there wouldn’t be enough to cover his operating costs.
Transportation experts fear the longer the economy is slowed by COVID-19, small, independent trucking companies may have to declare bankruptcy.
California’s AB5 May Affect Truck Drivers
Truck drivers in California are now facing new regulations that may affect their employment status. California Assembly Bill 5, which went into effect on Jan. 1, 2020, requires companies to reclassify many independent contractors as employees, with a few exceptions. AB5 is targeted in particular at members of the gig economy, like ride-hailing giants Uber and Lyft, as well as meal delivery services like Door Dash, which use millions of independent contractors without paying them overtime and benefits or guaranteeing them minimum wage or worker protections. But AB5 affects any business that uses independent contractors as part of its regular course of work, which includes many trucking companies.
AB5 establishes a three-part test (the “ABC test”) to determine whether a worker is considered an independent contractor or an employee under the law.
The California Trucking Association (CTA) was awarded a preliminary injunction that barred the enforcement of AB5 on the industry just before the law went into effect, and the order has since been extended.
In the 2020 general election, Proposition 22—promoted by major gig companies—was passed, which pushed back against AB5 for independent contractor drivers like those who drive for Uber or Lyft. While Prop 22 does not include truck drivers, the approval of this proposition may indicate that AB5 is not a law of “general applicability,” California Trucking Association attorney Andrew Tauber wrote in a letter to the court.
“It specifically targets the trucking industry,” he said.