Powers of Attorney: Friend or Foe?

A power of attorney is a legal document that gives a person the ability to manage financial affairs on behalf of another. In legalese terms, we often say that the “principal” gives a power of attorney to the “attorney-in-fact,” who can then add themselves as a signor on the principal’s bank accounts. Minnesota has a form power of attorney known as the Statutory Short Form Power of Attorney, which is great because it’s easy to use and most banks in the state recognize and honor it. But it’s not without some serious pitfalls.

The ease with which someone can print and sign a power of attorney and the incredible breadth of powers this document gives the attorney-in-fact has made it the number one tool for financial exploitation. Most financial exploitation of vulnerable adults is perpetrated by family members, and most of them are doing it using a validly-executed power of attorney. In some cases, powers of attorney are obtained by fraud or duress, such as by misleading someone about the nature of the document they are signing, or by forcing a vulnerable adult to sign under the threat that their caregiver will cease taking care of them. And in some cases, I believe that the power of attorney was given voluntarily, but at some point in time the caregiver or family member began misusing the document for their own personal gain out of a sense of entitlement or because provisions were never made to appropriately compensate the caregiver.

Despite these pitfalls, I still recommend to my clients that they have a power of attorney. Why? Because the alternative is worse yet. If something happens to you and you have not given a power of attorney to anyone, the only alternative is to go to court and ask a judge to appoint a conservator for you, which is an expensive, time-consuming, and expensive process for you and your loved ones.

That said, there are ways to protect yourself and your loved ones from financial exploitation using a power of attorney. First, hang onto your original power of attorney. You can give your attorney-in-fact a photocopy initially and inform that person where they can obtain the original if they need it. Without an original, the attorney-in-fact cannot actually use the power of attorney, so this adds an extra barrier to accessing your accounts and assets.

Second, choose your attorney-in-fact very carefully. This should be someone you trust implicitly. When in doubt, you can always nominate two people and make them act together, this way there is a system of checks and balances in place.

Third, if your attorney-in-fact will also be providing care to you, make sure there is a plan in place for appropriate compensation for that individual. Voluntary caregivers provide a substantial economic benefit both to the person receiving care and to society as a whole. “In 2013, about 40 million family caregivers provided 37 billion hours of care worth an estimated $470 billion to their parents, spouses, partners and other adult loved ones.” (AARP.) Make sure you honor your caregiver by having a written agreement with them that clarifies the amount of compensation they will receive and how they will be reimbursed for out-of-pocket expenses. And make sure the agreement is communicated to other family members.

If you have questions about your power of attorney or how to protect yourself or a loved one from financial exploitation, contact me or one of my colleagues at FMJ.

What's the One Document Everyone Needs?

I’m often asked what are the essential legal documents that everyone needs. While it’s true that most people need to put an estate plan in writing and most will need to decide between a will or a trust plan, there is really only one document that everyone needs, and it’s not a will or a trust. It’s a health care directive.

If you are reading this and you don’t have a health care directive, get one. Anyone over the age of 18 needs a health care directive. Why? While a health care directive can do a number of important things, the most important thing it does is nominate someone else to make health care decisions for you if you cannot. If a serious illness or accident happens and you become brain dead but remain on life support, do you have someone with the legal authority to make the decision to remove life support? Or if you have a terminal condition, is there someone who can decide for you whether to pursue treatment or palliative-only care? As some people like to say, who can “pull the plug” without having to go to court to get a court order to do it? If you don’t have a health care directive, then then answer is, no one.

You might think that, if you’re married, your spouse can make these decisions. But, there is no law in Minnesota that makes your spouse the default decision-maker for your healthcare decisions. If you want your spouse to be able to make those decisions without question, then you need to have a health care directive.

You might also think that, if you’re a young person, your parents can make health care decisions for you. Again, not necessarily. For people over 18, your parents no longer have legal authority to make healthcare decisions for you. So again, if you want your parents to have this ability, you need to sign a health care directive. If you have a child who just turned 18, I strongly recommend you have them sign a health care directive in case something were to happen to them.

In addition to nominating someone to make health care decisions for you, a health care directive can also state your wishes regarding organ donation and final disposition of your remains. There are many different forms available for health care directives, and some are quite short while others go into great detail regarding your wishes for your health care (a popular one is called the “Five Wishes”). Most physicians and clinics can also provide you with a health care directive form. You can choose any form you like, but it must have the following components to be valid in Minnesota: It must be dated and signed by you, it must nominate at least one person to act as your health care agent, and it must be either witnessed by two people or notarized. If you use witnesses, at least one cannot be a healthcare provider, and none can be your agent (or agents). Also, keep in mind that your spouse or close family member cannot notarize your documents based on legislation passed last year.

