U.S. Department of Labor Proposes Independent Contractor Test

In the last Regulatory Roundup, ICSA Director of Operations Shawn Nelson wrote about the challenges posed by California’s Assembly Bill 5. By adopting the “ABC” test to determine employee or independent contractor status, California hoisted most owner-operators on prong “B,” which deems a worker an employee if engaged in the usual course of business of a company. For an owner-operator offering truck driving services to a motor carrier, it is difficult to distinguish the role of the owner-operator from the basic function of the fleet.

Now the U.S. Department of Labor (DOL) has weighed in on this longstanding issue. Precluded by court decisions from directly adopting the “ABC” test as a federal standard in determining employee classification, the DOL published on October 13, 2022, a Notice of Proposed Rulemaking (NPRM) in the Federal Register. If adopted, DOL would impose a six-factor test in deciding whether a worker is an employee or an independent contractor.

Those six factors, DOL says, are to be weighed equally, thereby abandoning the employee classification test used by the Trump Administration, which emphasized two “core” factors. Those “core” factors – the nature and degree of control over the work and the worker’s opportunity for profit or loss – often favored a determination that a worker was an independent contractor.

More problematically, the DOL also would consider such company standards as worker compliance with laws, rules, safety regulations and customer directions as evidence of employer “control,” contributing to a determination that a worker is an employee. Thus, a company that requires an owner-operator to follow the speed limit – as required by law – could result in the owner-operator being viewed as an employee - not a great result for a motor carrier that simply wants a safe operation. 

Comments on the Department of Labor’s NPRM were due by Nov. 28, 2022.

New Broker and Freight Forwarder Financial Rules Proposed

16 January 2023

The Federal Motor Carrier Safety Administration (FMCSA) has issued a Notice of Proposed Rulemaking (NPRM) to change the financial responsibility requirements of brokers and freight forwarders. The changes are intended to benefit motor carriers.

In the Fight Against Human Trafficking, Why Truckers?

20 December 2022

Did you know that human trafficking not only affects 50 million people globally but has been recorded in all 50 states? In the United States alone, the number of victims annually is estimated in the hundreds of thousands, with traffickers recruiting out of our schools, online, in shopping malls, as well as the streets and other locations.