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Motor carriers and independent contractors in written comments expressed objection to a U.S. Department of Labor proposal to withdraw a rule designed to clarify the federal standard for determining if a truck driver is a contractor or employee.
The agency in January said the rule — issued that month — was designed to promote “certainty for stakeholders, reduce litigation and encourage innovation in the economy.” The proposal to drop the rule drew more than 1,000 comments.
Issued in the waning days of the Trump administration, the federal rule called for elimination of the so-called ABC test used in California to determine whether a truck driver is an employee or independent contractor. The rule was widely viewed as favorable to motor carriers and drew support from groups including American Trucking Associations. Many independent contractors also filed comments to oppose dropping the rule.
Despite this widespread support, there has been speculation that it would not survive a review by the Biden administration. The Labor Department has yet to decide if the rule will remain, but comments on the proposal urge the agency to leave it in place.
“As a sizable commercial motor carrier utilizing both employee drivers and independent contractors, CRST opposes the rescission of the final rule,” wrote Cedar Rapids, Iowa-based carrier CRST The Transportation Solution Inc. “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.”
“The final rule achieved a streamlined and commonsense process for more consistent application of independent contractor status,” ATA wrote. “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.”
ATA added, “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.”
The Owner-Operator Independent Drivers Association also opposed dropping the final rule.
“Prong B of the ABC Test is most problematic for leased-on owner-operators because they are performing work that is in the usual course of the hiring entity’s business — hauling freight by truck,” OOIDA wrote. “Because they are unlikely to satisfy Prong B, leased-on owner-operators would be classified as employees if they want to continue working with carriers.”
Spirit Transport Systems Inc., a drayage operator that contracts with 38 independent contractors — many of which are small, minority-owned businesses — said the final rule’s business model is indispensable “specifically and in general to the intermodal transportation and drayage industry.”
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Spirit wrote, “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. They also invest a significant amount of time developing their knowledge of and complying with federal and state safety regulations.”
Many contractors also wrote in support of the rule.
“The new DOL rule helps me and freelancers like me to build meaningful, rewarding careers,” wrote contractor Joseph Cunningham. “For the sake of millions of others like me — many of whom are women and minorities — please keep the new rule.”
“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,” said independent contractor James Alburger. “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.”
Added contractor Katie Saunders, “I love the work I do, and it has supported my family for 10 years and now allows me to pick my children up from school and help with homework while also making a living. Not to mention, I make more money as a contractor than I ever did as a full-time employee.
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