The Dangers of Paying Drivers by Mileage Vs. Hourly

Only a couple of months ago, a California federal jury handed out a $55 million verdict against Walmart (NYSE: WMT). Failing to pay 850 of its truck drivers compensation they were entitled to. The jury found that Walmart owed the drivers back pay for performing pre-trip and post-trip inspections, mandatory rest breaks and layovers between trips. However, the truck drivers were not compensated for other activities such as fueling and washing the trucks.

Walmart’s past and present truck drivers in California sued the company in 2008, claiming the pay plan that compensated drivers by mileage and activity rather than, total hours worked violated a federal California state law. Later, in 2015, Walmart dropped this plan.

It was previously ruled in San Francisco by U.S. District Judge Susan Illston that Walmart was in violation for not paying its truck drivers minimum wage for all tasks performed. Walmart also left the jury to determine the damages for the trial. As a result, Illston can double the damages owed if she determines if Walmart willingly acted with ill intent.

Randy Hargrove, a spokesperson for Walmart, announced that the company disagrees with the verdict and that the truck drivers are paid in compliance with the state law and often in excess of what the law requires. Hargrove added that Walmart will be filing post-trial motions and will likely appeal the verdict.

A way to better prevent employee underpayments is through GPS tracking systems. Being aware of employee whereabouts can help fleet managers better equip their fleet. FieldLogix, our award-winning fleet management software, helps managers track, plan, and achieve their fleet goals.

 

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