Can your transportation management system help you with wage and hour compliance? What happens in California will happen elsewhere. A U.S. District Court judge in California issued a Temporary Restraining Order enjoining a group of logistics and warehouse operators from continuing to issue deficient wage statements and requiring that the hours worked by employees paid on a piece-rate basis (i.e., miles, stops, or other activity-based pay system) be recorded.
The decision highlights the importance of ensuring all wage statements issued to California employees disclose all required information.
The information that must appear on all wage statements under California law includes:
- gross wages earned
- total hours worked by the employee
- the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis
- all deductions, provided, that all deductions made on written orders of the employee may be aggregated and shown as one item
- net wages earned
- the inclusive dates of the period for which the employee is paid
- the name of the employee and the last four digits of his or her Social Security number or their employee identification number
- the name and address of the legal entity that is the employer
- all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.
These requirements are equally applicable to out of state motor carriers with California operations. Along with verifying that your wage statements are compliant with California law, motor carriers, logistics providers, and other transportation companies should also ensure that the hours worked by those employees are being recorded. Regardless of whether employees – including drivers – are paid on a piece-rate, hourly or some other basis, their hours must be tracked and included on wage statements each pay period.
We learned at the NSRMCA National Conference back in August that the US Department of Labor has hired 300 new auditors, and that number does not include state hires. What’s mandatory in California is recommended in any state – make sure your work plan is clear, and that your workers’ activities are clearly documented.
You can set up LoadTrek to document your Fair Labor Standards Act compliance. Document any and all required activities when you set up the route, load or job. Make sure all required pre-trip and post-trip required activities are documented. Set up standard times for these activities based on normal circumstances. Set up as a route “stop” any authorized break periods, with stop comments regarding the nature and duration of that stop. Create clear comments for each planned stop on the route; whether loading, unloading, or performing service work.
Make certain your entire company understands that the scheduled times are there for a reason – and that under normal circumstances they are achievable.
An interview with Gene Corcoran
By Joel Beal
Gene Corcoran is my client with the longest tenure. Gene started using fleet technology within his private fleet in 1986. He is the most competent person I know at driving fleet efficiency, and a leading expert in tank truck operations. We sat down for an interview in January 2012.
JB: Gene, we first met at your Irving, TX terminal in 1994 – and by that time you already had 8 years’ experience using fleet technology. Tell us about it.
GC: I started my trucking career in 1978. In 1986 we tested the first real, working onboard computer technology – and we rolled out the US fleet in 1987 and 1988. I met my wife during this time; she was the corporate onboard computer project manager, and I was the garage supervisor in Brooklyn, NY.
I’ve been working with trucking technology most of my professional life. We have a long history using fleet technology, and we use fleet technology very differently than our competitors.
JB: We seem to be in a “smart phone” society, people load up on technology they don’t fully utilize. Every month I read stories in magazines about fleets trying to make their technology work – there seems to be a lack of focus. Many fleets don’t seem to have clear goals. When using fleet technology, how do you avoid making a mistake? Why do many struggle, yet you make it look very easy?
GC: Most fleets do the exact same thing. Yet, they all measure efficiency differently. What are you measuring? Why are you using these measurements? You have problems – what are they? Answer these questions, then build your technology plan. When you write it down, it becomes clearer.
JB: What do you measure? I imagine it’s a long list of key performance indicators.
GC: No it’s not – we measure time. That’s it. Time is the one thing that all fleets have in common.
JB: Do you measure fuel economy, driving habits, CSA scores, anything else?
GC: Yes, we monitor those indicators, but we focus on time to measure our fleet’s efficiency. When we master that element, everything else falls into place. Our three-step process is very simple:
1. Set up our trip schedules based on what we think is reasonable. Trip schedules include loading, unloading, deadhead, and stem time. You can’t charge for stem time, but you’re paying for it.
2. Measure actual performance against this trip schedules. Look at each trip, and each trip segment – where can we drive out time?
3. Using actual, recorded information, we periodically move and tighten our trip schedules. Labor groups and drivers agree that these tightened trip schedules are reasonable – they are the ones who created these tighter schedules by their past performance.
JB: What have you seen for financial benefits?
GC: When we save 15 minutes per driver per shift, we save big bucks. We know exactly what this number is, and we know that we’ll give up those savings when we stop monitoring. Data is useless unless you monitor and measure.
JB: How has this changed your company?
GC: When you focus on time, you drive all departments to work together. Sales/marketing, dispatch, maintenance, and drivers must all constantly communicate and cooperate with each other. If your department does anything to delay a driver – you must explain the situation.
When you measure the entire company on route time, maintenance will do those things that keep the trucks rolling. It’s how we justify auto tire inflation systems, automated transmissions, anything to keep the equipment rolling, out of the shop, and off the side of the road.
When you measure time, dispatch must do those things to facilitate the driver getting on and off the yard. Cooperating with the drivers makes them more satisfied. Trucks and trailers are ready when the driver arrives for work, and dispatch has loads and shifts planned.
Dispatch plans routes and trips to minimize exposure to traffic delays. This in turn creates less hazardous routes, easing stress on the drivers and reducing exposure to accidents. Sometimes the routes may be longer – that’s OK if trip times more efficient and the route is less hazardous.
