There has been a lot of back and forth stipulation in regards to the recently-issued rule determining whether or not a truck driver is considered an employee or a contractor at the federal level.
The rule, which was recently officially implemented, was explained by the U.S. Department of Labor as helping to create “certainty for stakeholders, reduce litigation, and encourage innovation in the economy.”
Now, independent contractors and motor carriers across the nation have made clear their objection to the agency’s proposal to withdraw the rule. More than 1,000 written comments have been made in response to this new proposal.
The initial federal rule, which was issued near the end of 2020, aimed to eradicate the ABC test that had been used in the state of California as a method of determining whether or not a truck driver is an independent contractor, or if the driver is in fact an employee. Motor carriers deemed the rule as being favorable and the American Trucking Associations made clear their support. Some independent contractors even issued comments expressing their opposition to dropping the rule.
Regardless, many industry experts understood that the Biden administration’s review of this rule would likely lead to its dismissal. Public comments have shown a desire to keep it in place; however, the Labor Department has not made a decision as to whether or not this will be the case.
“As a sizable commercial motor carrier utilizing both employee drivers and independent contractors, CRST opposes the rescission of the final rule,” said CRST The Transportation Solution Inc., a carrier based out of Cedar Rapids, Iowa. “In trucking, the independent contractor/owner-operator model provides hundreds of thousands of drivers the opportunity, autonomy, and entrepreneurial empowerment to run their own business and work in ways that suit their individual business, financial goals, and lifestyle.”
According to Spirit Transport Systems Inc., keeping the final rule in place will be vitally important, “specifically and in general to the intermodal transportation and drayage industry.”
Spirit operates within the drayage sector with 38 independent contractors.
“These small business owners earn a commercial driver license, invest in a tractor, and bear the associated operating costs attributable to registration, licensing, insurance, and fuel,” wrote Spirit in response to the proposal. “They also invest a significant amount of time developing their knowledge of–and complying with–federal and state safety regulations.
American Trucking Associations has also strongly opposed the final rule being reversed, noting that it believes these workers should be able to choose the capacity in which they earn their income.
“The final rule achieved a streamlined and commonsense process for more consistent application of independent contractor status,” wrote ATA. “The final rule importantly continues to recognize that working Americans should have the freedom to pick the occupation and economic framework for making a living that they desire.”
The agency also explained its belief that the updated description of independent contractors can help ensure that these workers don’t face any potential litigation in regards to an independent contractor’s duties.
“The final rule also provides businesses with clarity on the characteristics of a bona fide independent contractor so they can more easily comply and avoid litigation while ensuring that DOL’s Wage and Hour Division can pursue those who improperly misclassify their workers as independent contractors.”
Contractor Joseph Cunnigham agreed with ATA’s stance.
“The new DOL rule helps me and freelancers like me to build meaningful, rewarding careers,” he said. “For the sake of millions of others like me–many of whom are women and minorities–please keep the new rule.”
Still, though, the argument against keeping this rule is that truckers working as employees are able to earn a minimum wage, overtime, benefits, and will have companies that will be liable–and have better coverage–in the event of an accident. Keeping truckers on as independent contractors is cheaper for trucking companies–but not necessarily better for those involved in a truck-related crash.
It seems, however, that many independent truckers do indeed value their freedom over these benefits.
“The ABC test in AB 5 implemented three factors for determining employee/independent status and resulted in a situation in which it became extremely difficult to even qualify as an independent contractor,” explained James Alburger, an independent contractor himself. “There are hundreds of thousands of us who thrive on our independence when it comes to the work we choose to do, the way in which we do our work, and the compensation we receive for our work.”