Wide-reaching stakeholders filed civil lawsuits in a desperate attempt to block a Biden Administration rule that changes the way people are classified as independent contractors or employees. The U.S. Department of Labor finalized a rule that appears to mimic California’s AB5 law, which trucking industry organizations fought all the way to the U.S. Supreme Court. Despite truck transportation concerns, the rule was scheduled to hit the books on Monday, March 11, barring a last-minute injunction.
“The 2024 rule risks turning independent contractors into unwilling employees, threatening their freedom and livelihood. This one-size-fits-all approach undermines the essence of entrepreneurship opportunity,” special counsel at the Pelican Institute’s Center for Justice James Baehr reportedly said.
The Washington Post reports that companies ranging from DoorDash to janitorial service providers have jumped into a legal battle to prevent what happened in California. That’s where owner-operators and other independent truckers lost their ability to work for themselves. The Golden State’s AB5 law effectively banned independent trucking.
The government’s stance in both instances is that it is focused on preventing the misclassification of workers who would not ordinarily qualify as independent contractors or “gig workers.” Lawsuits aimed at stopping the new rule have indicated it would cause “irreparably harm not just companies employing independent contractors nationwide, but the workers themselves.” The organizations opposing the new rule include the following.
- Coalition for Workforce Innovation
- Uber and Lyft
- U.S. Chamber of Commerce
- National Retail Federation
- National Federation of Independent Businesses
- American Trucking Associations
- Louisiana Motor Transport Association (LMTA)
“Independent contractors are an integral part of the transportation industry, specifically trucking. Without independent contractors hauling products across the United States, it would completely break an already fragile supply chain,” LMTA executive director Renee Amar reportedly said. “We sincerely hope that the courts hear our case and understand that this is a complete overreach of the federal government. The relationship that trucking companies have with independent contractors is a trusted model that protects everyone.”
At the federal level, Representative Kevin Kiley and Senator Bill Cassidy recently introduced a Congressional Review Act resolution designed to reverse the Department of Labor’s employee classification measure. Like the lawsuits aimed at preventing gig workers and independent truck drivers from being forced to become company employees, the resolution is also something of a Hail Mary. Pres, Biden would have veto authority if it somehow manages to pass both houses of Congress.
Sources:
https://www.ttnews.com/articles/louisiana-sue-contractor
https://www.washingtonpost.com/business/2024/03/05/gig-workers-pay-rules-lawsuit/
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