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The Biden administration has adopted a federal rule that compels businesses to reclassify independent contractors as employees, a move that trucking industry stakeholders view as a restriction on how thousands of truck drivers make a living.
“The trucking industry has used independent contractors 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,” American Trucking Associations President Chris Spear said in a statement. “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.”
The Labor Department rule, set to take effect March 11, directs employers to consider six criteria for determining whether a worker is an employee or a contractor, without predetermining whether one outweighs the other.
Employers will be required to consider whether the jobs performed by such workers are an integral part of the employer’s business. However, the rule does not carry the same weight as laws passed by Congress or state legislatures, nor does it specify whether any specific company or industry should reclassify their workers. It offers an interpretation of who should qualify for protections under the 1938 Fair Labor Standards Act.
The criteria also include the degree of control by the employer, whether the work requires special skills, the degree of permanence of the relationship between worker and employer, and the investment a worker makes, such as car payments.
This rule denies independent contractors the freedom of choice, weakens our supply chain and undermines the livelihoods of hundreds of thousands of truckers.
It’s exactly why we opposed Julie Su’s nomination before and why we’ll continue to oppose it now. https://t.co/3PIasdJA1L
— American Trucking (@TRUCKINGdotORG) January 9, 2024
“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,” Spear added. “More than 350,000 truckers choose to work as independent contractors because of the economic opportunity it creates and the flexibility it provides, enabling them to run their own business and choose their own hours and routes. That freedom of choice has been an enormous source of empowerment for women, minorities and immigrants pursuing the American dream.”
Other groups also have opposed the new rule, saying it could threaten the flexibility of many workers who want to be contractors. The U.S. Chamber of Commerce issued a statement saying it may challenge the new rule in court.
However, acting Labor Secretary Julie Su maintains that the rule will protect workers subject to unfair treatment. “This rule will help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned,” she said.
Su has been renominated to lead the agency. Spear in his statement reiterated ATA’s long-standing opposition to her permanent appointment to the post.
“The coordinated release of this rule with the renomination of Julie Su to lead the Department of Labor is proof positive that the administration is doubling down on destructive policies that eliminate choice and opportunity for our workforce,” he said. “Had Su actually taken the time to talk to independent contractors, she’d know firsthand what a misguided rule this really is. That is exactly why we opposed her nomination before and why we will continue to oppose it now.”
Major app-based platforms have expressed confidence the new rule will not force them to reclassify their so-called gig drivers.
“This rule does not materially change the law under which we operate and won’t impact the classification of the over 1 million Americans who turn to Uber to make money flexibly,” Uber’s head of federal affairs, CR Wooters, said in a prepared statement.
Flex Association, a group that represents major app-based rideshare and delivery platforms, said it expects no immediate impact to the app-based gig economy. Still, the group said that “new guidance could generate significant uncertainty for millions of small business owners and entrepreneurs.”
“That’s why we will seek to ensure implementation of this rule does not target workers who overwhelmingly turn to app-based platforms to earn supplemental income on their own terms,” Flex Association said.
DoorDash also it was “confident that Dashers are properly classified as independent contractors” under the new guidelines. Lyft said it expects the new rule will have no immediate impact.
Spear added, “ATA will work with members of Congress and other stakeholders to defeat this ill-advised rule.”
Contributing: Associated Press
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