If you need a health care directive or have questions, contact me or one of my colleagues at FMJ.

How to Talk to Family About Long Term Care Needs

The holidays are fast approaching and soon we’ll all be gathering together with our families to share meals and spend rare quality time with our loved ones. It can be a fun, exciting, and stressful time of year. For many people, the holidays are when we first notice that there may be problems in our families, especially as parents or grandparents grow older. You may notice that the home is not as clean and tidy as you remembered, or that mom or dad is having a lot more difficulty moving around the house. Maybe the laundry isn’t getting done because it’s on a different floor that is no longer accessible. Or maybe there isn’t any food in the refrigerator because driving to the store is getting too difficult. Or perhaps important appointments or medications are being forgotten or skipped.

Most people need more support as they grow older, but because we live in a culture that emphasizes independence above all else, it’s extremely difficult for people to ask for help or even to accept help when it is offered. This can make it very hard for family members to raise concerns about health, safety, or isolation with their elder relatives. But the truth is that these conversations are too important not to have, even though they are difficult. Most people when asked say that they want to remain at home as long as possible and even die at home. But most people don’t die at home. Why? Because they don’t tell their loved ones what they want when they’re able to express their wishes, and they don’t develop a plan for making their wishes a reality. As the saying goes, if you’re not making a plan, then you’re planning to fail.

So, how can family members facilitate these important conversations around the holidays?

First, it’s important to acknowledge that no two families are alike. What works for one person or family might not work for you. Consider how you have broached difficult issues in the past. What worked (or didn’t work) then? What can you learn from these past experiences that you can apply to this situation?

Second, remember that your elder relative is an independent adult, even if they now need help. There is a tendency in many families to treat their elders more like children than grown-ups simply because they may have developed some cognitive difficulties or may require assistance with activities of daily living. But with the proper support, our elders can still make appropriate decisions on their own. “Supported decision-making” is an emerging concept that seeks to balance respect for the autonomy the individual with the need to protect the individual’s health and safety. Remember, if we’re lucky we’ll all get old someday, and when it’s your turn, how will you want to be treated? Try to find a way to support your loved-one’s wishes while also ensuring their health and safety is provided for.

Third, if at first you don’t succeed, try again. It can be difficult for someone who may be struggling mightily to hide the fact that they need help to be confronted by a child or grandchild with an offer of assistance or a remark of concern. They may feel shame, sadness, or anger about their situation, which may cause them to be defensive or in denial. But by showing genuine concern and allowing the person time to process their emotions and reactions, you may make more progress than if you simply confront the person and never bring it up again.

Fourth, get help if you need it. Sometimes enlisting a trusted advisor or friend to speak with your loved one can help. Maybe your elder relative doesn’t want to talk to you about it, but they would talk with their pastor or rabbi, a close friend, their banker or lawyer, their physician, a different relative, or someone else they trust. Most people have at least one person that they trust and whose opinions they respect and admire — seek out that person to help you.

Finally, use “I” statements instead of “you” statements. Instead of saying, “you’re forgetting to take your medication and you’re driving me crazy!,” try saying, “when you forget to take your medications, I get afraid that you will become seriously ill and I’m afraid of losing you and seeing you suffer.” Using “I” statements shifts the conversation away from judgment and blame. And by depersonalizing the problem, “I” statements open up space for both sides to come up with creative solutions without anyone feeling defensive.

Once you are able to identify your loved one’s wishes for their care as they age, it’s important to take the next step and make a plan. How will you pay for care if they want to remain at home? Under what circumstances would you all agree that staying at home will no longer work? If transitioning out of the home, what housing with services options are the best for your loved one? Are there assets that need to be protected from long term care costs to provide for other family members? Engage the services of an elder law attorney to help you answer these questions and make a plan that honors your loved one’s choices and ensures that they’ll be safe and healthy.

And, may you and all your loved-ones share a safe, healthy, and happy holiday season!

