As a chauffeur driver, you know how hard you work and how many hours you put in – all to earn a fair day’s pay for an honest day’s work. However, have you ever wondered exactly what it means to receive a fair day’s pay? It’s time you learn the law so you can ensure that you are receiving all the money you’re entitled to under the law.
There are many wage related issues when it comes to chauffeurs – I know because I have represented and recovered wages for many chauffeurs. For instance, if a company charters a bus and pays the employer a gratuity beforehand, does that gratuity belong to me or to my employer? Or, am I entitled to overtime or can my employer pay me a flat-rate per trip to avoid paying overtime? Do I get to keep all the tips or gratuities that I earn? These are just some of the questions chauffeurs face and that I will answer in this article. Many of the issues discussed in this article are things that I have personal experience in representing and advising chauffeur drivers with.
Am I Entitled to Overtime as a Chauffeur Driver?
You are not exempt from overtime just because your employer says you are or because you are paid a flat rate, salary, per trip rate, day rate, etc. You must fit within a specifically, defined exemption. With chauffeurs, there are two common overtime exemptions chauffeur companies often attempt to cloak their employees with to avoid paying overtime: 1) Motor-Carrier Act Exemption; and 2) Taxi Cab Exemption. However, each overtime exemption is very specific and whether you are exempt or not exempt from overtime requires consultation with an employment lawyer.
Before continuing, I cannot stress enough, regardless of whether you are paid hourly, salary, a day rate, or a per trip rate, you may still be entitled to overtime pay. Your legal right to overtime is more than just about salary v. hourly pay.
Fixed Rate of Pay
Limousine companies are notorious for paying their drivers a flat rate for each trip or even a daily rate. However, if you are not exempt from overtime (see above) then you are entitled to be paid a premium for any hours you work over forty in a week. This remains true even if your employer did not keep track of the hours you worked.
In addition, you are also entitled to receive at least minimum wage $7.25 for every hour you worked in a seven-day period. This includes hours spent waiting to pick up a customer or waiting for a flight to arrive or any other time that you are engaged to be waiting.
I commonly see overtime and minimum wage violations when chauffeurs are being paid a fixed rate (i.e. not hourly).
Chauffeur Tips v. Service Charges: Is there a Difference?
Yes, there is a significant legal difference between a service charge and a tip. A “service charge” is something that is mandatorily imposed by your employer upon a customer and is not subject to negotiation. Whereas a “tip” is something that is completely left up to the discretion of the customer – for instance cash that a customer hands to you, as a token of appreciation for your good service.
The difference between a tip and a service charge is legally significant because a “tip” belongs exclusively to you – the employee. On the other hand, a service charge legally belongs to your employer. The Department of Labor issued a letter to the National Limousine Association – who opined on this situation. In the Opinion letter, the DOL opined that as long as the customer is advised that a gratuity is “voluntary” then it is a tip and belongs to the chauffeur employee. The DOL advised that if there is language on a prepaid invoice that lists the gratuity as “suggested gratuity” then its subject to negotiation and therefore a tip – belonging to the employee. Your employer must distribute 100% of tips to employees.
However, if your employer does not include the “suggested” language and these amounts are service charges (and not tips) then there some additional caveats to watch out for. For instance, if your employer voluntarily elects to give you the service charge (or any part of the service charge) as part of your wages then that service charge is part of your overtime rate. Example: an employee is paid $10.00 per hour and the employer pays out $50 in service charges over the course of one week. Moreover, the employee worked 48 hours in the one week pay period. To calculate the overtime rate for the 8 hours of overtime, a lot of employees assume that they are to be paid 1 ½ times $10.00=$15.00 per hour for overtime. That is not the case, the employee’s overtime rate would actually be calculated as follows:
Step 1: Regular pay=($10.00 x 48 hours) + $50 = $530
The $50 service charge is included in the regular pay.
Step 2: Regular rate of pay = $530/48hrs = 11.04 per hour.
This is the regular rate of pay; the overtime rate is 1 ½ times this rate
Step 3: Overtime Compensation = $11.04 x .5 x 8 hours = $44.16
Step 4: Total weekly compensation=$530 + $50 + $44.16 =$624.16
Do I Have to Pay for That? Wage Deductions.
Chauffeurs are oftentimes illegally required by their employer to pay for various items such as uniforms, cell phones, iPads, vehicle damage, car accidents, and other items incidental to employment. However, if you are paid less than $7.25 per hour in direct wages (i.e. a tipped employee), your employer is probably violating the law if he or she makes any deductions from your wages or tips other than deductions for taxes or credit card fees.
Don’t be fooled into thinking that if your employer gets you to sign an agreement, authorizing the deduction that someone it is now legal. In other words, even if you signed a piece of paper authorizing your employer to deduct for example, damage you caused to the employer’s vehicle, this does not make the deduction legal.
Also, many employers attempt to circumvent these laws by changing the terminology – i.e. not a deduction but a loan or advance to the employee. Take for example, a deduction for a uniform or damage caused to an employer vehicle. These types of deductions are considered a “cost of doing business” and may not be passed along to the employee if the deductions cut into the minimum wage pay. If your employer tries to say that the money is an advance or a loan because they loaned you money for the uniform or for the car accident, this does not make it legal. Ultimately, whether a particular wage deduction is improper or proper is a question that can only be deciphered with legal consultation.
Last, any deduction that is not authorized by law (e.g. taxes or child support) or by the employee in a signed writing is a violation of the Texas Payday Act. You should consult with an attorney to determine whether you have a claim under the Texas Payday Act or any other wage laws.
If you have questions about your wages, overtime, tips or gratuities, service charges, or wage deductions, please call the wage and overtime attorneys at Herrmann Law, PLLC 817-479-9229 or submit your case online.