The United States District Court District of New Jersey preliminarily approved a settlement to pay for alleged violations of the Fair Labor Standards Act (the “FLSA”), the New Jersey Wage and Hour Law, and the New Jersey Wage Payment Law.

TRENTON, NJ: The settlement resolves a lawsuit that was filed back in 2013 over whether the employer had a policy or practice of failing to pay trainees wages equal to at least the federal minimum wage as established by the FLSA, whether the employer failed to pay overtime and minimum wages under New Jersey law, and whether the employer improperly deducted pay from the wages of trainees. The truck drivers are being represented by Swartz Swidler, LLC, an employment law firm based in Cherry Hill, NJ which is litigating nearly a dozen wage and hour matters against trucking companies nationwide.

The Plaintiffs contended that the employer violated the New Jersey wage and hour law and the Fair Labor Standards Act (FLSA) by failing to pay newly hired drivers for time worked during the mandatory training and orientation periods and for requiring newly hired individuals to pay an application fee to be considered for employment.

The Plaintiffs alleged that they were designated “Students” by the company and were required to complete initial hire classroom orientation and drug testing.  Plaintiffs further contended that they were required to pay a nonrefundable training fee for that purpose. After successful completion of orientation, the Students were then required to engage in over-the-road training with an instructor. Plaintiffs contended that the employer provided Students with a travel expense reimbursement per day (“per diem”) during the required completion of the training period.  The employer contended that the per diem reimbursement should qualify as a wage, and further argued that Student Drivers were not employed during their training.

The truck drivers alleged that they were denied overtime and minimum wages because the employer failed to pay for all compensable work time, including “on duty” time and compensable rest periods.

Plaintiffs alleged that the training constituted employment because during the training, they were required to perform actual work for the employer.  Additionally, they alleged that the nonrefundable training fee was unlawful pursuant to the Fair Labor Standards Act (FLSA) and the New Jersey Wage Payment Law (NJWPL). Per the FLSA, an employee must be provided wages equal to at least the minimum wage and must be provided same “free and clear”. Wages are not provided “free and clear” where the “the employee ‘kicks-back’ directly or indirectly to the employer. . . the whole or part of the wage delivered to the employee.” Additionally “if an employer requires a prospective employee to purchase [an item] before starting work, the employer must reimburse the employee no later than the next regular payday to the extent that the [item] costs cut into statutory minimum wage or overtime premium pay.” Likewise, the New Jersey Wage Payment Law (NJWPL) explicitly prohibits employers from deducting from wages any amounts paid to the employer for training and further compel reimbursement for any costs associated with any medical examination (the non-refundable fee was in part to pay for a drug test). Plaintiffs therefore contended that the non-refundable fee was unlawful under the FLSA and the NJWPL.

The employees further alleged that “per diem” travel reimbursements did not constitute wages and did not offset the amount of minimum wages and overtime due.

Additionally, According to the FLSA and the NJWPL, reimbursements for travel expenses are not part of an employee’s “regular rate”. The Department of Labor further explains that reimbursements for meal and incidental costs incurred when an employee is traveling over the road on an employer’s business is excluded from the regular rate and does not constitute compensation, meaning that per diem should not be included to calculate the employee’s regular rate of pay.  Accordingly, the Plaintiffs contended that the per diem payments were not creditable towards the wages due to them.

Consequently, the Plaintiffs asserted that the employer  did not pay them for all hours worked, including approximately 50 hours that every Student worked per week while in over-the-road training as “on duty” time as defined by the Department of Transportation (DOT), and including time logged in a truck’s sleeper berth beyond 8 hours per day during their training and other compensable rest periods.

The Court will hold a Final Fairness Hearing in June.  The Magistrate Judge will decide whether the Settlement is sufficiently fair and reasonable to warrant final court approval.