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February 4, 2021 12:15 PM, EST

Trump Administration Independent Contractor Actions Face Uncertainty

Independent contractor welcomia/Getty Images

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The U.S. Department of Labor is backing off a pair of actions issued in the waning days of the Trump administration that were widely perceived to be favorable to motor carriers’ use of independent contractors.

Spurred by a regulatory freeze — set Jan. 20 just after President Joe Biden’s inauguration — the DOL on Feb. 3 announced a 60-day delay on its final rule that revised its interpretation of independent contractor status under the Fair Labor Standards Act. The agency said the rule, originally due to go into effect on March 8, would “promote certainty for stakeholders, reduce litigation and encourage innovation in the economy.”

But the pre-publication announcement by DOL said it would delay the rule’s effective date until May 7. In the meantime, it will solicit public comments on the rule delay through Feb. 24.

Also, the agency announced on Jan. 26 it was withdrawing its opinion letter that declared motor carriers can supply independent contractors safety equipment and require safety training without jeopardizing their independent contractor status.

READ MORE: Department of Labor Issues Final Rule on Independent Contractor Status

The agency’s Wage and Hour Division explained that it has revoked the opinion letter since it was “issued prematurely” because it was “based on a rule that had not gone into effect.”

The independent contractor final rule, if it survives, offers a federal standard generally more favorable for motor carriers than the so-called ABC test used in the California Assembly Bill 5 law to determine whether a truck driver is an employee or independent contractor.

Richard Pianka

Pianka

Richard Pianka, deputy general counsel for American Trucking Associations, told Transport Topics he could not predict whether the rule will ultimately die, or be retained or revised by the new administration.

“But I think there’s an expectation that the independent contractor rule will go away, one way or the other,” Pianka said. “We certainly know there are a number of groups that were not happy about the IC rule who are likely be influential and will be urging this administration to undo it.”

The opinion letter could be revived, but by withdrawing it the agency attempted “to erase the blackboard,” Pianka added.

ATA supported the independent final rule. “This rule would provide a welcome step in the right direction, providing fleets and independent contractors with needed clarity,” said Bill Sullivan, executive vice president of advocacy for ATA.

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In a statement on Feb. 2, Indianapolis-based law firm Scopelitis, Garvin, Light, Hanson and Feary PC expressed concern that the Trump administration’s independent contractor rule will not be retained in its current form.

“There seems to be little chance the independent contractor regulation becomes effective in its current iteration,” the statement said. “Without question, a push will be made for some form of a test more weighted to finding employment status, including in at least some contexts, a push for something more akin to the harsh ‘ABC’ test adopted in California.”

“The president has a long list of employment-related issues to address in his first 100 days in office,” the statement said. “The first few days of the administration, alone, have seen an aggressive push with respect to employment issues, and more are promised.”

The majority of public comments on the rule were favorable, saying it would add clarity and would encourage flexible work arrangements that benefit businesses and workers alike.

However, the American Federation of Labor & Congress of Industrial Organization opposed the rule, saying that DOL’s “quest for certainty” of a definition “is quixotic.”

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