Dive Brief:
The U.S. Department of Labor plans to eliminate a 2024 rule concerning independent contractors that replaced a previous 2021 regulation focused on employee classification, as outlined in a regulatory agenda. The 2021 and 2024 rules differ in the criteria employers use for determining employment status: the former applied a weighted consideration of two factors related to a worker’s control and profit-loss opportunities, while the latter adopted an overall circumstances evaluation.
A proposed rulemaking notice is expected this month, with trucking organizations already expressing their support for this change. The American Trucking Associations and the Owner-Operator Independent Drivers Association have commended the administration’s initiative to safeguard independent contractors; however, OOIDA has cautioned that this change should not facilitate the implementation of speed limiters.
Dive Insight:
The classification of independent contractors is critical for trucking organizations that aim to preserve the owner-operator model. These standards also influence whether a worker qualifies as an employee entitled to overtime pay and other business obligations.
Various trucking associations previously litigated against the DOL to prevent the 2024 rule from being enacted, asserting that it negatively affected owner-operator agreements. Amid an ongoing lawsuit with the ATA and other business entities, the DOL indicated it would stop enforcing the 2024 rule, as noted by the U.S. Chamber of Commerce in April.
Numerous companies have contended that the Biden administration’s regulation is less favorable to businesses than the earlier standards set during the Trump administration. The ATA stated recently that the enforcement of the 2024 rule would have “eliminated choice” and diminished the autonomy of independent contractors regarding their business operations, scheduling, and routing.
On the other hand, OOIDA reported no significant disruptions from the 2024 rule and does not anticipate any issues arising from the upcoming changes, as indicated by a spokesperson. Furthermore, while the 2021 rule enabled employers to require speed limiters for independent contractors, the 2024 rule did not provide clear instances regarding this requirement.
OOIDA has emphasized that any forthcoming rulemaking should not permit employers to mandate speed limiters. OOIDA President Todd Spencer remarked, “We support the Trump Administration’s objective of safeguarding independent contractors, but we urge rejection of the American Trucking Associations’ indirect push for dangerous speed limiter devices for truckers.”
The two organizations have disagreed over the potential speed limiter mandate, yet this year, the Transportation Department has shifted its stance away from enforcing such a requirement.
