In last week’s blog, I described I case I had involving a night dispatcher who complained about minimum and overtime wage violations. In that situation, the tow company thought they didn’t have to pay either minimum or overtime wages because he paid the dispatcher a salary of $300.00. But just paying a salary, without more, does not make the employee exempt from minimum and overtimes wages.
My first wage and hour case in the tow industry didn’t even involve tow operators. It involved a disgruntled night dispatcher who was being paid $300.00 per week to answer the phones from 7:00 p.m. to 7:00 a.m., seven (7) days a week. She was permitted to take all of the calls on her cell phone, meaning for large portions of the night when the phone wasn’t ringing, she slept at home.
At the 2018 Florida Tow Show, Michael McGovern and I were pleased to present our seminar on human resources issues in the tow industry. Much of this seminar was spent discussing wage payment practices. In reflecting on the seminar, I was again reminded of the many unique features of the tow industry regarding the payment of wages to tow drivers. Many employees are paid on a commission. Most work is done “outside the office.” Many employees take trucks home at night and on the weekends. Add to this the fact that there are actual laws specific to the tow industry for the payment of overtime wages. All in all, human resources in the tow industry are complicated to say the least.
I have always been impressed by tow companies’ tolerance for financial risk. The expenses in the tow business are enormous and growing every day. At the end of the line, there is one company owner who has likely financially guaranteed all of these risks and the liability for the same. It is understandable that an owner might want to mitigate these risks in any way that they can.
When Michael McGovern and I started this website in 2016, we wanted to create a place where tow companies (as opposed to tow drivers) could safely and quickly obtain accurate legal information from attorney’s knowledgeable in the towing industry. In doing so, we recognize that, maybe more now than ever, there is a big difference between tow company owners and tow drivers as much of the risk tow companies now face comes from claims made by drivers against their employers. We are careful not to publicize this information in other publications for fear that it may be read by tow companies and drivers alike. However, we feel comfortable publishing it here because our subscribers are owners or high level employees.
When a tow company is being sued for minimum or overtime wage violations, one of the first issues both parties must confront is how many hours the tow driver actually worked. Because of the unusual nature of the tow business where drivers are on shift for long periods of time but not actually performing tows, it is not uncommon for the tow company to say “I have no idea how many hours claimant worked.”
For the few years, the lawyers at this website have been cautioning tow companies to make sure that their wage payment practices are in check because the consequences of failing to do so can be devastating. Lawyers that are looking to sue tow companies for these violations are also aware of this fact. Some lawyers that are particularly enthused about suing tow companies have actually been advertising looking for these types of cases. Don’t believe me?
Claims for unlawful employment practices are on the rise. As such, it is wise for tow companies to review the basic premises of unlawful employment claims.
In my neck of the woods, most tow companies pay their drivers by a commission. While the commission system may be the preferred choice for your company, a commission system, absent some other factors, is not an exception to the record keeping, minimum wage, and overtime requirements of the Fair Labor Standards Act (FLSA). This means that tow companies still need to maintain records of hours worked either through a time clock or set schedule. This also means that employees must be paid at least minimum wage if their commission divided by their hours worked doesn’t equal minimum wage. Finally, employees must also be paid overtime if they are not exempt.
Towing is a contentious industry. Often, the nature of the job places tow drivers in a precarious position with exposure to a wide variety of claims. To respond to these risks, some of my tow company clients have considered requiring drivers to wear body cameras. Body cameras, like anything, have their pro’s and con’s. Here are a few things that tow companies should consider when evaluating.