OCT-28-2010 16:22 FROM: Jens eps okra its Foe Ky (ier (esctnpeen toaster. ovat meds onto Selene comet up out weit pe Bena te ghee Mes eae Wes 1 erate HEBEAGLE TRANSPORTA 207-847-9368 Tossse2a76122 Pd ; Darel Rose mmo Drummond\‘isozsu ere PA eis drose@dwmtaw.com {800} 727-1961 teen St) Ad ay Rie ertam ct eeetewenoes October 14, 2009 Gloria Brown Chebeague Transportation Co. P.O. Box 27 Chebeague Island, ME 04017 RE: Exempt Status of Captain and Deckhand Positions ‘Dear Ms. Brown: am writing to follow up on our conversations regarding whether the boat captain and deckhands that operate the Chebeague Island boat trips between Chebeague Island and Cousins Island are exempt from the overtime pay requirements of Federal and State law, As set forth below, we believe that the boat captain would be considered exempt from overtime pay requirements, and that the deckhands might be exempt depending on specific facts regarding their job duties, the work schedule, and how they utilize the time between boat trips. A discussion of these issues is set forth below. In order for an employee to be exempt from the requirement that the employee be paid overtime for hours worked more than 40 in a given work week, the employee must meet two tests: 1) he or she must be paid on a salary basis, and 2) he or she must perform “exempt work” as that phrase is defined by law. 29 CFR §541.602. If an employee satisfies both of these tests, the employee is not paid for overtime hours worked. In regard to the salaried basis test, an employee will be considered to be paid on a salaried basis if the employee receives a set amount of pay on a weekly or bi-weekly basis and that amount is not subject to reduction based on the quality of work performed or the amount of work the employer has for the employee. Furthermore, the employee's predetermined salary must be a minimum of $455 per week. 29 CFR §541.600(a). While there are limited circumstances in which an employee’s pay may be cut pursuant to the salaried basis test (¢.g. suspension for misconduet/exhaustion of paid sick leave), the general rule is that the employee must receive the same amount of money each week. Determining whether an employee performs exempt work is almost always more complicated than determining whether they are paid on a salaried basis. Both the State and Federal laws provide three major types of work that are exempt from overtime - executive, professional, and administrative. While these are the main categories of work that are exempt, there are other types of work that are exempt pursuant to Federal and FFmenras.OCT-28-2018 16:22 FROM:CHEBEAGLE TRANSPORTA 207-847-9368 To: 1e882076122 P.2 October 14, 2009 Page 2 State law. The most relevant of these exceptions is the exclusion from overtime pay requirements for any “employee employed as a seaman” (the term “mariner” is used in Maine law). 29 USC § 213(b)(6). The term “seaman” is not defined in the statute, but it has been defined by the Department of Labor regulations and court decisions. The regulations define the term “seaman” as an employee who: performs as master or subject to the authority, direction, and control of the master aboard vessel, service which is rendered primarily as an aid in the operation of such vessel as a means of transportation, provided he performs no substantial work of a different character. 29 CFR §783.31. Courts have interpreted this to mean that approximately 80% of a seaman's time must be utilized in the aid in the operation of the vessel on which they serve. The term “seaman” has been interpreted to include members of the crew such as sailors, engineers, radio operators, firemen, pursers, surgeons, cooks and stewards if, as in the usual ease, the service is of the type necessary for the operation of the vessel Boat Captain As noted above, we believe itis likely that the boat captain will be considered exempt from the overtime pay requirements of both Federal and State law. It is our understanding that the boat captain is paid on a salaried basis. We further understand that the captain receives the same pay without regard to either the number of boat trips taken in a specific day or the amount of time he works on a given day. Assuming these facts to be accurate, the boat captain would pass the salaried basis task. It is also likely that the boat captain would qualify as a “seaman” as that term is defined by Federal law, We understand that virtually all of the captain’s time is spent engaged in duties, related to the operation of the boat. Furthermore, we understand that between boat runs he is cither on-call waiting for the boat run or tending to duties related to the boats operation Therefore, it is likely that the boat captain is exempt from the overtime pay requirements. Deckhands The salary basis test applies equally to deckhands as it does to the boat captain if both are paid on the same basis. Thus, to the extent these employees receive a minimum of $455 per week and receive their pay regardless of the amount of work to be performed or the hours they are engaged in work, they would meet the salaried basis test ‘What is less clear, however, is whether the deckhands will be considered to perform. “exempt” work. While we believe there is a strong argument that deckhands are also seamen, the U.S. Department of Labor has taken a narrow view of the definition of the term “seaman.” "Tf, however, the boat captain spent significant periods of time (more than 20%) working on a boat in dry dock, the captain might not be considered a “seaman”, but rather a laborer.OCT-28-2018 16:23 FROM:CHEBEAGLE TRANSPORTA 207-847-9368 TO: 18882076122 P.3 October 14, 2009 Page3 ‘The Department of Labor representatives in Maine have taken the position that deckhands on a ferry are not seamen both because 4 significant amount of their time is spent loading and unloading baggage and because they appear to do little while the vessel is underway. We understand, however, that Chebeague Island deckhands are not charged with loading and unloading baggage or material. Furthermore, we believe that while the boat is underway, the deckhands are charged with being prepared in case of an emergency as well as ensuring that nothing interferes with the proper operation of the boat. The argument as to why deckhands should be considered seaman is straightforward, Under Federal law, Chebeague Island ferries are considered “small passenger” vessels and are subject to Coast Guard inspection. 