Beware breaking wage-and-hour laws if you employ drivers who cover expenses for the vehicles they use to make deliveries. If your hourly rate minus those expenses yields a figure lower than the minimum wage, you may be violating the Fair Labor Standards Act.
Recent case: Corey Bailey and other delivery drivers for Pizza Hut were paid an hourly wage for delivering orders to customers. They sued, claiming they were not paid enough to hit minimum wage after deducting their unreimbursed vehicle expenses.
Fortunately for the Pizza Hut franchisee, their case was dismissed on a technicality: The drivers hadn’t been able to provide any specific examples of falling below the minimum wage. (Bailey v. Border Foods, No. 09-1230, DC MN, 2009)
Final note:litigation is on the rise. Make sure your pay policies comply with the law.
- Weed out costly workers' comp classification errors
- Given California's strict break rules, can employees work through lunch?
- Use tip credit for some pay? Beware requiring 'substantial' work that doesn't generate tips
- Unpaid interns teach some employers a costly lesson
- Minnesota Workers' Compensation Law