Elder Law Basics Series: Medicare vs. Medicaid

This post is the first in a series that I’m calling “Elder Law Basics.” The idea is to give a brief introduction to the essential elements of a law practice focused on serving the needs of the elders in our community, and to help readers understand what is meant by the term “elder law.” Elder law encompasses many things because the practice is focused on a population not on a distinct set of laws. But because the practice spans so many disciplines that we usually think of as separate — like estate planning and landlord-tenant and healthcare — it can be confusing to understand what an elder law attorney actually “does.” (By the way, “agriculture law” suffers from the same form of confusion. It too is interdisciplinary in scope and focuses on a population — farmers — rather than a particular legal discipline. What can I say, I like to wear a lot of different hats!)

I’d like to start out this first post by focusing on a health-law aspect of my elder law practice, and a topic that generates a lot of confusion and misinformation in the broader community. I’m talking about Medicare and Medicaid.

A lot of people confuse Medicare and Medicaid, but they are two separate healthcare insurance programs that originate with the federal government and involve some administration at the state level as well. Medicare is a health insurance program primarily for people over 65, although people who are permanently disabled or have certain diseases may also qualify for insurance coverage through Medicare. Medicare has four parts: Part A, which is known as “hospital insurance,” Part B, which is known as the “health insurance” part and covers some preventive care; Part C, which is “Medicare Advantage,” a sort of hybrid of Parts A and B; and finally, Part D, which is prescription coverage. Medicaid is also a health insurance program, but it pays for healthcare when a person can no longer afford to do so. A person may qualify for Medicaid if their income is too low, or if they’re over 65 or disabled and require long term care but cannot afford to pay for it. There are income and asset limits to qualify for Medicaid, and I’ll discuss those in a later post.

For now, I want to highlight some things about Medicare that most people aren’t aware of. First, you might not know that if you’re 65 and receiving Social Security, you’ll be automatically enrolled in Medicare Parts A & B. But what about people who are still working at 65? Do they need to enroll? The answer is that it depends. If you’re actively working and receiving health insurance through your employer (or your spouse’s employer), and if the company has more than 20 employees, you do not need to enroll in Medicare. But, if the employer has fewer than 20 employees, Medicare will still be considered the primary payer, and you should enroll to avoid a penalty. If you’re 65 and not collecting Social Security yet, it’s a good idea to talk with a professional about whether you should be enrolling or not so that you don’t lose coverage or have to pay a penalty.

In addition, Medicare Part A pays for hospital stays (up to 150 days), and skilled nursing facility stays that follow at least a 3-day inpatient hospital stay (up to 100 days). When it comes to skilled nursing care, many people are told by their healthcare provider that Medicare will stop paying for skilled nursing care if the patient does not show improvement. That is not true. According to a recent settlement agreement with the Centers for Medicare and Medicaid Services, there is no legal requirement that a patient demonstrate improvement for Medicare to continuing paying for care. Medicare must continue to pay for care so long as it is medically necessary for up to a maximum of 100 days.

Many people also need home health care due to age-related illnesses or after a hospital stay. Many people and care providers don’t realize, however, that Medicare Part A also pays for in-home care. So long as the care is ordered by a physician and the patient is “homebound,” which simply means they need assistance with moving (for example, a cane, walker, or wheelchair), Medicare will pay for up to 28 to 35 hours of in-home care per week, and there is no limit on how long the person can continue receiving care at home.

One big issue that has come up in Medicare cases over the years is something called “observational status.” In order to qualify for Part A coverage for a hospital stay or for skilled nursing care following a hospital stay, the patient must be considered in in-patient (not out-patient) care. Many hospitals are categorizing patients as out-patient by putting them on “observational status.” Hospitals may be afraid that they will lose money on Medicare patients, so they avoid this by making the patient’s hospital stay not qualify for Medicare coverage. Since most patients have no way of knowing whether they’ve been admitted as in-patient or whether they are on observational status, all patients are entitled to a “Medicare Outpatient Observation Notice” (MOON) within 36 hours of hospitalization. Patients on observational status can and should dispute their status with their care provider.

If you or a loved one have questions about Medicare or Medicaid, feel free to give me a call or contact my firm for more information.

New Veterans Administration Pension Benefit Rules Went Into Effect October 18

The Veterans Administration just rolled out sweeping new eligibility rules for veterans and their spouses who require long-term care. The rules apply to needs-based pensions, such as Aid & Attendance, which is a program that helps veterans and their families to offset the cost of out-of-pocket medical expenses. For example, a veteran or their spouse who receives care at home or in a facility can receive additional money each month from the Aid & Attendance pension if their income falls below a certain threshold as a result of out-of-pocket medical costs.

