Under the direction of the president and his controversial Labor Department nominee, Julie Su, the Biden Administration recently published a new rule that looks eerily similar to California’s AB5 law, which effectively banned independent truckers in the so-called Golden State.
“I can think of nothing more un-American than for the government to extinguish the freedom of individuals to choose work arrangements that suit their needs and fulfill their ambitions,” American Trucking Associations (ATA) President Chris Spear reportedly stated. “More than 350,000 truckers choose to work as independent contractors because of the economic opportunity it creates and the flexibility it provides.”
The Labor Department recently published its final rule to reclassify independent contractors as employees and the guidance is set to take effect on March 11. Like the AB5 law that ended the right of truckers to work for themselves, the Labor Department has attached a 6-prong test that echoes the one used in California. These are elements of AB5 that effectively eliminated independent trucking in California.
- Is the worker free from the control and direction of the hiring entity in the performance of the work, both under the contract for the performance of the work and in fact?
- Does the worker perform work that is outside the usual course of the hiring entity’s business?
Although the California Trucking Association and the Owner-Operator Independent Drivers Association fought all the way to the U.S. Supreme Court, the state prevailed. The federal rule finalized by the Biden Administration also uses a test and similar language to re-interpret the long-standing Fair Labor Standards Act.
- The nature and degree of control by the principal (the company).
- The extent to which the services in question are an integral part of the employer’s business.
“The trucking industry has used independent contractors (ICs) since the inception of interstate trucking, and court decisions over the last 90 years have continually reaffirmed the legitimate role ICs play in the economy,” Spear reportedly stated. “It’s unfortunate that the administration has chosen to replace a clear and straightforward standard with a tangled mess that weakens our supply chain and undermines the livelihoods of hundreds of thousands of truckers across the country.”
Su, who was involved in enacting the AB5 anti-owner-operator law, went unconfirmed for 10 months by the U.S. Senate due to what some say stems from an anti-business philosophy. The ATA appears to concur with that assessment as the non-profit advocacy organization prepares to fight Su and the Biden Administration in court.
Sources:
https://www.dol.gov/agencies/whd/flsa/misclassification/rulemaking
https://www.ttnews.com/articles/independent-contractor-law
https://apnews.com/article/biden-julie-su-renominates-nomination-e2e0a2729f0f77887fad263b855470fb
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