Congress Prepares to Pass Bill Trucking Groups Warn Will Wipe Out Independent Contractors

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EXCLUSIVE: Bill Trucking Groups Warn Will Wipe Out Owner-Operators Expected to Pass House Next Week

Washington D.C. – Democrats in the United States Congress have re-introduced legislation that trucking industry stakeholders fear will wipe out trucking’s independent contractor model on a national scale.

Last week, the Protecting the Right to Organize (PRO) Act of 2021 was re-introduced into both the U.S. House of Representatives and the Senate.




 

The PRO Act includes language similar to California’s controversial Assembly Bill 5 (AB5), which imposes an “ABC test” to determine the status of an independent contractor.

Specifically, the legislation, if passed, would amend the National Labor Relations Act (NLRA) to clarify that an individual performing any service is an “employee” and not an “independent contractor” unless:

(A) the individual is free from the employer’s control in connection with the performance of the service, both under the contract for the performance of service and in fact;

(B) the service is performed outside the usual course of the business of the employer; and

(C) the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.




 

At issue, just as in AB5, is the so-called “B prong,” which classifies a worker as an “employee” of the company unless that worker performs a service “outside the usual course of the business of the employer.”

Trucking industry stakeholders fear enforcement of such a statute would all but eliminate the owner operator model across the nation.

The California Trucking Association (CTA) remains embroiled in a legal challenge of AB5 in California, arguing the 1994 Federal Aviation Administration Authorization Act (F4A) blocks states from enacting such laws, and thus, allows interstate trucking companies an exemption from AB5’s statutes.

 

However, a nationalization of AB5, such as the PRO Act, would result in an unprecedented battle for the survival of trucking’s longstanding independent contractor model.

In addition to the ABC test provisions, the PRO Act also amends the NLRA and related labor laws to extend a host of protective measures to union workers and incentivize unionization.

WHAT TO EXPECT: Will The PRO Act Become Law?

In February of last year, the Democratically-controlled House passed the PRO Act along party lines in a vote of 224 to 194.

The bill stalled in the Senate as Republicans were in control, but that has changed.

 

In January of this year, Transportation Nation Network (TNN) reported Democrats were expected to quickly re-introduce the measure in 2021.

This time around the legislation has nearly 200 sponsors and co-sponsors in the House and 41 in the Senate.

In fact, Senate Majority Leader Chuck Schumer (D-NY) is a sponsor and Speaker of the House Nancy Pelosi (D-CA) is a co-sponsor.

Multiple trusted sources on Capitol Hill who are tracking this issue closely told TNN last month that Democrats likely already have the votes to pass the bill in both chambers and President Joe Biden would likely sign it into law.




 

Moreover, President Biden has already signaled his support.

One of his first acts once he was sworn into office on January 20 was to immediately issue an executive order halting the Trump Administration’s Department of Labor (DOL) rulemaking seeking to clarify the definition of an independent contractor.


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The DOL’s final rule requires an “economic reality” test for employees and contractors in order to determine a worker’s status under the Fair Labor Standards Act (FLSA).

The rule was widely viewed as a welcomed development on this issue within the trucking business community.

Expect trucking’s most powerful groups such as the American Trucking Associations, Truckload Carriers Association (TCA), and the Owner Operator Independent Driver’s Association to fiercely lobby Congress not to pass the PRO Act.




 

Dave Heller, TCA’s vice president of government affairs, recently told TNN that stakeholders are quite concerned about this issue.

“The owner operator model is a tried and true business model in the trucking industry,” Heller commented. “It makes sense to continue to support it. Why would we jeopardize the American dream?”

Click HERE to read the entire bill.

Stay logged on to TransportationNation.com as we will have more analysis and industry reaction in the coming days.

 


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Comment (2)

  1. This article mentions the “stakeholders.” Who do we mean? Landstar? TII? Universal? Werner? Trucking group stakeholders are controlled by the trucking groups with money. That would not include the independent owner-operator.

    “If we are so essential, why are we so poorly paid?” Let’s discuss what transport executives think of the 1099 Owner-operator model. Too many executives, the 1099 O/O model is legal license to steal … escrow accounts and agent commission. The 1099 O/O model keeps most players too weak and malnourished to fight high-priced lawyers and lobbyists with access to lawmakers. The best example of this situation is the Southern California harbor drivers.

    It is the duty of transportation and logistics executives to represent themselves and their companies interests to the shipper marketplace in a sustainable fashion. If the executives won’t put into play a sustainable model, or if they
    continue to work slavishly for the likes of Walmart and Amazon, only to let dirt roll downhill, they are doing no favors for their employees or vendors. I guarantee you, shippers LOVE the sacrifice we transport people are making in
    service to their profits! I give you as an example: Nike Inc. I wear a size 9.5 Nike which costs $ 85.00 at Dick’s Sports World.

    NIKE, Inc. online store offers “Free standard shipping and -30-day free returns, only with NikePlus. Standard / Arrives 2-4 Business Days.” Given your average NIKE, Inc. pair of shoes weighs approximately 3.0 pounds in a box
    11.5 x 7.0 x 3.75 (l x w x h). That’s 309 cu inches. In a 40 foot container, you can fit 10,000 shoe boxes on board. At $ 85.00 per pair of shoes, this container is worth $ 850,000.00 on the retail level. This container is being
    shipped across 12 time zones.

    IF the average LAX/LB port truck driver on an owner operator contract makes $ 200.00 per pull between Long Beach and a warehouse in Commerce, that’s being generous. The distance between Long Beach ICTF and Commerce CA is 17 miles.
    Considering congestion and LA freeway traffic jams, a port driver can make one turn between pier and warehouse 2 hours IF the day is being good to the driver. A port driver might get three turns daily in this fashion if nothing goes
    wrong. The port driver’s economic role in this $ 85.00 retail transaction is 0.00023529 per cent of the entire container transaction. Rather than fight for better pay from the shipping industry, trucking executives would rather eat the
    owner-operators alive. This is highly unstable.

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