OOIDA speaks out for truckers at Department of Labor forum

June 30, 2022

Mark Schremmer

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As part of a U.S. Department of Labor public forum on worker classification rules, the Owner-Operator Independent Drivers Association served as a voice for truck drivers.

The Department of Labor held the second of two public forums on Wednesday, June 29. The forums are intended to help the department establish definitions of “employee” and “independent contractor” under the Fair Labor Standards Act.

OOIDA believes any worker classification laws should be nuanced, noting that many of its more than 150,000 members operate as true independent contractors under lease agreements.

“There are federal regulations that dictate specific requirements for these leases, and they were put in place to protect owner-operators from abusive practices by carriers,” said Bryce Mongeon, OOIDA’s director of legislative affairs. “Tens of thousands of truckers currently operate as true independent contractors through lease agreements.

“It is absolutely necessary that any classification rule preserves the right of these truckers to continue utilizing this business model.”

OOIDA opposes the ABC Test, which aims to help workers misclassified as independent contractors but also would make it difficult for true independent contractors to remain in that capacity.

The Labor Department published a final rule regarding worker classification in January 2021, but the new administration decided to withdraw the rule in May 2021. This past March, a U.S. district court invalidated the decision to withdraw, meaning the January 2021 rule remains in effect.

Mongeon said the January 2021 rule is a move in the right direction.

“While it is difficult for any rule to account for every situation or completely clarify the classification issue, we believe the rule finalized in 2021 will provide some new level of certainty for truckers,” he said. “We also believe the final rule offers a classification test that appropriately works within the existing criteria used for FLSA classification.”

If changes are made, OOIDA said the focus should be on predatory lease-purchase arrangements.

“We request that the department does not repeal the 2021 rule, but if it is looking to make changes, there are opportunities to improve the rule to address misclassification in trucking,” Mongeon said. “Specifically, it should start with clear-cut cases, such as lease-purchase or lease-to-own agreements.”

In these deals, Mongeon said the carrier has all of the power and that drivers work for the carrier while paying for all of the expenses of the truck.

“Under these schemes, drivers are paid pennies on the dollar, will likely never own the truck, and have zero independence,” he said. “We think the department could make meaningful progress on misclassification if it focused on clearly identifiable cases and closely considers the nuances of trucking.”

Worker classification has been a hot topic in recent years as the gig industry has grown and stories about port truck drivers taking home as little as 67 cents in a week have emerged.

But while some have used these examples to push for more stringent classification laws, many freelance writers and owner-operator truck drivers have asked to not be classified as an employee.

The Jan. 29 public forum included comments from dozens of freelance writers opposed to any new worker classification rules that would alter their current working arrangement.

“Nothing would ever convince me to take a regular W-2 again,” said Diane Byrne, a freelance journalist. “I’m on pace to earn 20% more this year. No corporation gives you that kind of raise.”

Meanwhile, workers for such rideshare apps as Uber and Lyft, said they were misclassified.

“I have a boss, and the boss is the algorithm,” said Nicole Moore, a rideshare driver.

She said she had been a true independent contractor in the past and that her current job wasn’t as an independent contractor.

“We are suffering from misclassification,” she said.

The Department of Labor announced earlier this month that it plans to start a rulemaking regarding worker classification.

AB5

Although not directly related to the U.S. Department of Labor’s efforts toward a worker classification rule, there was a recent development in employment laws and the trucking industry.

One day after the public forum, the U.S. Supreme Court denied the California Trucking Association’s petition for the state’s Assembly Bill 5.

AB5, which codified the ABC Test in the state, will now be enforced on motor carriers.

The California Trucking Association contends that AB5 violates the constitution and could force the end of the trucking industry’s owner-operator model.  LL