We spec and maintain trucks so that they don’t break down as frequently, and we have a safer and more reliable fleet. Drivers are happier. Fewer safety defects improved our CSA scores. Improved CSA scores means we experience fewer Level 3 inspections, which further decreases our delays.
You create this cycle where time management drives improvements in all aspects of our fleet – financial performance, safety, compliance, on-time performance, maintenance costs, and driver satisfaction.
JB: What about safety? Don’t you see more work-related injuries and traffic violations, and decreased fuel efficiency as a result of speed?
GC: We will do nothing that jeopardizes safety. Safety is of paramount importance. We strictly monitor speed and hard braking occurrences – the two leading indicators for aggressive and reckless driving. We tolerate no speeding and only 1 hard brake occurrence every 200 miles. As for non-driving activities – we allow drivers to move at a normal pace. We will never tighten non-driving standards to the point that a driver is forced to move faster than normal. Drivers learn to drive our trucks our way.
JB: Gene, thanks for your time and your valuable advice.
HOUSTON – If motorcoach operators haven’t found a good enough reason to make sure their drivers aren’t using hand-held cell phones while behind the wheel, they should take a close look at a recent state court case here.
A 12-person jury awarded nearly $17.7 million to two women who were injured when the Greyhound they were riding in ran off the road and flipped over while the driver apparently was using his cell phone.
The award, which was more than triple what the victims sought, included $5.97 million in compensatory damages to Janie Reeves and $2.12 million to Ashley Reedy, plus an additional $4.8 million to each of them in punitive damages.
The bottom-line message: Juries have zero tolerance for motorcoach drivers talking on a hand-held cell phone while behind the wheel.
While the total amount of the award was staggering, the jury tried – and came within a single vote of succeeding – to push the total punitive damages to a whopping $500 million. The only thing that prevented the huge award was one juror who refused to go along with the other 11 panel members.
“It’s just the latest indication of how juries react to drivers and the use of cell phones,” suggested Randy O’Neill, vice president of Lancer Insurance Co., a leading provider of insurance to the motorcoach industry. “It’s a problem and it’s getting worse as the proliferation of cell phones continues.”
He said it is becoming extremely important that drivers strictly avoid anything — eating, drinking, talking on a cell phone or using any type of electronic device — that might distract them from driving.
“If a driver must use the phone, it certainly must be hands-free and it must be used only in an emergency,” he said, adding that for any other use the driver should first pull off the road and park in a safe location.
Additionally, he said it also is important for operators to include in their company policies a strict ban on employees using hand-held cell phones while driving, and to make certain everyone in the company not only understands it but follows the rule as well.
The Federal Motor Carrier Safety Administration made driver distraction a target of its safety programs last year and early this year banned drivers from using hand-held telephones while driving.
Drivers violating the rule can be fined $2,750 and operators who allow their drivers to use a hand-held cell phone while driving can be penalized as much as $11,000.
Lancer also has been warning the motorcoach industry that the rise in juror anger over drivers using cell phones while at the wheel can have financially devastating consequences and operators need to heed the message.
“We’ve frequently described how cell phone usage generates anger that will drive up verdicts, perhaps substantially,” said Paul Berne, Lancer senior vice president for claims. “With 11 of the 12 jurors on this case prepared to award $500 million in punitive damages, we can now frame just how much anger can be generated.”
He said the message will be emphasized in an advisory that will be sent to all of the company’s policyholders.
The accident that triggered the threat of the $500 million award occurred on a wintry night in 2007, on Interstate 40, a short distance inside the Texas border with Oklahoma. While the highway in Oklahoma was concrete and retained some heat that prevented it from freezing over, the pavement in Texas was asphalt and was covered with about a three-inch sheet of ice.
Greyhound maintained during the three-week trial that the accident was unavoidable because of the poor weather conditions and the condition of the road, pointing out that within a four-mile radius of the accident there were 186 vehicle crashes in Texas and just four in Oklahoma.
Attorneys for the two accident victims, however, hammered away at the driver’s use of the cell phone, revealing that a check of his cell phone records showed he made or received 17 calls during the three hours leading up to the accident, including one just before or during the crash.
They initially were tipped off about the driver being on his cell phone by a passenger who was seated at the front of the bus. At least one other witness also reported seeing the driver talking on the phone.
The attorneys also faulted the driver for not following a company policy that required him to put chains on the tires of the bus after being warned by other bus drivers that the roads in Texas were ice covered.
In addition they contended that Greyhound was negligent in hiring the driver, Rashad Nichols, because it violated a company rule that does not allow the hiring of a driver who has had more than two serious moving violations within a three-year period. Nichols reportedly had three speeding tickets eight months before the accident.
The jury, which reached the $17.7 million verdict after deliberating a full day on the compensatory damages and another day on the punitive damages, found Greyhound 80 percent responsible for the accident and the driver 20 percent at fault.
The total damages awarded by the jury were well above the $3 million requested by Reeves, who suffered a fractured pelvis, ruptured spleen, several broken ribs and a collapsed lung, and the $2.35 million sought by Reedy, who incurred a herniated disc.
