profitability), and bonuses designed to encourage employees to remain with the employer. Examples of “discretionary” bonuses include unannounced bonuses or spontaneous rewards for specific acts. In order to be counted toward the standard salary level, nondiscretionary bonuses must be paid at least quarterly. In some situations, the bonuses may be less than expected and an EAP’s weekly salary plus bonuses for the quarter will not equal or exceed one-quarter of the yearly salary level. In such a case, the DOL will permit employers to make a “catch-up” payment no later than the pay period after the end of the quarter to raise the employee’s salary to the standard salary level.
Motor Carrier Exemption Section 13(b)(1) of the Fair Labor
Standards Act, also known as the “motor carrier exemption,” continues to provide an overtime exemption for employees regulated by the Department of Transportation (DOT). Drivers who transport goods across state lines and certain other employees whose duties may affect the safety of motor vehicles in interstate commerce generally fall within DOT jurisdiction and are not entitled to overtime under FLSA, even if they also work on intrastate routes. The new regulations do not affect the motor carrier exemption. Under Maryland law, state overtime law does not apply to employees regulated by the Department of Transportation.
Options for Employers
Employers may increase the salary of newly overtime-eligible employees to keep the employee exempt from overtime. This may be a good option for employees who have salaries slightly under the new exempt salary level. Employers may also choose to keep salaried employees that will now be overtime-eligible at the same rate of pay and pay overtime as needed. There is no requirement that employers convert
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employees from salaried to hourly in order to pay overtime. Employers may instead calculate an employee’s rate of pay by dividing the total pay for the employee in any workweek by the total number of hours actually worked, and use that rate to pay the salaried employee overtime.
Preparing for the Change
In preparing for the change on December 1, 2016, employers should consider:
•
Identifying employees who are at or near the new standard salary level,
• Preparing early by having salaried employees who are newly “overtime-eligible” track their time in anticipation of the change,
•
Developing policies for tracking time for employees who work remotely and/or are issued a company computer or cell phone, and
•
Evaluating bonuses to determine whether they are “discretionary” or “nondiscretionary” and reviewing and adjusting their compensation schemes and policies accordingly.
Private employers may also refer to guidance issued by the DOL on the final overtime rule (available at https://
www.dol.gov/). Whether employees are “exempt,” “overtime ineligible,” or “not overtime-protected,” employers will have to pay much closer attention to employee compensation and overtime work as the regulations continue to update.
Both authors are with Franklin & Prokopik, P.C. Albert B. Randall, Jr. serves as general counsel to the Maryland Motor Truck Association, and may be reached at arandall@fandpnet. com. Matthew George Kuspa may be reached at
mkuspa@fandpnet.com.
Chairman’s Message Continued from page 5
While most businesses already offer some form of paid sick leave to their employees, legislation that was proposed in the past was virtually impossible to comply with, created many questions because of its lack of clarity, and had Draconian penalties even for businesses that were trying to comply. We also expect a vigorous debate on the issue of hydraulic fracking, which you can read more about in the contents of this magazine issue. We will be working hard to educate those representing us and explain how their vote or proposal impacts trucking/transportation.
A lot has been happening at MMTA in recent months. Most of you know that we relocated to Columbia in July after almost 60 years in Baltimore. That was not an easy decision, but it was time. I want to acknowledge my predecessor who oversaw this relocation, Dennis Morgan of Cowan Systems, whose term as MMTA chairman ended in September. Our new facility has opened up opportunities for expanded member training programs, council and chapter meetings, and much more.
The future is bright at MMTA. I welcome your thoughts, opinions, and suggestions as I enter into what is for me an exciting opportunity and year. I look forward to meeting and visiting with many of you as fellow MMTA members.
Jonathan Kuentz 2016-2017
MMTA Chairman of the Board BEHIND THE WHEEL — Q4 Winter 2016 7
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