Federal OT Pay, “Black Boxes” Top Industry Concerns in DC

Posted on May 11, 2011

The New York team lobbying on Capitol Hill consisted of Avi Mazouz, First VP of the Luxury-Base Operators Association; Arthur Messina, CEO of Create-A-Card Inc.; David Eckstein, President of Valera Global; and Douglas Schwartz, President of the Long Island Limousine Association.
The New York team lobbying on Capitol Hill consisted of Avi Mazouz, First VP of the Luxury-Base Operators Association; Arthur Messina, CEO of Create-A-Card Inc.; David Eckstein, President of Valera Global; and Douglas Schwartz, President of the Long Island Limousine Association.

DAY ON CAPITOL HILL: The National Limousine Association and its advocates made direct connections last week to advance operator goals on federal labor wage rules, a law requiring electronic recorders on commercial vehicles, and the long-awaited RIDE Act Amendment.

WASHINGTON, D.C. — The return of divided government to the nation’s capital has brought more opportunities for operators to get heard and push their regulatory goals forward, as the NLA experienced during its annual Day On The Hill lobbying event May 4.

About 60 operators and industry supporters divided into lobbying teams that visited 107 offices of Senators and Representatives throughout the day. Organized by the NLA’s hired lobbying firm, Washington, D.C.-based CORNERSTONE GOVERNMENT AFFAIRS, the teams consisted of NLA board directors, association presidents, and operator members of state associations from around the nation.

“It’s important for operators to come and talk to Congress and talk about the issues,” said Greg McDonald, a Cornerstone vice president and lobbyist who works closely with the NATIONAL LIMOUSINE ASSOCIATION. “This is a much more effective way to change policies, when business owners talk about these issues. All of these operators did a good job in an environment foreign to them. Coming to DC can be a nerve wracking experience.”


Most stressful to industry nerves this year is the issue of whether operators should pay overtime wages on gratuities billed to clients, a very common industry practice convenient to chauffeurs and clients alike. Amid aggressive and more frequent federal labor and wage audits, the Department of Labor loosely interprets federal wage laws to consider gratuity amounts worthy of “time-and-a-half” overtime pay status. Such actions have resulted in higher labor and bookkeeping costs for audited operators while blurring the line between a wage and a tip, potentially setting a harmful precedent.

“On tips, this is one of the issues that has been identified where we hopefully see some bipartisan movement,” McDonald said. “We sat down with some of the most liberal and conservative members in the House, and both agreed this makes no sense. The regulation was designed to protect employees but it has a strong practice of hurting employees.”

NLA members and lobbyists delivered a prepared letter to the Congressional offices for legislators to sign and send to U.S. DEPT. OF LABOR SECRETARY HILDA SOLIS, asking her to have labor officials meet with industry representatives and reconsider the DOL position on the issue. Before Hill Day, Cornerstone lobbyists met with the staffs of REP. JOHN KLINE, R-Minn., chairman of the House Education and Workforce Committee, and SEN. MICHAEL ENZI, R-Wyoming, the ranking member on the Senate Health, Education, Labor and Pensions Committee, to draft the letter and ask the influential lawmakers to intervene on the industry’s behalf by persuading the Department of Labor to adopt a more reasonable point of view on classifying tip income.

In coming weeks, lobbyists and industry advocates will follow up on the letters with the Congressional representatives they visited, said Louie Perry, vice president at Cornerstone and lead NLA lobbyist. “Hopefully five to 10 or more [legislators] will send the letter to DOL so we can sit down and find agreement.”

Chauffeurs already earn hourly wages and overtime on those wages beyond 40 hours per week in accordance with federal labor laws. But auditors from the Department of Labor claim that a gratuity, when added to a client bill for limousine service, should be considered a wage.

Wages are “not an item of contention with the DOL,” Perry emphasized. “It’s the gratuity imposed on the bill that the DOL would like to treat as wage income. We don’t treat it that way.”

