Judge detours cabbies’ drive for minimum wage

By Liz Benston

Monday, July 6, 2009 | 2 a.m.

Nevada’s minimum wage increased this month, entitling workers to receive at least $5.85 per hour, or $7.55 for workers whose employers don’t offer health insurance plans that qualify under state law.

That is, unless you drive a limo or taxi.

A federal judge last month issued a ruling in a landmark class action lawsuit filed by drivers at Nevada’s largest limo company, Bell Trans, that sounds, to the thousands of people who work in Nevada’s tourism-based transportation industry, like a bad joke: Not only can drivers not sue for minimum wages under state law, but the constitutional amendment to raise the state’s minimum wage, approved by voters in 2006, wasn’t intended to remove preexisting minimum wage exemptions, built into state law, for drivers like them.

The order, signed by U.S. District Judge Robert C. Jones, states that voters likely didn’t intend to remove the exemption when they voted for the amendment, which aimed to increase the minimum wage rate and doesn’t mention exemptions or how to handle them.

When business was flush, drivers didn’t think about minimum wage laws. In the recession, with rides and tips harder to come by, limo and taxi drivers say they’ve fallen to the bottom of the labor pyramid — working overtime, in some cases, just to scrape together a couple of hundred bucks a week. Limo and cab companies, new to minimum wage complaints, have fought them.

The companies say state law acknowledges that drivers, like, say, independent sales reps, should be compensated based on productivity (drivers share the money they collect from passengers with their employers) rather than receiving a guaranteed hourly wage, like most workers. Drivers say they’re entitled to the same safety net most other workers have. Waiting in a cab line for a ride that may or may not materialize when business is slow is work nonetheless, just like sitting in an office, they say.

Although he told the limo drivers they don’t qualify under state minimum-wage laws, Judge Jones has allowed the Bell Trans drivers to pursue federal minimum wage and overtime claims.

Bell Trans, through the company’s Las Vegas attorney, Norman Kirshman, declined to comment.

The limo drivers are seeking approval from Judge Jones to appeal the order to the 9th Circuit Court of Appeals in San Francisco and, should that fail, a request that the Nevada Supreme Court decide the matter of whether the constitutional amendment removed the minimum wage exemption for drivers.

Federal minimum-wage law, unlike state law, allows employers to include tips in their calculation of minimum wages — a rule that will prevent many drivers from receiving minimum wage. Federal overtime law, which entitles workers to overtime for more than 40 hours worked in a week, is also less favorable for hospitality workers than Nevada’s overtime law, which requires employers to pay overtime for each hour over eight worked in a day, regardless of whether the weekly total worked adds up to 40 hours.

At first glance, the court order seems unfair to drivers, who have a valid argument, said Bryan Cohen, a labor attorney who wasn’t involved in the case. In fact, Cohen said, it’s a well-intentioned and unbiased, though perhaps unpopular, decision that attempts, for the first time, to clarify Nevada’s needlessly complicated minimum wage law.

“The amendment could have been written more clearly to say that the exemption for drivers is removed — or that it stays. But it didn’t,” said Cohen, a senior associate with Kamer Zucker Abbott. “Neither side stepped up, and they allowed a constitutional amendment to pass that was ambiguous and difficult to interpret.”