There is a current lawsuit involving Knight Transportation. This company, based out of Texas, has a very well-known piece-rate insurance policy that it offers to their drivers. This policy pays an insured driver an hourly rate that is set by the company for each insured vehicle. The problem is that there was a clause in the contract that specified that this rate could not be raised above a set level. When this was discovered by the Texas Department of Insurance, they sought to enforce this clause.
The Texas Department of Insurance tried to enforce the clause by warning Knight Transportation that if they did not increase the minimum wage to the nonagricultural employees that they were required to pay the same rate that the piece-rate employees were paid.
The legal team of this company then sent a letter to the Texas Department of Insurance stating that they would file a complaint against the state code in order to have the clause struck from the contract. In this letter, they explained that the clause in question was in violation of the Americans with Disabilities Act and the Fair Credit Reporting Act. The legal team also explained that the clause was intended as a guideline and not a requirement. The two sides met with an attorney from the Texas Department of Insurance in order to finalize the case.
Once all parties are satisfied with the way the situation is going to play out, there will be an opportunity for a final vote on the matter.
If the clause is not removed from the contract then the original clause will be allowed to remain in place. However, should the original clause be removed and a new one is inserted into the contract then the new clause will need to meet all of the above minimum wage requirements. It will be important to note that the state code amendment will likely be passed by a wide margin, meaning that any changes to the piecework basis will need to be approved by a large majority.
The amended contract now states that any overtime pay that was previously provided will continue to be paid.
This means that even if the original agreement stated that no overtime pay would be given when working over a set number of hours, the Knight Transportation Lawsuit plaintiff’s attorney can show that the employer violated this rule. In addition to overtime pay, Knights have been known to pay their non-driving employees for their time spent in transit. They have also been known to pay for lunch breaks. These are all Overtime pay provisions that will need to be addressed during the mandatory mediation.
An interesting part of the minimum wage laws is that they state that a non-driving employee is also entitled to be paid for any actual time worked.
However, there must be a strict minimum amount of time that is worked in order to meet this requirement. If the employee is able to prove that he or she was actually working during the time that was stated in the complaint then the employer will have to pay the plaintiff above the state minimum wage. The court may issue an award higher than the state minimum wage, if it is found that the plaintiff was actually being paid for hours worked. This is referred to as “piecework” in the legal world.
Although many lawyers believe that piecework basis for overtime payments and other nonagricultural work is not considered as bad as it used to be, others disagree.
According to them, the original piece rate system was designed to keep employers from taking advantage of persons who were trying to make an extra buck. The original piece-rate system took into consideration only hours worked; it did not take into consideration the actual time spent driving. As a result, there have been numerous lawsuits filed on behalf of employees who feel as though they have been paid for working hours that they did not actually work. An argument that is commonly made against the piecework basis is that the employees are being punished for being unable to get along with their supervisors.
