As you know, chauffeur drivers work long and hard hours behind the wheel. At the end of the day, chauffeurs deserve a fair day’s pay for an honest day’s work – but in the chauffeur industry, it’s not always clear what a fair day’s pay actually entails. This is why it's critical for chauffeurs to be familiar with the law so that they can collect what's rightfully theirs.Take this scenario as an example:

A business charters a bus and pays the rental company a gratuity up front, but does that tip belong to the company or to the bus driver? And what about overtime? Is the driver entitled to receive overtime wages, or can the company pay a flat rate per trip regardless of how many hours are spent behind the wheel? Can the driver pocket all of the tips that they receive at the end of a trip?

All of these questions and more can be answered once you understand the wage laws for chauffeurs.

Do chauffeurs get paid overtime?

The answer to this one is somewhat complicated, but the initial answer is: Yes, in general, chauffeurs are entitled to overtime pay. If you're a chauffeur, you're not exempt from overtime simply because your employer pays you a flat rate, salary, per-day/trip rate, etc.

The only way for an employer to exempt a chauffeur from overtime is if they fit into two very specific categories: the 1) Motor-Carrier Act Exemption and 2) Taxicab Exemption. Employers often try to wedge their employees into one of these exemptions in order to avoid paying overtime, but these exemptions are very specific, so you should consult an employment lawyer to find out if you are exempt or if you are entitled to overtime.

Please note that your entitlement to overtime pay has nothing to do with whether you receive salary vs. hourly pay. Even if you are salaried or paid per trip/day, you may still be entitled to overtime!

What about a fixed rate of pay?

Limo companies are particularly notorious for only paying their drivers on a per-trip or daily-rate basis. However, you still may qualify for overtime pay unless you fit into one of the specific exemptions listed above. This is the case even if your employer did not track how many specific hours you worked.

Chauffeurs are also entitled to receive a minimum wage of at least $7.25 per hour worked during a seven-day period. And this doesn’t just mean the hours spent behind the wheel, but also the time spent waiting to pick up a customer.

What’s the difference between service charges and chauffeur tips?

It’s important for chauffeurs to realize that their tips and the service charge to the customer are not the same thing. Chauffeur companies often charge an upfront "service charge" to the customer that is non-negotiable and that is part of the original contract. This is completely different from a tip that the customer gives to the chauffeur, which is not contractually obligated and is left entirely up to the discretion of the customer.

Tips

The bottom line is that, legally, a tip belongs exclusively to the employee who received it – i.e., you. Your employer must distribute 100% of the tips to the employee. A service charge, on the other hand, legally belongs to the employer.

The Department of Labor (DOL) issued a letter to the National Limousine Association, in which they weighed in on this matter, and the DOL opined that a gratuity or tip belongs to the employee as long as the customer is aware that the gratuity is voluntary. According to the DOL, if there is language on a prepaid invoice that lists gratuity as “suggested,” then it is subject to negotiation and therefore belongs to the employee.

Service Charges

If the "suggested" language is not included on the invoice, then these amounts are non-negotiable and become service charges and not tips. This is when things can get a bit more complicated. For instance, if your employer voluntarily decides to give you the service charge (or any part of it) as part of your wages, then that service charge becomes part of your overtime rate. Here’s an example to clarify:

Suppose a chauffeur is paid $10 per hour, and the employer pays $50 in service charges over the course of the week. Let’s say that this employee worked 48 hours in a one-week pay period. Most employees would calculate their wage by taking 1.5 times their regular rate for their 8 hours of overtime, i.e., $15 per overtime hour instead of $10 per regular hour. But this isn’t the case! The real overtime rate would be calculated as follows:

Step 1: Regular pay = ($10.00 x 48 hours) + $50 = $530
The $50 service charge is included in the regular pay.

Step 2: Regular rate of pay = $530/48 hours = 11.04 per hour.
This is the regular rate of pay; the overtime rate is 1.5 times this rate.

Step 3: Overtime compensation = $11.04 x 0.5 x 8 hours = $44.16

Step 4: Total weekly compensation = $530 + $50 + $44.16 = $624.16

How do wage deductions work?

The bottom line is that if you are making less than $7.25 per hour in direct wages, then the chances are that your employer cannot legally deduct anything from your wages or tips other than taxes or credit card fees. This means that you cannot be charged for any items including uniforms, cell phones, computers, vehicle damages or anything else that is incidental to your employment.

Be aware that many employers will try to get an employee to sign an agreement authorizing these deductions, but that does not make it legal! Many employers attempt to circumvent these rules by calling it a "loan" or "advance" to the employee instead of a deduction, but this also doesn't make it legal. Anything that is the "cost of doing business" cannot be passed along to the employee. If there’s any doubt, the best way to sort this out is to consult an employment lawyer.

Lastly, any deduction that is not authorized by law (e.g., taxes or child support) or by the employee (in signed writing) is a violation of the Texas Payday Act. You should consult an attorney to determine whether you have a claim under this Act or under any other wage laws.

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If you have questions about your wages, overtime, tips or gratuities, service charges, or wage deductions, please call the wage and overtime attorneys at Herrmann Law, PLLC (817-479-9229); or submit your case online.

Original article posted on the Herrmann Law website at: paycheckcollector.com/chaueffeur-drivers-protect-wages.