ATA Expresses Concern Over Labor Secretary Nominee Julie Su
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In a letter to U.S. Senate labor leaders, American Trucking Associations President Chris Spear expressed concern about the track record that Labor Secretary nominee Julie Su would bring to the job, specifically as it relates to the rights of truck drivers to be independent contractors.
“California’s AB 5, which Ms. Su helped pass and implement as Secretary of the California Labor and Workforce Development Agency, essentially outlaws their business model,” Spear wrote in a letter to Sen. Bernie Sanders, (I-Vt.), chairman of the Senate Committee on Health, Education, Labor and Pensions, and ranking member Bill Cassidy (R-La.). The letter was copied to members of the committee.
“AB 5 is designed to strip independent drivers of their choice and right to operate as contractors for motor carriers, in essence forcing them to become company employee drivers,” Spear added. “It is wreaking havoc on thousands of self-employed, small business owners by forcing them into legal limbo and placing administrative, compliance, legal and other unsustainable costs on the industry.”
Su is currently deputy secretary of Labor and has been nominated by President Joe Biden to become Labor Secretary.
Julie Su has led opposition to the choice, freedom, and right of drivers to run their own #trucking business and operate as independent contractors. We're asking the Senate to hold her accountable when weighing her nomination to head @USDOL. https://t.co/XoO8cIOe8v — American Trucking (@TRUCKINGdotORG) March 16, 2023
Spear said ATA is “gravely concerned” by a notice of proposed rulemaking published by the Department of Labor’s Wage and Hour Division in October because it is very likely to have a similar effect to California’s AB 5 law if the proposal stands.
“Without the hundreds of thousands of independent owner-operators in our industry today, the supply chain would grind to an immediate halt, and a way of life of hundreds of thousands of small business men and women could be eradicated,” Spear wrote. “Ms. Su has significant authority over the rulemaking process as deputy secretary of Labor and will have almost complete authority to write the final rule should she be confirmed as Labor secretary.”
Spear suggested that committee members pose the following questions of Su during the confirmation process:
- Do you consider AB 5 a policy success generally, and specifically as it relates to trucking?
- What is your message to self-employed truckers who were forced by AB 5 to leave California to save their business, income, lifestyle and freedom to earn a living on their own terms?
- Many independent contractors choose to operate independently so they can determine their own schedules, grow their earning potential, and achieve their desired level of work-life balance. Why should they be denied that right to choose their own career path?
- Do you believe that the department of Labor should consider contractual safety requirements between a motor carrier and an independent contractor as evidence of misclassification and a violation of the Fair Labor Standards Act?
California’s AB 5 law, which was originally planned to take effect in January 2020, was stalled for a little more than two years due to a federal lawsuit filed by the California Trucking Association, but technically went into effect last year after the U.S. Supreme Court declined to hear an appeal by CTA.
CTA has since asked a federal judge to issue a preliminary injunction.
The law is designed to reclassify independent contractors into motor carrier employees using what is known as the “ABC test.” The three-pronged test requires motor carriers to classify their workers as employees unless they demonstrate that the worker is free from the control of the hiring entity, performs work outside the usual course of the hiring entity’s business, and is customarily engaged in an independent trade or occupation.
During its legal fight, CTA had claimed that the second condition, known as the B-prong of the test, makes it virtually impossible to block an owner-operator from being reclassified as a motor carrier employee.
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