Department of Labor rule must consider diversity of trucking, OOIDA says

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, the Owner-Operator Independent Drivers Association told the U.S. Department of Labor.

“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’s comments to the Department of Labor on Dec. 13 were in response to the agency’s notice of proposed rulemaking aimed at determining if a worker is an employee or an independent contractor. The rule would apply to all industries, including trucking.

The proposal

The Department of Labor’s proposal published on Oct. 26 would analyze several factors and use the “totality of the circumstances” to determine if a worker is an employee or an independent contractor.

The rulemaking would rescind a prior Trump administration rule that 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 49,600 comments.

OOIDA comments

OOIDA opposes an “overly broad and unnecessarily restrictive” approach to worker classification, such as California’s Assembly Bill 5, which makes it nearly impossible for a leased-on owner-operator to be considered an independent contractor.

“The push to enact AB5 and the ABC Test in California was largely an effort to address issues in the gig economy and new work arrangements available through phone-based applications,” OOIDA wrote. “The debates on this legislation mostly ignored the long history of the owner-operator model and the benefits that truckers have enjoyed through their ability to operate as an independent contractor.”

OOIDA said it supports the Department of Labor’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. The proposal’s goal to examine the totality of the circumstances and clarifying that no one factor should receive more weight than any other can be helpful in examining the extremely diverse working arrangements in the trucking industry, but by its nature, this approach could be seen as lacking clear direction or guidance.”

OOIDA’s complete comments can be found here. LL