Until this month, in order to qualify for Aid & Attendance, the government only took into account a family’s monthly income and medical expenses. Although there was a ballpark maximum asset amount a family could have, there was no hard and fast asset limit. Better yet, there was no lookback period for gift transfers and no gift penalties imposed, which made the program more attractive compared to Medical Assistance (Medicaid). Now, that is no longer the case.

The new rules establish a maximum “net worth” limit, which takes into account both assets and annual income of the veteran and their spouse. That net worth limit is pegged to the community spouse resource allowance under Medicaid, which this year is $123,600. If a veteran and their spouse (if married) have annual income (less out-of-pocket medical expenses) plus total assets in excess of this asset limit, they can no longer qualify for Aid & Attendance. They will have to either reduce assets or reduce income (keeping in mind that an increase in care costs can have the effect of reducing income), in order to qualify. The veteran or spouse’s primary residence, including 2 acres surrounding the home, is excluded from the asset limit.

In addition, the new rules impose a 36-month lookback period for transfers of assets for less than fair market value. (This is less stringent than the 60-month lookback period for Medicaid.) The penalty period is calculated by taking the sum of all gift transfers made within the lookback period and dividing it by the maximum monthly pension amount, which determines the number of months that the veteran or spouse is ineligible for VA pension benefits. A penalty period begins to run on the first of the month following the date of the last gift transfer. Only gift transfers that result in financial eligibility are penalized, however; if the veteran or spouse was already below the net worth limit, or if they were close to it, the penalty is reduced or can be zero depending on the circumstances.

The takeaway: Veterans and their families who are considering applying for Aid & Attendance benefits through the VA should consult a VA-accredited attorney like me as soon as possible to determine whether they need to wait to apply due to the new transfer penalty rules and whether they meet the new net worth limit. Please contact me if you have questions.

GRATs Make the News -- But What Are They?

As an attorney, I’m always a bit tickled when a relatively obscure estate planning device makes the national news. Just a couple years ago, the untimely passing of Prince (legendary Minnesota musician and personal favorite of mine) brought the importance of estate planning to the national stage. Even more recently, the passing of Aretha Franklin, another great talent who neglected to make a will, has reiterated the point. Even so, the statistics reveal that the vast majority of Americans do not have any estate plan in place. But this post is not about celebs who failed to plan, but rather celebs who planned quite well, and what we can learn from them.

In a recent investigation by the New York Times, reporters revealed that President Trump’s father, Fred Trump, a billionaire in his own right, used something called a “GRAT” to pass his fortune onto his children. The Times revealed that, using this GRAT, Trump’s estate paid far less in estate taxes than it otherwise might have had to do. So, what is a GRAT?

A GRAT is a grantor retained annuity trust. It has its origins in an estate tax loophole in Internal Revenue Code Section 2702. Section 2702 was enacted in 1990 to eliminate what were called grantor retained income trusts (or “GRITs” — see, isn’t this fun?). Congress wanted to stop people from being able to transfer assets to their children in a trust while retaining the income to themselves and using the income to offset the transfer taxes that would ordinarily be owed to the government. While the law outlawed “GRITs”, it continued to allow a very similar arrangement so long as the grantor received a fixed amount of income, or an annuity, instead of a variable income stream. Thus, the GRAT was born.

The advantage of a GRAT is its ability to freeze the present value of an asset for transfer tax purposes even though the asset continues to appreciate. Suppose you have an asset that you know is going to grow in value in a big way — say stock in a closely held company that’s about to go public. Later on you might want to gift the stock to your children, but by then the stock will be so valuable you might have to pay gift or estate tax on it; but you don’t want to give the stock to your children now before it appreciates. If you create a GRAT, you can transfer the stock to the GRAT, the GRAT will pay income to you for a fixed term (2-10 years is typical) based on the present day value of the stock, the annuity income can zero out the transfer tax obligation you would otherwise have, and your children will later receive the stock after it has grown in value, tax free. In short, you transfer an asset to the GRAT, the GRAT pays you pack the initial value of the asset upon the date of transfer, and then your children receive the appreciated asset later on, tax free (or tax reduced).

You might be thinking that you have lots of assets — stocks, real estate, etc.—that are likely to appreciate, so why aren’t we all using GRATs? First, because most people today will never owe any estate or gift tax. The current federal estate tax exemption is $11.2 million per person. That means a married couple can transfer $22.4 million combined tax-free. If you’re wealth is below this figure, a GRAT probably isn’t for you. Second, if your asset fails to appreciate as expected, there’s no advantage. The assets in the GRAT have to appreciate at a rate greater than a rate established by the IRS under Internal Revenue Code Section 7520, and that can be hard to predict in the real world. Third, if the grantor dies before the end of the GRAT annuity term, the whole thing is included in the grantor’s gross estate for the calculation of the estate’s tax obligation. That’s a lot of “what ifs”!

