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Save-us-from-California amendment passes

Nov. 5, 2015
Several trucking-related amendments to the highway bill were considered on the House floor Wednesday.

An amendment aimed at giving truckers relief from California’s minimum wage rest break laws was approved by the House Wednesday evening, in a second day of debate over the six-year, $325 billion highway bill under consideration this week. A provision to add hundreds of thousands of safe but unrated trucking companies to a proposed carrier hiring standard was withdrawn, however. And language to undo existing highway bill provisions that remove CSA scores and launch a graduated CDL program for truck drivers under 21 years old both failed.

Rep. Denham

The California-related amendment by Rep. Jeff Denham (R-CA) prohibits states from imposing labor laws or regulations on companies whose employees are subject to federal Dept. of Transportation hours of service (HOS) rules. Additionally, states may not enact or enforce laws that require a motor carrier that pays employees on a piece-rate basis to pay those employees separate or additional compensation, provided the compensation is equal to or greater than the applicable hourly minimum wage of the state.

The legislation is needed because California courts have repeatedly failed to recognize that the federal preemptions under the Federal Aviation Administration Authorization Act (F4A) apply to interstate trucking operations, explained Richard Pianka, lead litigator and acting general counsel for the American Trucking Assns.  When the U.S. Supreme Court declined to consider a recent appeal, the industry’s remaining recourse became Congress.

Specifically, 4FA says that local or state laws cannot interfere with price, routes, or services.

“Meal and rest break requirements at the state level prevent carriers from operating on a nationally uniform basis,” Pianka told American Trucker. “You can’t do a six-hour run California. You can under federal rules. So if you’re terminals are located with federal rules in mind, and now you can’t make the same runs, you have to start reconfiguring everything—so that’s a huge impact.”

Likewise, California wage-and-hour enforcement policies and related court decisions have made attempts to retain a compliant mileage-based pay plan for truckers exceedingly complicated, to the point of being absurd.

“It prevents motor carriers from using a pay system that’s based on productivity and efficiency,” Pianka said. “And that was exactly why Congress originally preempted states from regulating the trucking industry. It wanted the market to shape industry to make it as productive and efficient as possible.”

He emphasized that the amendment isn’t designed to undercut state minimum wage rates, or that companies only need to pay that hourly rate.

“If you think the California system is just fine, then don’t worry about this,” Pianka said.

California Assembly Bill 1513, signed into law last month, is a labor code update designed to deal with agricultural wage issues but which also severely limits piece-rate compensation for carriers. And, without the Denham amendment, trucking companies large and small can expect the legal aftershocks to continue.

Joe Rajkovacz, director of governmental affairs and communications for the Western States Trucking Assn., points to a $100 million class action lawsuit facing Wal-Mart, a company which offers “the best private sector driving job in the country.” Simply, in California drivers and “shyster lawyers” are being very successful at suing companies because their employees were not paid specifically for activities such as fueling the truck.

“Never mind, when you add it all up, this guy’s getting paid $30 an hour for his time. He wasn’t directly compensated for whatever that bottom-line time was, at least a minimum wage,” Rajkovacz said. “These geniuses think they’re uplifting drivers by screwing with motor carriers, but the solution is to say, ‘Fine, we’re paying all of our drivers minimum wage’—but then you’re going to have to revert to some sort of comparison contract or incentive program on top of that.”

The catch for that kind of compensation plan is companies then run into “an accounting nightmare” because of other California wage laws, he adds.

As to the meal and rest break complications, Rajkovacz points to a five-truck fleet that has had a $1.5 million judgment levied against it for violating California rules.

To explain the basic impact, Rajkovacz poses a scenario in which an out-of-state carrier employs a driver who lives in the state.

“The minute that truck crosses into the California, you’d be really wise to start having the driver log in compliance with the state meal and rest break laws: a 10-minute break after four hours; a lunch break at five hours; if he doesn’t have an off-duty lunch break, you have to pay him for it—and you still have to comply with,” he said. “This is what’s happening in California. Interstate motor carriers are paying out gazillions of dollars: They’re federally regulated, but they’re being told to comply with state law. It’s incredible, yet it’s happening.”

The bottom line is that a lot the trucking association’s members have either closed up shop or moved out of state, while others are looking at shifting from asset-based operations to an independent contractor model.

“But that’s a whole, ’nother issue,” he added.

The Denham amendment passed 248-180 on a largely partisan vote won by Republicans.

To add unrated carriers to hiring standard

Also on the House floor Wednesday, Rep. John Duncan (R-TN) withdrew his amendment to add safe, unrated carriers to a highway bill provision that would protect brokers, shippers, and receivers from liability claims if they use carriers that have a “Satisfactory” safety rating from the DOT.

The result is that more than 400,000 carriers, mainly small businesses, will be denied access to the marketplace if the hiring standard legislation stands as-is, suggested Rajkovacz—who also noted that carriers with a “conditional” rating had been unfairly left out of the discussion altogether. He called the provision “a get out of jail free card” for shippers and brokers.

“We’re stuck with that original language right now,” he said. “It really would convey a lot of market power to [large carriers]. Is this going to survive the highway bill conference committee? It can’t—it simply can’t. Truckers get nothing out of this. Where it stands, it’s not good for the industry or small businesses.”

To keep CSA scores public

In other trucking-related legislation, an amendment offered by Rep. Lois Frankel (D-FL)called for carrier safety scores to remain publicly available during the study of the CSA program required by the highway bill, and the amendment would add a provision to the hiring standard to prohibit the hiring of "high risk carriers" as defined by the Federal Motor Carrier Safety Administration, and removes several studies.

That amendment failed on a voice vote.

To block graduated CDL program

Rep. John Lewis’s amendment to strike the graduated commercial driver's license program language in the highway bill and replace it with a study on the safety of intrastate teen truck drivers failed, 181-248.

About the Author

Kevin Jones | Editor

Kevin has served as editor-in-chief of Trailer/Body Builders magazine since 2017—just the third editor in the magazine’s 60 years. He is also editorial director for Endeavor Business Media’s Commercial Vehicle group, which includes FleetOwner, Bulk Transporter, Refrigerated Transporter, American Trucker, and Fleet Maintenance magazines and websites.

Working from Little Rock, Kevin has covered trucking and manufacturing for 15 years. His writing and commentary about the trucking industry and, previously, business and government, has been recognized with numerous state, regional, and national journalism awards.

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