Issues concerning the payment of “down time” or “waiting time” time to employees, in all types of industries, tend to be one of the most controversial and litigated areas of wage-and-hour law. There is a common misconception among many limousine companies that chauffeurs are not entitled to be paid for time spent waiting for work to be assigned. But determining exactly when, and under what circumstances, they should be paid is a difficult analysis, even for lawyers and judges.
Courts throughout the country have failed to establish a uniform test to use when analyzing these types of cases. As a result, a court in one state examining a set of facts might very well come up with a different conclusion than a court in another state examining a similar set of facts.
In general, however, employees must typically be paid for waiting time if the employer is benefiting more than they, and if the employee lacks discretion as to whether or not he waits.
Three Questions to Ask
In looking at whether waiting time must be paid to employees, you have to keep three things in mind:
* What did the employer and employee agree to and did they follow that agreement?
* Who is deriving the greater benefit, the chauffeur or the company?
* Is the situation a waiting-time issue, which typically involves down time during the course of the workday or shift? Or is it an “on-call” issue, which typically involves time outside the workday when the employee is not technically working but might be called to work at any time.
In simple terms, when your chauffeur is idle between fares, that is waiting time. When he’s at home waiting to be called to work, that’s “on-call” time. Chauffeurs are generally not compensated for on-call time.
Determining whether a chauffeur should be paid for certain periods of his workday must be made with extreme care, since mistakes can be very costly. For example, chauffeurs can be awarded “liquidated,” or double, damages unless you can demonstrate that you acted in good faith when failing to pay them the proper amount of overtime.
Additionally, employers – including supervisory personnel, or even owners or investors who do not have day-to-day control over the operations of a company – who are found to have violated federal law may be held personally liable for unpaid wages and overtime compensation.
There are a lot of limousine operators who think that chauffeurs are not entitled to overtime compensation due to a provision of the Federal Labor Standards Act commonly known as the “taxi exemption.” Under this exemption, a company does not have to pay overtime to “any driver … engaged in the business of operating taxicabs.”
But there have been several court cases where it has been found that this provision does not apply to limousine companies, airport shuttle services, and other ground transportation operators. Unless you are operating a true taxi company, you should not rely upon this exemption because the courts have construed it quite narrowly.
No Uniform Rulings by Courts
Suppose that a chauffeur’s first job of the day is to take an executive to the airport for an 8 a.m. flight and his second assigned job starts at 10 a.m. Would you have to pay the chauffeur for the time in between jobs? Couldn't he do whatever he wanted during those two hours? Is that waiting time, or is it on-call time?
This simple example illustrates that there are no hard-and-fast answers to down-time issues. There is a wide divergence in opinions among the state and federal courts that have examined these issues, and there have been only a few industry-specific cases.
But in one case decided by the U.S. District Court for the District of Columbia entitled Caryk v. Coupe, a group of chauffeurs filed a lawsuit seeking to recover wages and overtime compensation from a limousine company that formerly employed them. Part of the chauffeurs’ claim concerned waiting time.
A waiting-time agreement between the chauffeurs and the company stipulated that chauffeurs would be paid for waiting at the office for calls, provided they got to the office by 8:30 a.m. If they arrived after that time, they would not be paid for the time they spent waiting.
The chauffeurs were under no obligation to wait at the office. In filing the lawsuit, the chauffeurs sought to recover unpaid time spent waiting. In other words, chauffeurs wanted to be paid if they arrived late, contrary to their agreement with the company. The court found the chauffeurs were not entitled to any waiting time that did not fall within their agreement with the limousine company. The court also noted that the waiting time agreement appeared to have been offered solely as an incentive to have a ready pool of chauffeurs available in the morning for unexpected calls.
Develop a Written Policy
The Caryck case teaches us the value of having a written policy detailing how waiting time is handled. While there are no guarantees, a policy which sets out the times and circumstances under which chauffeurs are paid for waiting time and which provides the employee the choice of opting out can limit when waiting time must be paid.
The key to the issue is whether employees have the option of waiting. If you require employees to wait, waiting time typically must be paid.
If you give employees the option of being paid for waiting in exchange for their willingness to do something, such to come to your office by a specified time to wait for calls for service, their failure to comply with the terms of your offer may discharge you of the obligation of paying waiting time.
Rather than having a policy, some employers list these criteria in employment agreements between the employee and employer. Courts that have acknowledged these agreements have evidently concluded that employees and employers are in a better position to assess the approach to waiting time than the court is.
You cannot, however, simply create an employment agreement stating employees cannot be paid for down time. An employee cannot sign away his right to be paid the minimum wage or overtime compensation.
If a question about waiting time arises, I recommend that you consult local legal counsel to determine how the courts in your state approach the issue.
Some limousine companies try to get around the problem by designating their chauffeurs as independent contractors. But merely changing a chauffeur’s status from “employee” to “independent contractor” rarely succeeds. Courts routinely disregard such titles and look at the actual facts to determine if an individual is a genuine independent contractor for whom waiting time need not be paid.
- Roberta Pike is a partner with Pike & Pike in Bellmore, N.Y. (www.pikeandpike.com). The firm specializes in commercial litigation, including workers compensation and unemployment insurance matters, employment practices, franchising and business practice matters.