A trio of state trucking groups voiced concerns regarding the U.S. Department of Labor’s proposal to determine if a worker is an employee or an independent contractor.
The Florida Trucking Association, Alabama Trucking Association and Kentucky Trucking Association recently filed similar comments in opposition to the Department of Labor’s notice of proposed rulemaking.
“We are concerned that, if finalized, the proposal would harm our industry, the independent entrepreneurial men and women who work with our members as owner-operators, our nation’s supply chain and most importantly the general public,” the Florida Trucking Association wrote. “In fact, the proposal will only benefit trial lawyers litigating this issue in court by blurring the lines so badly that virtually every case has to go to trial.”
The Department of Labor’s proposal published on Oct. 26 would analyze several factors and use the “totality of the circumstances” to determine a worker’s status.
The rulemaking would rescind a prior Trump administration rule, which adopted an economic reality test focused on two core factors – control and profit. The Labor Department proposes an economic realities test that requires a totality-of-the-circumstances analysis of multiple factors, including:
- The opportunity for profit or loss, depending on managerial skill.
- The investments by the worker and the employer.
- The degree of permanence of the work relationship.
- The nature and degree of employer control.
- The extent to which the work performed is an integral part of the employer’s business.
- The worker’s use of skill and initiative.
The comment period on the Labor Department’s proposal ended Dec. 13. According to Regulations.gov, the department received more than 51,000 comments.
Although the rule would apply to all industries, representatives from the trucking industry accounted for a significant portion of the comments.
“The proposal on its face contradicts Wage and Hour’s stated motivation of ‘providing additional clarity to workers and employers on the concept of economic dependence,’” the Alabama Trucking Association wrote. “Instead, it expands the test for independent contractor status from two core issues with three additional considerations to six plus a catch all seventh while also creating subtests that overlap at least conceptually or completely with aspects of other parts of the test.”
The state trucking groups urged the Department of Labor to reconsider the proposal or at least provide specific guidance in the regulatory text to delineate when contract provisions will create an employee-employer relationship.
“Failure to provide that guidance will create havoc in our industry and result in less safe roads for the American People,” the Kentucky Trucking Association wrote.
The Owner-Operator Independent Drivers Association told the Labor Department that a successful worker classification rule in trucking would allow truly independent owner-operators to maintain their business model while also protecting drivers from predatory carriers.
“OOIDA has long advocated for a classification structure that offers truckers the opportunity for true independence to operate their own small businesses, while protecting them against carriers that seek to take advantage of them through misclassification,” the Association wrote. “This is a difficult task, given the diverse nature of the industry and the ability for carriers and truckers to enter into many different types of working arrangements.
“Any final rule must … ensure that independent owner-operators can continue to use a business model that has benefitted truckers for decades as well as ensure that drivers are protected from misclassification.”
OOIDA said it supports the Labor Department’s rejection of the ABC Test and its stated approach to examine all aspects of a working relationship. However, the Association said the proposal needs to offer more specific guidance to ensure that the intent isn’t interpreted incorrectly.
“The success or failure of this proposal will depend on its specifics and how it is implemented and interpreted,” OOIDA wrote. “We have concerns that some of the details offered in the proposal depart from practices that have long been considered indicative of independent contractor status.”
OOIDA’s complete comments can be found here. LL