Last, there are alternatives to GRATs that most people should consider. If you live in a state, like Minnesota, that has a state estate tax exemption that is much lower than the federal exemption, you could still have to worry about estate tax even if you don’t have a Trump-sized portfolio. For these folks, an irrevocable life insurance trust (ILIT) or charitable giving may be a more appropriate, less risky, and less complicated alternative.

So, while GRATs aren’t for everyone, estate plans are. Borrow a play from the Trump family play book and contact a lawyer today to get started on your estate plan. An attorney like me or my colleagues at FMJ can help you find the right plan for you.

Farmer Co-ops and Illegal Price Fixing

Farmers are commonly known as “price takers” not “price givers.” This is because most farm operations are small in comparison to agribusiness suppliers. This was certainly true when the first farmer coops were created in the 19th century, and even more true today in the wake of mega mergers in the agriculture industry. As the industry continues to consolidate, prices for farm inputs tend to go up as competition among suppliers decreases. When farmers join together to form a cooperative, they can aggregate their buying power, putting them on a more equal footing with larger corporations.

Recognizing the value of farmer coops, the US legislature passed the Capper-Volstead Act in 1922 to protect farmer coops from charges of unfair competition. Normally, under antitrust laws, separate individuals cannot work together to fix prices in their industry, since doing so would be anti-competitive. The Capper-Volstead Act makes an exception to this general rule for cooperatives comprised of agricultural producers. It’s one of the many unique exceptions in US law that applies specifically and exclusively to farmers. The law is important because, without its protections, farmer cooperatives that set prices for their goods would be illegal.

But not every farmer cooperative meets the qualifications for Capper-Volstead exemption from antitrust laws. The coop must meet very specific requirements. The requirements come in two flavors: (1) Structural, and (2) Functional. The first structural requirement is that all coop members must be agricultural producers. If even one member is not a producer, the whole coop loses its exemption from antitrust laws. This can be a difficult question today as more farms grow their operations to include things like processing, packing, or marketing agricultural products. Therefore, it is important to include provisions in the coop’s bylaws stating that membership is limited to producers and for the coop to regularly review its membership to make sure that all members are still primarily agricultural producers.

The second structural requirement is that the coop must be operated for the “mutual benefit” of its members. This generally means that the coop is democratically controlled by its members and that profits are returned to farmer members. The third structural requirement is that the coop must provide for only one vote per member or, instead, the coop cannot permit more than an 8% return on member equity. Usually, the simplest thing is to provide for one member-one vote. The fourth and final structural requirement is known as the 50% rule: the coop cannot deal in the products of nonmembers in an amount greater than the products of its members. These requirements are intended to further essential cooperative principles, such as democratic control, open membership, and cooperation.

The functional requirements are the things that a coop can and cannot do. The only activities a coop may lawfully engage in are processing, preparing for market, handling, or marketing of agricultural products of its members. Anything beyond these activities is illegal. For example, a farmer coop may not acquire competitors for anti-competitive purposes; it may not coerce customers, suppliers, or nonmembers into doing business with them; it may not conspire to eliminate a competitor; and it may not conspire with other businesses or groups to fix prices. In essence, farmers may cooperate to gain equal footing among corporations; but it may not conspire to crush its competition. As an example, a large cooperative of mushroom growers was discovered to have been buying up competitors’ mushroom farms, selling them at a loss, and saddling the properties with a perpetual deed restriction stating that no mushrooms could be grown on those farms any longer as a way of controlling the mushroom supply and driving up prices for its members. The cooperative was sued alleging antitrust violations. Though the coop raised Capper-Volstead antitrust immunity, the federal district court was not persuaded.

If you have questions about cooperative antitrust immunity or what should be in your coop’s bylaws, contact me or another of my super smart colleagues at FMJ!

The Importance of Regulatory Compliance for Ag Suppliers

If you’re in the business of selling farm inputs to farmers, you may not know that simply having the wrong label on a product could result in a fine of almost $20,000 per sale. What may seem like an inconsequential difference between one label and another could result in crippling fines when it comes to the sale of products regulated by the U.S. Environmental Protection Agency. Earlier this year, the EPA raised its maximum fine amount to $19,446 for violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Just ten years ago, the maximum fine per violation was just $6,500. Products regulated and subject to penalties under FIFRA include pesticides, herbicides, fungicides, and similar products.

