Does Your Company Pay Its Dispatchers Overtime?

Probably not.  Most transportation companies consider their dispatchers salaried employees and not eligible for overtime.  But now may be a good time for these companies to review the reasons that they consider their dispatchers “salaried,” because some dispatchers may be entitled to overtime.

In the recent case of Iaria v. Metro Fuel Oil Corp., a New York federal court, deciding an overtime claim under both the federal Fair Labor Standards Act (“FLSA”) and New York state law, recently held that a group of dispatchers could proceed to trial on the issue of whether they are subject to the “administrative” exemption under the FLSA.  Although the court noted that dispatchers generally qualify under the exemption, it was not satisfied that the plaintiff-dispatchers’ actual duties made them subject to the exemption.

Employees employed in a “bona fide administrative capacity” are not subject to, and exempt from, the FLSA’s overtime provisions, provided that they are paid a salary of at least $455 per week and their primary duties are “the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers” and they “exercise . . . discretion and independent judgment with respect to matters of significance.”  While the parties conceded that the plaintiffs were paid a sufficient salary, they disputed whether the dispatchers’ duties involved the level of discretion and judgment required by the FLSA.

To support its position that the plaintiff-dispatchers were not entitled to a trial, the defendant-employer provided evidence that its dispatchers “ensured that the defendant’s product (fuel) was delivered timely and efficiently.”  The court found that that this general job description was not in line with the type of administrative functions contemplated by the FLSA, such as those performed by accountants, personnel officers, and computer programmers.  The court also questioned whether the dispatchers exercised discretion and independent judgment on “matters of significance,” and whether they were required to use judgment that was “more than the use of skill in applying well-established techniques, procedures, or specific standards described in manuals or other sources.”

The court acknowledged that the Wage and Hour Division’s Field Operations Handbook provides that the Division’s investigators should consider dispatchers as acting in a bona fide administrative capacity when they are required to handle emergency situations or make choices between using company trucks or those of a contract carrier.  However, the court found that the plaintiff-dispatchers provided evidence that they had to seek the approval of their supervisor before taking most actions, which negated the discretion required by the “administrative” exemption.  Accordingly, the court held that a trial was needed to determine whether the dispatchers were entitled to overtime.

Although transportation companies typically assume that their dispatchers should be salaried employees, they should not rely on assumptions or what other companies do.  The standards for an FLSA exemption need to be satisfied for each employee.  This means that companies should examine, or re-examine whether the actual job duties of their salaried dispatchers satisfy the “administrative” or some other FLSA exemption.  As the Iaria case demonstrates, unless dispatchers use independent judgment and exercise discretion on matters of significance, a court may find that they are entitled to overtime, or at least a trial.

Joseph N. Gross, Partner, an OSBA Certified Specialist in Labor and Employment Law, and Patrick O. Peters, Associate, are members of Benesch’s Labor and Employment Practice Group and practice in the area of labor and employment law, including wage and hour compliance.  For more information concerning compliance with any aspect of the FLSA, please contact Joe at 216.363.4163 or jgross@beneschlaw.com, or Pat at 216.363.4434 or ppeters@beneschlaw.com.

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2 thoughts on “Does Your Company Pay Its Dispatchers Overtime?

  1. I’m impressed, I must say. Really rarely do I encounter a blog that’s each educative and entertaining, and let me tell you, you could have hit the nail on the head. Your thought is outstanding; the issue is one thing that not enough people are talking intelligently about. I’m very glad that I stumbled across this in my seek for one thing relating to this.

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