KANSAS CITY, Kan. Two drivers for Renzenberger Inc., the large provider of employee transportation for the railroad industry, have filed suit against the company claiming they were misclassified under the motor carrier exemption to the federal Fair Labor Standards Act.

Because they contend they were not exempt employees, the drivers say they are entitled to overtime pay under federal labor law. They are seeking the overtime pay on behalf of themselves and other Renzenberger road drivers.

The suit was filed last month in the United States District Court here just two days before it was announced that Coach America had signed a letter of intent to acquire 100 percent of the capital stock of Renzenberger. (See March 1 issue of Bus & Motorcoach News.)

An attorney for the drivers, Charles Frohman, said Renzenberger, which operates more than 1,500 vans in 23 states, "uniformly classified its road drivers as exempt from the (Fair Labor Standards Act) overtime requirements, even though it appears that many of its drivers should have been paid for their overtime hours worked."

In a phone conversation, Frohman declined to specify in what way the employees were misclassified.

Frohman is with a Minneapolis-based employment law firm, Nichols Kaster & Anderson PLLP, that is pursuing the case on a contingency basis. Two other Nichols Kaster attorneys, Paul Lukas, and Donald Nichols, are working with Frohman.

The motorcoach, school bus and trucking industries' exemption from federal overtime pay requirements pops up periodically as an item of interest. Legal challenges to the exemption have been filed from time to time over the years.

Despite the challenges, the exemption generally prevails throughout the U.S. There are states, however, where operators pay drivers overtime because of state rules.

Under Section 13(b)(1) of the Fair Labor Standards Act, federal overtime pay requirements are not supposed to apply to employees whose qualifications and hours of service are regulated by the U.S. Secretary of Transportation.

The secretary of transportation, through the Federal Motor Carrier Safety Administration, has the power to regulate employees of motor carriers whose duties affect safety on the highways when either interstate passenger travel or interstate shipment of property is involved.

To establish that an employee is covered by the motor carrier exemption, the employer must show that (1) the employer is a motor carrier, and (2) that the activities of the employee affect highway safety, and (3) that the employee's activities involve the interstate transportation of people or goods for compensation.

Here are three key factors used in determining if an operator is an exempt motor carrier:

1. An employer is a motor carrier if it operates commercial motor vehicles and is paid for it. Commercial motor vehicles are those that have a GVWR of at least 10,001 pounds or that transport more than 8 passengers, and are used in a "for-hire" business.

2. Drivers are employees whose activities affect highway safety. Mechanics who are responsible for maintaining buses in safe operating condition also affect highway safety, but courts have determined that other employees, such as dispatchers, are not covered under the exemption.

3. The exemption applies only if the motor carrier engages in interstate transportation. If your company does not provide interstate activity or charter trips, the exemption cannot be used.

What is somewhat less obvious is which drivers may be exempt and for what periods. The most conservative determination is that any driver who takes an interstate trip is exempt for the week in which the trip occurred. And the mechanic who worked on the bus that went out of state is exempt for that week as well.

But the U.S. Supreme Court has upheld a more liberal interpretation that says when interstate travel is an integral part of the employer's service, even though it may be a very small portion of the business, and when any driver can be assigned to an interstate trip, then all drivers are exempt from overtime as a class. However, another court decision determined that drivers who never engage in exempt activities cannot be considered part of the class.

In determining whether to pay overtime to drivers and mechanics, the main question that an operator should ask is: "Is this driver eligible for out-of-state trips?" If the answer is "no" -- that he or she is under 21, for example, or has opted out of such trips -- then he or she is not exempt and the operator must pay overtime for any hours over 40 in a week.

If the answer is "yes," then those drivers -- regardless of how often they actually go out of state -- are exempt from overtime pay.

For more information about the exemption, go to www.wagehour.dol.gov and scroll down to the Quick Finder heading about midway down the page. Go to Fact Sheets and click on the down arrow next to the word Choose. Then click on Numeric Index. Scroll down to Fact Sheet No. 19.

Information also is available by calling the Department of Labor toll-free wage-hour helpline, (866) 487-9243.