Bells Are Tolling For Illegal Pay Methods

Jim Luff
Posted on July 8, 2009
AS THE INDUSTRY WATCHES: The Bell Transportation wage saga might be an ideal time to examine your own pay methods before a judge decides what is right and wrong in payroll arrangements — as was the case recently with one of the largest limousine companies in the nation and its employee chauffeurs.
FAIR PAY: It is important to note the word, “employee.” When people perform work for a company, they are either an employee or a contractor. It is very black and white. Methods of compensation are equally black and white, but for some reason, livery operators feel that labor laws designed to protect employees are optional for them.
In the particular case of Las Vegas-based Bell Transportation, there were many issues brought up beyond the failure of Bell to pay overtime and to pay for all hours worked. Some of the issues raised included assessing a fee to a chauffeur for daily car washes, requiring chauffeurs to supply their own napkins, and “fining” drivers for failing to return the car in an immaculate condition.
However, the “fine” was paid to the company and the next chauffeur taking over the “less than perfect” vehicle was forced to make the vehicle right without any compensation as Bell does not pay its employed chauffeurs for prepping a car or even driving to the pickup location or staging location. Instead, it opts to pay them starting with the beginning of the client service.
Everything above is something that might be expected in a contractor relationship where Company A pays Company B, the contractor, a specific amount of money for performing the job. But Company B owns the car, pays for insurance, buys the fuel, and is free to take or refuse any job presented to him. 
In the case of employee chauffeurs, they are taught to do things a certain way and operate vehicles fully owned, insured, and fueled by the company that employs the chauffeur.
Employees cannot be charged for anything other than loss or breakage that occurs as a result of gross negligence. That means if you make them wear a “distinctive uniform,” you must supply it at your expense. If the “uniform” consists of a dark suit and that same dark suit can be worn to church, an employee may supply his  own uniform, according to California labor laws.
In terms of payment, federal law is very specific that employees must be paid “for all hours worked, not less than minimum wage.” It does not say that you can have them come in, pre-trip the car, drive to the location, and then start getting paid — and that this is acceptable because the chauffeur will likely get a tip. Some employers falsely believe that because the chauffeurs are “tipped” that this compensates them for the time spent not driving a client. I suppose that technically you could say that if you paid $8 an hour and the chauffeur did a 4-hour job that had a “built-in,” or as I like to say, a forced tip of $43 that you could take the entire amount of $75 (wages + tip) and divide it by the six hours the employee actually worked and call it $12.50 an hour and be in compliance with minimum wage. 
Except for the fact that the employee’s paycheck is probably going to say that he worked 4 hours and had a $43 gratuity when he really worked 6 hours. According to the law, you technically shorted him two hours of pay.
The bottom line is if an employee drives your vehicle, the time you tell him to get to work and the time he gets to go home is all payable for every single minute on the clock. So the best method for playing the legal game right is to have a time clock. When employees arrive, they punch in. When they go home, they punch out. This concept has worked for almost every industry in America and there is no reason why we should think we are any different.

— Jim Luff, LCT Contributing Editor

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Jim Luff Contributing Editor
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