Industry weighs impact of proposed independent contractor rule

Business weighs impression of proposed impartial contractor rule

Stakeholders have 45 days to touch upon a Biden administration impartial contractor rule that would probably reclassify tens of millions of employees as workers. The rule was revealed within the Federal Register Thursday, with the remark interval extending by way of Monday, November 28.

The proposed rule, introduced earlier this week, may have an effect on employees in a variety of industries, together with trucking, which depends closely on impartial contractors. Business specialists say the transfer represents a step away from the impartial contractor mannequin and that employers ought to pay shut consideration to how the problem might have an effect on their enterprise.

“I believe [the proposed rule] is designed to lean towards eliminating impartial contractor companies below what [the current administration] considers to be the extra noble objective of making a protecting employment atmosphere,” stated Greg Feary, president and managing associate at regulation agency Scopelitis, Gargin, Gentle, Hanson & Feary, a nationwide observe centered on the transportation business.

The DOL’s proposal would rescind the 2021 Unbiased Contractor Rule, a Trump-era coverage that’s considered as favorable to classifying employees as impartial contractors. The proposal would exchange that rule with one that’s considered as extra more likely to classify employees as workers, based on Feary and others. The present coverage makes use of a five-factor check for employers to find out whether or not a employee must be labeled as an worker or an impartial contractor, with two components receiving larger weight: the character and diploma of the employee’s management over the work, and the employee’s alternative for revenue or loss primarily based on private initiative or funding. The brand new rule proposes a six-pronged check with components weighed equally, primarily loosening classification pointers and favoring worker standing, specialists say.

Business teams such because the American Trucking Associations (ATA), the nationwide commerce group representing the trucking business, and the Proprietor-Operator Unbiased Drivers Affiliation (OOIDA), which represents small companies {and professional} truck drivers, are nonetheless reviewing the 184-page proposal, however expressed issues this week over the federal government’s efforts to undo the prevailing rule.

“ATA is reviewing the brand new proposed rule and appears ahead to offering suggestions to the Division, however we’re disenchanted this proposal seeks to undo the present rule which has introduced wanted readability to the problem of impartial contractor standing,” ATA Vice President of Workforce Coverage Nick Geale stated in an announcement.

“We’re simply starting to evaluate this proposal, however any rule should acknowledge the owner-operator mannequin whether it is to achieve success when utilized to trucking,” added OOIDA President Todd Spencer, in a separate assertion. “The administration’s acknowledged want to formulate a check that considers all points of a working relationship is promising, however we are going to fastidiously evaluate each element of their proposal and combat again in opposition to any provision that will unfairly stack the deck in opposition to true impartial contractors.”

The Nationwide Retail Federation (NRF) weighed in earlier this week as effectively, calling the proposal unwarranted, pointless, and more likely to trigger confusion and spur litigation.

Feary echoed these issues and stated he expects the problem to linger into 2023.

“I wouldn’t count on an precise rule till late spring, early summer season of subsequent yr, [and we] may even see litigation over this,” he stated. “I believe you’re not going to see something aside from some authorized machinations by way of the tip of this yr and early subsequent yr, after which most likely begin to see the manifestation of this rule.”

Timing and the political panorama will doubtless play a task as effectively.

“If this hits in June of 2023 … and if the US DOL enforcement physique is skilled on it and able to implement it by the tip of 2023, now you’re into 2024 and you could have a brand new administration,” Feary defined. “Due to the politics of it, it’s exhausting to foretell the long-term ramifications.”

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