A new federal rule clarifying who is an independent contractor and who is an employee is on its way. While truck drivers are mostly supportive of the proposed rule, they want the Department of Labor to make some necessary tweaks to ensure motor carriers do not misclassify drivers.
In February, the DOL published a proposed rule that defines how employers can determine whether a worker is an employee or an independent contractor. For the most part, the new rule revives one put in place during President Donald Trump’s first term.
For truck drivers, the question is, “Does the latest worker classification rule change my situation?” The short answer: Probably not, but it could.
To get “probably not” changed to “definitely not,” the Owner-Operator Independent Drivers Association submitted comments to the DOL. While the Association is generally supportive of the rule, it made several suggestions to ensure that independent contractors in trucking can continue operating their businesses without being micromanaged by others.
Worker classification whiplash
Before 2021, there were no set federal rules clarifying worker classification. Since then, there have been three, with the two most recent undoing the previous administration’s rule.
Until five years ago, worker classification was defined using federal agency guidance and case law. In 2021, the Trump administration published a final rule clarifying who is considered an independent contractor. That rule looked at five factors:
- Nature and degree of control
- Opportunity for profit or loss based on initiative, investment or both
- Skill required for the work
- Permanence of the work relationship
- Whether the work is part of an integrated unit of production
If the first two “core factors” clearly tilted in favor of an independent contractor, then the determination was made, no further questions. If the core factors were more ambiguous, the remaining three factors would guide the employment status decision.
While the rule itself did not change much for independent contractor truck drivers, agency guidance threw a wrench in the gears. Specifically, the DOL said that requiring owner-operators to use a speed limiter would “comply with specific legal obligations and to ensure safety.” Consequently, a speed limiter requirement would not be considered “control” over a driver.
That issue ended up being moot as the DOL under President Joe Biden threw out the rule and created its own. That rule was mostly the same. Instead of using core factors, the 2024 rule looked at the totality of the factors.
The latest rule currently in the works, reverts back to the 2021 language, minus the one problematic guidance that was issued.
Speed limiter requirement loophole
While mostly supportive of the new rule, OOIDA wants the DOL to clarify certain provisions that could be exploited.
One important change to the 2026 rule is an amendment to the speed limiter guidance. Under the new rule, DOL removed that language and replaced speed limiters with drug and alcohol testing when explaining that requirements that deal with complying with laws and regulations do not constitute control over an independent contractor.
“With the Department’s stated intent to largely reissue this 2021 rule, we applaud the decision to amend the speed limiter example to make clear that there is no legal obligation for a trucker or motor carrier to use these devices,” OOIDA states in its comments.
However, the new rule still leaves the door open for “safety” requirements, which could include speed limiters, inward and outward-facing dash cams, onboard safety monitoring systems that analyze sensor and engine data, speed limiters and monthly safety meeting and quarterly reviews.
Proposed language exempts factors “requiring the individual to … satisfy health and safety standards.”
“We believe the Department significantly erred in this analysis as there are no specific legal obligations to meet these standards or utilize this equipment, and many owner-operators would say these requirements detract from their core business operations, and possibly their driving tasks, making them less safe,” OOIDA said. “Instead, these requirements reflect the hiring carrier’s preference of how they choose to comply with more general requirements.”
Although the American Trucking Associations appears to be mostly supportive of the new rule, it suggested in comments that the DOL not consider requirements that go beyond legal mandates to be an element of control. That would include speed limiters and cameras.
“We suggest that the Department add additional explanatory text dealing with safety provisions in contracts that are not strictly required by law, as there is a strong public policy interest in allowing such provisions without destroying the (independent contractor) relationship,” ATA said.
Lease-purchase agreement ≠ independent contractor
Another part of the worker classification rule that OOIDA found problematic deals with the profit or loss factor.
osed rule, the DOL states that a driver having the opportunity for profit or loss based on either managerial skill or management of an investment weighs in favor of being an independent contractor.
The issue at hand here is how that can be applied to lease-purchase agreements. A driver is making an “investment” in such an agreement, but that type of investment does not necessarily indicate that someone is in business for themselves.
OOIDA is asking the DOL to provide an example in the rule that shows lease-purchase agreements are not the type of investments mentioned. The Association also asks for broader clarification.
“To provide clarity on this point, we urge the Department to separate the concepts of ‘investment’ and ‘management,’ or at the very least, make clear that an individual’s investment in tools or equipment alone is not enough to indicate independent contractor status,” OOIDA states. “There must be some exercise of control, management, or skill involving this investment for the factor to point toward independent contractor.”
What’s next?
Now that the comment period is over, a final rule is next.
Nearly 17,000 comments were submitted to the docket, with mixed reviews from industry groups, governments and individuals.
From here, the DOL will review the comments and make any changes to the rule it deems appropriate. For example, the DOL could include the clarifications OOIDA asked for after considering the Association’s comments. Conversely, the department could favor ATA’s comments, leaving the door open for carriers to mandate speed limiters on independent contractors’ trucks.
There is no expected date for the final rule. LL
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