Federal Court Rules Limos are "Taxicabs" for Purposes of Federal Overtime Exemption

As a general rule, employees who work more than 40 hours during a given workweek are entitled to 150% of their regular pay–i.e., overtime–for any hours worked in excess of 40. As you might know, there are several groups of employees “exempt” from overtime pay requirements. For example, under the Fair Labor Standards Act (FLSA), the federal law governing overtime, “any driver employed by an employer engaged in the business of operating taxicabs” is not entitled to overtime.

Judges Look to 1930s Dictionaries to Interpret Law

On September 19, 2018, the U.S. Second Circuit Court of Appeals here in New York addressed an interesting question arising from this exemption: Does a limousine qualify as a taxicab? The defendant in this case operates a “chauffeured car service” based in Westchester. The company does not operate any traditional metered taxicabs, but rather maintains a fleet of five-person cars, SUVs, luxury vans, and similar vehicles. Individual drivers are required to wear a suit and tie, and they do not “choose their own jobs or pick up passengers,” according to court records, but rather receive assignments from a central dispatch office. The defendant also operates a “taxi stand” under a contract with the Westchester County Airport.

In 2015, a group of approximately two dozen drivers sued the defendant, alleging they were illegally deprived of overtime pay under the FLSA. A district court judge granted summary judgment to the defendant. The Second Circuit affirmed the lower court's ruling.

The appeals court noted it had not previously “interpreted the taxicab exemption” under the FLSA. The law itself does not define “taxicab.” At the time Congress adopted the FLSA, which was in 1938, there were several commonly used sources that contained a definition. For example, the Second Circuit pointed to the 1934 edition of Webster's New International Dictionary, which said a taxicab was a “passenger-carrying vehicle, usually a motor vehicle designed to seat five or seven persons, with or without a taximeter, maintained for hire on public thoroughfares or at public stations or stands, but not operated on a schedule.” Similarly, the Motor Carrier Act, which Congress passed in 1935, defined taxicabs as a vehicle that was “not operated on a regular route or between fixed termini.”

Based on this and related sources, the Second Circuit held that a taxicab had to meet three requirements:

  • It is a “chauffeured passenger vehicle”;
  • It is “available for hire by individual members of the general public”; and
  • It has “no fixed schedule, fixed route, or fixed termini.”

By this definition, the court concluded “there is no genuine dispute that [the defendant's] drivers qualify for the taxicab exemption.” The fact that the defendant did not explicitly market itself as a taxi company–e.g., its cars were not yellow, drivers cannot pick up fares on the street, et cetera–does not affect what the actual service is “for purposes of the FLSA.”

Speak with a New York Wage and Hour Lawyer Today

The Second Circuit's ruling is an unfortunate setback for chauffeured car drivers who are compelled to work long hours without the protections of overtime pay. Cases like this illustrate the complexity of wage and hour laws. If you have reason to believe your employer is not paying you what the law requires, you need to speak with a qualified [New York employment law attorney] as soon as possible. Contact the Law Offices of White, Nisar & Hilferty, LLP, to schedule a consultation with a member of our team today.