Effective May 6, the U.S. Department of Labor has withdrawn the Independent Contractor Rule.
When the DOL initially published the rule in the Federal Register Jan. 7, 2021 during the final days of Donald Trump’s presidency the agency noted that it was “revising its interpretation of independent contractor status under the Fair Labor Standards Act to promote certainty” for stakeholders, including the trucking industry, as well as in an effort to reduce litigation and “encourage innovation in the economy.”
The Jan. 7 rule sought to define the difference between an employee and an independent contractor, noting, “The ultimate inquiry is whether, as a matter of economic reality, the worker is dependent on a particular individual, business, or organization for work (and is thus an employee) or is in business for him- or herself (and is thus an independent contractor).”
The Owner-Operator Independent Drivers Association, along with a coalition of more than 60 organizations, representing the trucking, agriculture, construction, manufacturing, materials and towing industries, sent letters to members of the U.S. House of Representatives Blue Dog Coalition and Problem Solvers Caucus. The coalition implored them to reject any unnecessary, harmful and contentious proposal to increase motor carriers’ minimum liability insurance requirements.
The letters are in response to efforts by trial lawyers and their supporters in Congress to increase insurance requirements for businesses engaged in the interstate transportation of property via truck from $1.25 million to as much as $4 million.
The coalition explains, “An increase in insurance requirements is wholly unnecessary, would do nothing to improve highway safety and would have a severe negative impact on our members by significantly increasing their operational costs.”
May 7, 2021 It’s not a good vibe right now, said Raman Dhillon, CEO of the California-headquartered North American Punjabi Trucking Association. He was talking about his group s membership s response to the news last week that a three-judge panel of the Ninth Circuit Court of Appeals had struck down a lower court s injunction against application of California s A.B. 5 contractor law and its ABC test s application to trucking.
The original suit that was ruled on had been brought by the California Trucking Association, who told
Overdrive it is planning to request what s known as an en banc review, a reconsideration from the entire panel of judges in the Ninth Circuit. As previously reported, from the April 28 ruling on the injunction, CTA has 14 days to seek rehearing. If that request is denied or if the rehearing fails to change the view of the court, it will be a mere seven days from the denial or failure before the injunction lifts.
DOL’s independent contractor rule withdrawn
The Department of Labor is officially withdrawing a late-Trump-era rulemaking that would have clarified the definition within the Fair Labor Standards Act. Because the rule never took effect, owner-operators will so no changes as a result of the rule s withdrawal.
DOL published the final rule on Jan. 7, shortly before the end of Trump’s presidency. Just days prior to the rule’s publication, the incoming Biden administration specifically mentioned the independent contractor rule as one of Trump’s “midnight regulations” that would be halted.
The independent contractor rule would have used five economic-reality factors to help businesses determine whether a worker is an employee or an independent contractor. Two of those factors – the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss – were the two “core” factors for determining a worker’s classific
Labor Department Drops Independent Contractor Rule 1933bkk/Getty Images
The U.S. Department of Labor has announced the withdrawal of a federal regulation for classification of independent contractors that the agency earlier said would “promote certainty” for the trucking industry’s use of contractors, but which it now maintains would introduce “substantial confusion and uncertainty on the topic.”
“Upon further reflection, including consideration of relevant [public] comments, the department does not believe that the independent contractor rule would have achieved the added clarity it intended to provide to the regulated community,” the May 5 withdrawal announcement said. “Businesses operating nationwide would have had to familiarize themselves with multiple standards for determining who is an employee under the Fair Labor Standards Act across different jurisdictions.”