In the last Regulatory Roundup, ICSA Director of Operations Shawn Nelson wrote about the challenges posed by California’s Assembly Bill 5. By adopting the “ABC” test to determine employee or independent contractor status, California hoisted most owner-operators on prong “B,” which deems a worker an employee if engaged in the usual course of business of a company. For an owner-operator offering truck driving services to a motor carrier, it is difficult to distinguish the role of the owner-operator from the basic function of the fleet.
Now the U.S. Department of Labor (DOL) has weighed in on this longstanding issue. Precluded by court decisions from directly adopting the “ABC” test as a federal standard in determining employee classification, the DOL published on October 13, 2022, a Notice of Proposed Rulemaking (NPRM) in the Federal Register. If adopted, DOL would impose a six-factor test in deciding whether a worker is an employee or an independent contractor.
Those six factors, DOL says, are to be weighed equally, thereby abandoning the employee classification test used by the Trump Administration, which emphasized two “core” factors. Those “core” factors – the nature and degree of control over the work and the worker’s opportunity for profit or loss – often favored a determination that a worker was an independent contractor.
More problematically, the DOL also would consider such company standards as worker compliance with laws, rules, safety regulations and customer directions as evidence of employer “control,” contributing to a determination that a worker is an employee. Thus, a company that requires an owner-operator to follow the speed limit – as required by law – could result in the owner-operator being viewed as an employee - not a great result for a motor carrier that simply wants a safe operation.
Comments on the Department of Labor’s NPRM were due by Nov. 28, 2022.
Every year, TAT (formerly called Truckers Against Trafficking) honors a member of the trucking, bus or energy industry, whose direct actions help save or improve the lives of those exploited or prevent human trafficking from taking place, with the Harriet Tubman Award
Bob Costello has indicated that the freight market has improved – but very slowly – since January. It must be said that ATA’s indices are dominated by contract freight as opposed to spot rates.
Now, however, with Republican control of both houses of Congress and the White House (and, some say, the Supreme Court) I am optimistic that trucking will get a fairer shake than it has during Biden’s term in office.