Wage, Tip and Overtime Laws for Food Delivery Drivers

Wage-&-Overtime-Laws-for-Food-Delivery-Drivers

What are the laws for minimum wages, tips, and overtime for restaurant delivery drivers?  Read this article to find out if you are being paid correctly. This is applicable to all food delivery drivers (and bikers), including pizza delivery drivers, DoorDash, UberEats, PostMates, GrubHub, to name a few.

This article covers 4 main violations:

  1. Improper payment of tipped employees;
  2. Using your own car or vehicle to make deliveries;
  3. Misclassifying as an independent contractor; and
  4. Paying a “Day Rate” for Delivery Drivers

In the midst of a global pandemic, food and pizza delivery drivers (and bikers) have unquestionably emerged as essential workers, especially for those who are unable to leave their homes. There is also no doubt that food delivery drivers and workers work hard to earn their money.  However, delivery drivers are often vulnerable to minimum wage, tip and overtime violations. You work hard and even risk your health and safety to perform your job each day, and the Ohio Wage and Hour Attorneys at Mansell Law will fight for you to receive the hard earned wages to which you are entitled.

The Fair Labor Standards Act (“FLSA”), the federal wage law that applies in all states, requires employees to be paid at least minimum wage for all hours worked. The FLSA also requires that you be paid overtime, at a rate of one-and-one-half times your base hourly rate, for all hours worked over 40 per workweek. In this article, your Ohio Minimum Wage and Overtime Lawyer explains the four most common wage violations among delivery drivers.

Payment of Minimum Wage for Tipped Employees

The FLSA allows the hourly wage for tipped employees (those who customarily receive more than $30.00 per month in tips) to be substantially lower than the federal minimum wage. Tipped employees’ hourly wage can be as low as $2.13 per hour ($4.35 per hour in Ohio and varies in other states). Delivery drivers, especially those who deliver food and pizza, are considered tipped employees because they frequently receive tips from customers.

However, if you are employed as a delivery driver but you also perform other job duties that are NOT tipped, then you must be paid at least the federal minimum wage of $7.25 per hour ($8.70 in Ohio; Click here to see Minimum Wage by State for 2020) when you are performing non-tipped work. For example, if you deliver pizzas but also help in the kitchen to make the pizzas, you must be paid the full minimum wage for the time you spend making pizzas since this is not a position where you would receive tips.

Using Your Own Car to Make Deliveries

Are you required to use your own vehicle to make deliveries? Does your employer pay you at or near minimum wage? If you are not reimbursed for your vehicle expenses, such as gas and other vehicle maintenance, your employer may be violating minimum wage laws under the anti-kickback regulation of the FLSA.

The FLSA’s anti-kickback regulation prohibits an employer from shifting part of their business expenses to its employees if this cuts into employees’ wages and reduces them below minimum wage. For example, if you use your own vehicle to make pizza deliveries and need to use some of the wages you’ve earned to buy gas to make more deliveries, the cost associated with getting gas is a “kickback” to your employer. Instead of using these funds for your own benefit, you are funding one of your employer’s business expenses by purchasing the gas needed to make pizza deliveries.

If you use your own vehicle to make deliveries and you make at or near minimum wage, then expenses such as gas and vehicle maintenance must be reimbursed by your employer to ensure your total wages received do not fall below minimum wage. Your employer may reimburse you for these expenses in one of two ways. First, your employer can require you to keep track of how much you actually spend on vehicle maintenance and reimburse you for the total amount. Second, your employer can reimburse you according to the IRS’s standard business mileage rate (currently 57.5 cents per mile). If you employer fails to keep track of the expenses you incur in making deliveries, and your total wages earned fall below minimum wage, then it must reimburse you at the IRS’s standard business mileage rate.

Misclassification as Independent Contractor

Workers who are classified as independent contractors are exempt from the minimum wage and overtime requirements of the FLSA, meaning they need not be paid minimum wage for all hours worked or receive overtime for hours worked over 40 in a workweek. However, food delivery drivers are frequently misclassified as independent contractors when they are actually employees under the law. Employers misclassify employees primarily to save money and avoid the wage and hour mandates of the FLSA, as well as to avoid offering other employee benefits.

Food delivery drivers, especially those who travel to multiple restaurants to deliver food, are often classified as independent contractors. The employer’s argument in these situations is that workers can make their own hours and earn as much or as little money as they wish depending on how frequently they choose to make deliveries. However, whether a worker has been misclassified as an independent contractor is a question that examines numerous factors and is highly dependent on the specific facts and circumstances of your situation. (See Factors to Determine if You Are an Employee or Independent Contractor) You should reach out to us if you believe you’ve been misclassified as an independent contractor, as an in-depth analysis of your situation will be necessary.

Paid a “Day-Rate” for Delivery Jobs

Some delivery drivers are paid a daily rate to perform deliveries. While this pay structure is permissible, the total wages you receive for the day divided by your hours worked must not fall below minimum wage. For example, if you are paid a flat rate of $70.00 per day to make deliveries, and you work 8 hours that day, your average hourly rate is $8.75 per hour. But if, for example, you have to work two extra hours due to traffic delays or inclement weather, your average hourly rate falls to $7.00 per hour, in violation of the FLSA’s minimum wage provisions.

If you believe you have been underpaid for your services, or if you have other questions about your wages or employment, contact the unpaid wage and overtime lawyers at Mansell Law for a FREE consultation.

Mansell Law

Overtime and Minimum Wage Attorneys

Related Articles:

Ohio Break Laws

When does time clock “rounding” violate the law?

Ohio Overtime Laws 2020