Labor & Employment Law Daily NY wage law requires employers to pay OT to transport workers exempt from FLSA under Motor Carrier Exemption
Tuesday, April 7, 2020

NY wage law requires employers to pay OT to transport workers exempt from FLSA under Motor Carrier Exemption

By Robert Margolis, J.D.

A plain reading of the statute requires payment of one and one-half times minimum wage for overtime work.

Though the New York Labor Law (NYLL) overtime wage provision adopts exemptions from the FLSA, including an exemption that excludes certain transportation workers from the FLSA’s protections, the NYLL still requires employers of exempted workers to pay them overtime at a rate of one and one-half times the minimum wage, the Second Circuit has held. The court reversed summary judgment for IBI Armored Services, Inc., in a suit brought by 28 of its current and former employees seeking, among other things, overtime wages, and remanded the case to the district court for further proceedings (Hayward v. IBI Armored Services, Inc., April 3, 2020, per curiam).

District court proceedings. The employees are current and former employees of a vehicle service that transports money to and from grocery stores and banks in New York City. The employer paid the named plaintiff $11 per hour in 2014 and $12 per hour in 2015. The employees alleged violations of both the FLSA and NYLL, contending that since 2014, they had not been paid minimum wage, overtime, or spread-of-hours compensation. They also alleged that the employer failed to provide proper wage statements.

The employer moved for summary judgment in the district court based on the FLSA’s Motor Carrier Exemption, which exempts from the FLSA’s overtime compensation requirement employees for whom the Secretary of Transportation can set “qualifications and maximum hours of service.” 29 U.S.C. § 213(b)(1). While the employees did not dispute that this exemption applies to the federal claims of 25 out of the 28, they contended that the NYLL still entitled them to overtime compensation at one and one-half times the minimum wage. The district court, however, dismissed both the federal and NYLL claims, reasoning that the NYLL had adopted the FLSA’s Motor Carrier Exemption in toto.

NYLL plain language. The NYLL provision that adopts the Motor Carrier Exemption also includes the following language: “an employer shall pay employees subject to the exemptions of section 13 of the Fair Labor Standards Act, as amended, except employees subject to section 18 13(a)(2) and (4) of such act, overtime at a wage rate of one and one half times the basic minimum hourly rate.” The Motor Carrier Exemption is found in section 13(b)(1) of the FLSA, not either of the two sections referenced in that sentence. Thus, the appellate court concluded that this “plain language” of the New York statute, because it expressly includes employees subject to the Motor Carrier Exemption, requires that those employees receive overtime compensation at a rate of one and one-half times the minimum wage. The court rejected the employer’s interpretation of that sentence, that the phrase “subject to the exemptions” was meant as a carve-out, rather than a “descriptor.” “[S]ubject to the exemptions” in that sentence comes immediately after “employees,” so the appellate court concluded that the phrase “modifies” employees.

In addition, an earlier sentence in that NYLL statute requires payment of overtime for employees “at a wage rate of one and one-half times the employee’s regular rate,” but excludes workers that fall within the Motor Carrier Exemption. The appellate court reasoned that if the language requiring payment to employees of “one and one-half times minimum wage” applied to the same population of employees as the sentence just quoted, that language would be wholly redundant and unnecessary. Thus, reading the statute in the manner that the employer urged would violate the principle of statutory construction to construe statutes so as to give effect to all provisions.

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