MY Truck – MY Choice
There is a battle going on over the right to choose how and when you drive and how hard you work. In question is the status of the Independent Contractor relative to the Company Driver. The U.S. Department of Labor is considering reclassifying Independent Contractors as Company employees. The State of California has already done this, passing Bill AB5, forcing Independent Contractors to obtain their own authority in order to continue their independent operation or work as a company driver. The bill has already caused thousands of Owner-Operators to leave the state of California and now it appears as though the Federal Government is coming for the rest of the Independent Contractor community as well.
While the motives for this change are unclear, the results are painfully obvious – with 1 in every 7 trucks on the road belonging to an Independent Contractor, and by estimates about 600,000 total ICs, eliminating the Independent Contractor model would devastate the trucking industry.
There are many large, medium, and small fleets built on the Independent Contractor model that use Owner-Operators exclusively to move their freight. Other fleets, such as PGT Trucking, Inc. of Aliquippa, Pennsylvania, utilize Independent Contractors in a significant portion of their fleet. Intermodal relies almost 100% on Independent Contractors.
So what happens to the Owner-Operator if this change is instituted? You will have two choices – sell your truck and go to work as a Company Driver or get your own authority so you can still work for yourself. And in typical government fashion, uninformed lawmakers will try to legislate an industry that they don’t fully understand. With 72% of all U.S. freight tonnage moved by truck and 99.7% of U.S. companies relying on fewer than 100 trucks to facilitate shipments, the immediate effect and transition of such legislation will be devastating not only to Independent Contractors, but also to Trucking Companies and the consumer as well. Additionally, with tens of thousands of used trucks suddenly saturating the market, it will create a glut of equipment that will disrupt the truck market and drive used truck values down.
On July 10, 2024, the Department of Labor’s “Final Rule” interprets what constitutes an Independent Contractor under the Fair Labor Standards Act (FLSA):
•The worker's opportunity for profit or loss
•Investment by both parties
•The work relationship permanency
•The nature and degree of control over the work
•Whether the work is an integral part of the employer’s business
•The worker’s skill and initiative
Independent Contractors who perform substantially all of their work for one business are likely to be misclassified as employees. The regulatory caveat is that Independent Contractors must move the freight either under the carrier’s authority or their own authority. When they are comfortable leasing to a specific carrier, it just makes sense for them to haul for that company exclusively.
The battle is being fought in Washington, DC and what must be done is to educate lawmakers of the folly of changing the Independent Contractor model before it is time to vote. With hundreds of issues coming at them all the time, it is very easy for lawmakers to be un-informed or distracted.
Fortunately there is an organization that is already working on the problem. A new trucking focused trade group called TIE or Truckers Integral to Our Economy has been building awareness of the dangers of changing the Independent Contractor model with legislators. Truckers Integral to Our Economy is a new organization made up of a coalition of concerned Trucking Companies and Independent Contractors with one express purpose – preserving the Independent Contractor business model. The organization has already met with members of Congress, but there is still much work to be done. If you would like to lend a hand, TIE is looking for Independent Contractors and Carriers willing to share their story with members of Congress. To learn more, visit www.truckerschoice.org, email [email protected] or call 202-222-8825.
Caption:
Scott Brenner, TIE
Mike Joyce, TIE
Anne Reinke, TIA
Rob Cannizzaro, IANA
Jack Ciattarelli, Jack 4 NJ