Dive Brief:
- The U.S. Department of Labor seeks to rescind a 2024 independent contractor rule that replaced a 2021 standard regarding whether someone is an employee or not, according to a regulatory agenda.
- The 2021 and 2024 rules differ over which principles that employers must consider in an economic realities test. The earlier rule gave a weighted factor approach to two criteria over a worker’s control and profit-loss opportunity, whereas the latter used a totality-of-the-circumstances analysis.
- A notice of proposed rulemaking is slated to come this month, and trucking groups already showed support for the change. The American Trucking Associations and Owner-Operator Independent Drivers Association praised the administration's efforts to protect independent contractors, but OOIDA warned that the change should not allow speed limiters.
Dive Insight:
The independent contractor classification matters for trucking groups, who wish to protect the owner-operator model. The standards also have implications for whether a worker is considered an employee who must be paid overtime, among other requirements that businesses must meet.
Several trucking groups previously sued the DOL over the 2024 rule, seeking to stop it from taking effect and arguing that it impacted owner-operator arrangements.
Amid one lawsuit involving the ATA and other business groups, the DOL announced that it would no longer enforce the 2024 rule, the U.S. Chamber of Commerce noted in April.
Multiple firms also argued the Biden administration rule was less business friendly than the standard from the first Trump administration. The ATA said last week that enforcing the 2024 rule would have “wiped out choice” and ripped away the freedom of independent contractors’ ability to run their own business, set their own hours and chart their own routes.
OOIDA, however, saw no disruption from the 2024 rule and doesn’t expect any to occur with the new change, a spokesperson said.
Additionally, the 2021 rule allowed employers to mandate the use of speed limiters with independent contractors, but the 2024 provided no concrete examples on the matter.
OOIDA cautioned that any new rulemaking should not allow employers to require the use of speed limiters, a spokesperson said.
“We support the Trump Administration’s goal of protecting independent contractors provided they reject the American Trucking Associations’ backdoor attempt to mandate dangerous speed limiter devices on truckers,” OOIDA President Todd Spencer said in a statement.
The two groups have clashed over a potential speed limiter requirement, but the Transportation Department this year moved away from considering a mandate of the devices.
