Monday, June 17, 2024

New trucking trade group has 1 focus: DOL’s independent contractor rule

There’s a new trucking-focused trade group in Washington and it is interested in one issue: independent contractor status.

The group is called Truckers Integral to our Economy (TIE) and its executive director is Scott Brenner, who is also an executive director at Crossroads Strategies, a Washington-area lobbying firm. Brenner told FreightWaves he worked in Congress for about 10 years on the Ways and Means and Transportation committees and also spent time at the Department of Transportation before joining Crossroads. 

While the question of independent contractor status has played out heavily on the state level, with California’s AB5 the biggest battleground, Brenner said TIE would not focus on state issues. Rather, the entire concern at TIE is the Department of Labor’s proposed definition of independent contractor status to be used by the Wage and Hour Division when it has an employee versus employer dispute brought before it. 

The current rule on the books for the Wage and Hour Division is a Trump administration creation that was formally introduced in the waning days of that administration. It is viewed as more favorable to the idea of a worker being classified as an independent contractor. 

It is generally agreed on in the trucking sector that the proposed law is a problem for independent owner-operators. While it does not contain anything as prohibitive as the ABC test, there are provisions in it that while not on the surface pose an obvious problem for owner-operators could be interpreted as such in an action before the Wage and Hour Division

“We’re really trying to educate Republicans and Democrats about the importance of the IC issue and what it means to their districts,” Brenner said, noting that TIE recently held an event with members of Congress or their staff personnel “and these guys’ eyes got really big when we talked about the implications.”

Brenner referred several times to the PRO Act, which deals with the IC status through its inclusion of the ABC test. That test is at the core of AB5, and its B prong poses particular problems for trucking. The B prong says a worker can be considered an independent contractor if he or she “performs work that is outside the usual course of the hiring entity’s business.” A trucking company hiring an independent owner-operator to move freight runs a strong risk of being in conflict with the B prong.

The PRO Act passed a Democrat-led House two years ago but advanced no further in a tightly divided Senate. With the GOP now controlling the House, prospects for the PRO Act have not improved.

Brenner conceded the PRO Act’s chances for passage anytime soon are slim but said efforts to educate Congress on independent contractor status need to continue anyway. 

“We have the two branches of government, so the DOL is going to continue down their path,” Brenner said. “We’re looking at what we can do to delay the implementation of the rulemaking.” 

Finding a way to have Congress defund or delay implementation of the DOL IC rule is one goal of TIE. Brenner said the message the group is sending is “if you agree then you need to help us stop the DOL rule from going forward.” 

Comments on the proposed DOL rule closed at the end of December with more than 55,000 received. Brenner said he believes the DOL will roll out the formal rule in “early summer.”

If you want to read all the comments submitted to the Wage and Hour division of the Department of Labor on the proposed Independent Contractor rule, better set aside some time. The final count on the number of comments came in at 55,220. #AB5 #DOLRule

— John Kingston (@JohnHKingston) January 4, 2023

Stopping the DOL rule from implementation can occur “with the tools they currently have,” Brenner said, adding that he was unsure how legal cases would play out if funding for implementing the law is blocked even if the law is on the books.

Adding to the list of trucking associations based in the Washington area is not a problem, Brenner said. “We want everybody to come together on this. We’re all basically taking the same message to Capitol Hill with a few different tweaks on it.”

Much of the impetus for TIE came from John Kellenberger, who is a vice president at US 1 Industries. US 1 is a non-asset-based 3PL that also provides a wide range of services to transportation companies beyond just brokerage.

Kellenberger said the idea behind TIE was that while groups like the American Trucking Associations do work on the IC issue, “we wanted an initiative only focused on the independent operator” and what the IC rule might mean for them.

TIE began with six member companies, Kellenberger said, but “we just got started and there is a push to get additional membership into the group.”

He did not foreclose the idea of TIE getting involved in IC issues on the state level. “We will focus on state issues where we can get some involvement, but our goal is to get involved in the fights where we can make a difference.” 

For now, that’s on the federal level, Kellenberger said. 

The current rule from the Trump administration was yanked before it was implemented. But a court ordered it reinstated while the current administration worked on a new one. 

The current nominee to head the Department of Labor, Julie Su, has been criticized by the ATA over her views on IC status and AB5, with the DOL IC rule brought into the criticism. 

More articles by John Kingston

DSC chat: Wrestling with proposed DOL rule on independent contractors

Labor secretary statement on independent contractors a preview of policy shifts

Court revives Uber/Postmates fight against AB5 for app-based drivers

The post New trucking trade group has 1 focus: DOL’s independent contractor rule appeared first on FreightWaves.

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