So far, several chauffeured transportation companies in the Northeast and along the West Coast have endured grueling audits, resulting in painful back wage costs and fines. “There have been a handful but they are growing and it is becoming a significant issue,” NLA President Diane Forgy told LCT. Making the chauffeur and client completely responsible for tipping is inconvenient for both, especially when many companies prefer to arrange and pay for the limo rates and tips for their executives and employees in advance, she said.


Close on the heels of aggressive labor audits comes a Department of Transportation rule requiring commercial vehicles authorized by the DOT to carry EOBRs, known in bureaucratic parlance as “Electronic On Board Recorders.” They are comparable to black boxes on commercial airliners that record technical data. In the case of vehicles, the “boxes” could document data on drive times and engine running times along with speed and other usage metrics. Such information could later be reviewed to evaluate safety performance and compute labor drive time.

Spurred by high-profile motorcoach crashes and truck driver fatigue, the DOT wants to require all regulated commercial vehicles to install these devices, and is holding a public comment period on the rule through May 23.

“If the DOT did do something, it would be in search of a problem that doesn’t exist when applied to commercial cars and chauffeured fleets,” McDonald said.

The NLA will officially enter comments with the DOT opposing the measure, given that chauffeured transportation is markedly different from other forms of ground transportation and has not seen the frequency of fatal crashes and driver fatigue incidents associated with the motorcoach and interstate trucking industries.

“The EOBRs are a costly overkill,” Forgy said. “We are not in support of requiring an EOBR in every vehicle, regardless of the safety record. We’re not in the same league as the motorcoach industry. We do not have the same exposure and don’t operate the same way.”

Of concern are potential federal efforts to reduce or further regulate hours of service for passenger carriers, Perry said. The trucking industry has submitted studies countering those from the DOT on the subject of driver fatigue, which the agency is using to justify its aggressive regulation. “We’re trying to get in front of it,” Perry said. “We’re joining with a coalition of truckers to fight this proposal.”


Regulations on using cell phones and texting devices behind the wheel are solidly in place and consistent with industry practices, Perry said. The final version of the DOT rules still allow hands-free technologies, such as the voice-activated BlueTooth, and one-push button dispatch devices in commercial vehicles. Industry members had been concerned last year that federal regulators would sweep away the legal use of hands-free technologies in commercial vehicles.

“The distracted driving issue is behind us,” Perry said. “The DOT came out with two rules, one banning handheld cell phones on commercial motor vehicles, and the other banning hand-held texting devices. All we were doing last year was talking about those rules coming, and that are now in effect. Eighty to 90% of NLA members already banned those practices anyway.”


The amendment to the 2002 Real Interstate Drivers’ Equity (RIDE) Act qualifies as the NLA’s recurring signature issue, given the challenge of attaching the proposed amendment to viable legislation that can be passed by both Houses of Congress amid shifting partisan power dynamics. Cornerstone hosted a successful NLA fund-raiser Tuesday, May 3 at its Capitol Hill area offices for one of the key sponsors of the bill, REP. LAURA RICHARDSON, D-Calif., who introduced the measure into the House as HB1691 that same day.

The NLA also brought on a new co-sponsor of HB1691 in the House, REP. ALLEN WEST, R-Fla., and reaffirmed support from the Senate co-sponsors of the RIDE Act Amendment, SEN. DAVID VITTER, R.-La., and SEN. FRANK LAUTENBERG, D-N.J. Perry predicts the most amendable vehicle to advancing the amendment will be the Transportation Reauthorization Bill that has to clear both Houses.

The RIDE Act Amendment would clarify the original 2002 act so that states and political subdivisions such as airport authorities that receive federal funding cannot charge fees that single out vehicles providing prearranged interstate ground transportation service. It also would prevent any transportation terminal from charging a special fee, other than what is charged to the general public, to for-hire vehicles for access or use of terminal facilities.

— Martin Romjue, LCT editor

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