Federal, state governments review owner-operator status
Federal and state entities increasingly are questioning if owner-operators should be regarded as employees for tax purposes and reviewing legislation to restrict their classification as independent contractors.
This year, federal and state governments have introduced bills to require port drivers be categorized as company employees and expanded programs cracking down on misclassifying employees as independent contractors. Labor unions support this legislation and in recent years, owner-operators have filed lawsuits to force companies to treat them as employees, with mixed results.
In January, New York’s assembly exceeded the legislative efforts of other states when it referred companion bills to committees that effectively would end independent contractor classification for owner-operators. The bills, A8997 and S6267, would prohibit leasing an owner-operator if their work would represent the same service as what the company performs, according to Owner-Operator Independent Drivers Association and American Trucking Associations, which oppose the measures.
Washington state and New Jersey are considering legislation to require port drivers be employees, not owner-operators.
On Feb. 24, Washington legislators sent HB 2395 to the rules committee to consider a second reading after it cleared previous committees. The bill has 30 co-sponsors while its companion bill, SB6461, went to committee Jan. 24 with six co-sponsors.
New Jersey’s Truck Operator Independent Contractor Act, or S1470, was referred to committee Feb. 6, while its duplicate legislation, A1578 went to committee with five co-sponsors Jan 10.
Classification has remained a hot issue in California, where the assembly moved a similar bill, AB 950, to inactive status last month.
In October, California Gov. Jerry Brown signed SB 459, which penalizes employers who willfully misclassify workers as independent contractors. As the immediate past state attorney general, Brown pursued judgments over misclassification in a handful of industries, including trucking.
For the third consecutive year, Congress is considering banning owner-operators in ports with the Clean Ports Act. H.R. 572 was referred to committee with 58 co-sponsors Feb. 10, while its companion bill, S.2011, went to committee last month with five co-sponsors.
The act also was added to the five-year funding bill for surface transportation, but the House Transportation and Infrastructure Committee did not include the amendment when it passed the legislation Feb. 3.
Congress also is considering the Employee Misclassification Prevention Act, which was referred to committee with 31 co-sponsors in November. HB 3178 does not target a specific industry but aims to decrease misclassification through increased record keeping and penalties.
On Feb. 23, Louisiana became the 13th state to sign a memorandum of understanding with the U.S. Department of Labor to detect and remedy employee misclassification.