Under FIFRA, all pesticides must have a label approved by EPA, and the label must be displayed on the product. The label provides instructions on safe handling to ensure the safety of the applicator as well as the safety of the environment. Two products can have very similar sounding names, but still have very different labels, which can make following FIFRA a regulatory challenge. If a product has been mislabeled, each sale of that product is considered a separate and independent violation. So, if a coop makes 1,000 sales of a mislabeled product, they could incur fines of almost $19 million.

The best medicine is always prevention, which is why it’s important to have someone on staff whose job it is to ensure compliance with all applicable state and federal regulations. For businesses that have an internal audit program in place, EPA rewards self-reporting of violations by offering reduced fines so long as the audit program complies with certain criteria. It is important to remember that all self-discovered violations must be reported to EPA within 21 days. EPA has an eDisclosure system for online reporting.

For businesses already facing a potential fine, it’s important to understand the process and your rights. EPA will first send a Notice of Intent to File Administrative Complaint. This Notice will inform the violator of the basis for the alleged violation and a proposed fine. The violator has the opportunity to negotiate with EPA to reduce the fine by, for example, implementing a Supplemental Environmental Project (SEP) to mitigate the harm caused. After a Complaint is filed against the company, the company has the opportunity to appeal the fine to an Administrative Law Judge (ALJ) who works for the agency. From there, the business can appeal the ALJ’s decision to the Environmental Appeals Board (EAB), which is the last stop before the violator can appeal directly to federal district court. As you can see, the appeals process can be lengthy and expensive, which is why prevention is so important.

For more information on EPA compliance or if you have questions, contact me or my colleagues at FMJ for help.

Employment rules to know when employing commercial drivers

Farmer co-ops and farm businesses that employ commercial drivers for trucking or hauling products need to be aware of certain employment laws that apply specifically to commercial drivers.  Failure to follow these rules could lead to fines, suspension of business, and impoundment of commercial vehicles.

1. US Department of Transportation Drug & Alcohol Policy.

Most employers have some type of drug and alcohol policy for their employees that restricts the use of intoxicating substances while on the job.  What you might not know is that, for commercial drivers, the federal Department of Transportation requires employers to have a specific drug and alcohol testing program in place and to inform their employees about the drug and alcohol testing policy.  Failure to do so can result in fines, suspension of business, or vehicle impoundment.

The rules are complicated, but in essence employers must perform drug and alcohol tests on all commercial drivers of vehicles with a gross vehicle weight rating of 26,001 or more pounds.  Testing must be undertaken prior to employment, at random, when there is reasonable suspicion of substance use, after an accident, when an employee is returning to duty after being removed, and follow up testing as necessary.  Employers may contract with an authorized service agent to provide the testing services.

In addition, employers must have a written policy and must provide the policy to their employees.  It's a good idea to include this policy in the employee handbook or manual.

More information is available at the DOT's website and in the DOT's Employer Handbook.

2. Special overtime rules for commercial drivers.

Most employers know that you're supposed to pay employees time and a half for hours worked in excess of 40 hours per week.  But, this rule does not always apply to commercial drivers.  If you don't know the rules, you might be paying too much or too little in overtime to your employees.

The rule is called the "motor carrier exemption."  Ordinarily, under the Fair Labor Standards Act, an employee is entitled to one and one-half times their "regular rate" for all hours worked over 40 that week.  But under the Motor Carrier Act, some employees are exempt from this requirement.  An employee is exempt if:

1. They are employed by a motor carrier (transportation industry) or motor private carrier (the employee transports the employer's goods);

2. They are employed as a driver or have other duties that affect the safety of operation of motor vehicles (includes, among others, someone loading goods on and off a vehicle or servicing a vehicle);

3. The employer's vehicles have a gross vehicle weight rating of at least 10,001 pounds; and

4. The employee drives or reasonably could drive across state borders.

If an employee meets all four criteria, the employer is not required to pay time and a half.  The employee is still subject to state and federal minimum wage requirements, however.

These rules are complicated, and a violation of these rules can come with expensive fines or obligations to pay back wages, which is why consulting an attorney with experience in this area is important.  Contact me or the other great attorneys at Fafinski Mark & Johnson, P.A. if you have questions or concerns.