46 USC § 3301. As part of that inspection, the Coast Guard determines the minimum number of individuals and crew necessary for safe operation of the vessel. 46 USC § 8101(a). Federal law and Coast Guard regulations mandate that a vessel may not be operated without having in its service the complement of deckhands required by the Coast Guard. 46 USC § 8101(d). In fact, passengers are not permitted on the vessel without the minimum complement of deckhands on board. 46 CFR § 176.100. Chebeague Island boats have ‘Coast Guard certifications requiring that there be a deckhand on board. Therefore, because a deckhand is required by law to be on board for the safe operation for the vehicle, it would seem axiomatic that the essence of the Chebeague Island deckhands’ job is to aid in the operation of the ferry. Indeed, the fact that small passenger vessels have to have a complement of qualified crew on board, and that the deckhands have to be trained to know their safety duties, makes clear that deckhands are critical not only to the safe operation of the ferries, but literally to any operation of the ferries. However, while there is a strong argument that deckhands should be exempt from overtime pay as seamen, there is also a substantial risk that the Department of Labor will not agree with this assessment. Not only may the Department of Labor argue that these employees are not engaged in seaman duty while on the boat, but the amount of time spent off the boat could also be factored in to determine that they are not seaman. For example, if deckhands are working on a boat in dry dock, or doing other work unrelated to the operation of a vessel, that work would not be counted toward 80% seaman’s duties required by law. However, even if deckhands are not exempt from overtime pay as seamen, a close look at the definition of the phrase “hours worked” might still limit, or perhaps climinate, the overtime liability risk to the Chebeague Transportation Company. An employce who is not exempt from the overtime payment requirements, must be paid time and a half for all “hours worked” over 40 hours. However, not all hours for which an employee is paid are “hours worked” as that phrase is defined by wage and hour laws. For example, an employee is not considered to work if: 1) the ‘employee is completely relieved from duty and allowed to leave the job; 2) the employee is relieved until a definite, specified time; and 3) the relief period is long enough for the employee to use the time as he or she sees fit. See generally, 29 CFR § 785.15. This testis fact-specific and much will depend on whether deckhands are completely relieved from duty and whether there is sufficient time between jobs for them to use as they see fit. In general, an employee must have at least an hour off in order to meet this test, and they must be in a location where theyOCT-28-2018 16:23 FROM:CHEBEAGLE TRANSPORTA 227-647-9368 TO: 18882876122 eae October 14, 2009 Page 4 can use the time productively. For example, if deckhands have an hour or more between boat runs, and if in that time they can go home (assuming that their house is close to the dock or they have transportation), then they might meet this test. While waiting time may not constitute hours worked in the circumstances described above, an employee who is subject to being called back to duty (“on-call time") may have these hours counted toward overtime. As with waiting time, the compensability of on-call time requires a fact-specific case-by-case analysis. The factors that a court might review to determine whether to count on-call time as hours worked include: a) the frequency of calls during on-call periods; b) how the employee uses the on-call time; ¢) the physical restrictions placed on an employee while on-call; d) how close they must be to the workplace; and e) the time he or she reports back to work (referred to as “response time”). In order for on-call time not to count as ‘compensable time or hours worked, the number of times the employee is actually called back to ‘work has to be fairly infrequent and the employee's time while on-call must be his or her own to use as he or she pleases. Thus, if deckhands are subject to frequent call backs, the time that they are off duty would likely count toward hours worked for overtime. SUMMARY ‘Assuming the facts discussed above, we believe that boat captains who are operating the vessels (or otherwise off duty) and paid on a salaried basis are exempt from overtime payment laws as seaman. Deckhands may be exempt as seaman if 80% of their time is spent on board vessels and they are performing seaman work. If they do not meet this test, they still might not qualify for overtime if they have significant periods of down time in which they have no duties and can use the time as their own. Sincerely, Danicl J. Rose DIR/plf