While there are plenty of opinions among those in trucking as to what makes an owner-operator truly an "independent contractor," it's easy to forget that new United States Department of Labor guidance on worker classification applies quite narrowly.
Attorney Greg Feary, president and managing partner of transportation law firm Scopelitis, believes the new six-factor classification test to be more employee-leaning than independent contractor-leaning, though application will ultimately come down to the case-by-case basis that Owner-Operator Independent Drivers Association President Todd Spencer urged in the first part of this Overdrive examination of the new rule.
Feary pointed out that the majority of decisions in the United States for decades have deemed leased owner-operators as independent contractors. And keep in mind that the DOL rule is only relevant to classification for purposes of the Fair Labor Standards Act's requirements for employers. Cases where the soon-to-be-codified six-factor test applies will be wage and hour (minimum wage and overtime) disputes. The IRS has its own multi-factor balancing test when it comes to taxes, the National Labor Relations Board another test applied when questions related to collective bargaining and working conditions are in play.
“Under the two areas of law that FLSA governs, one isn’t relevant” to trucking, Feary said, given the long-in-place overtime exemption, “and the other in the matter of trucking reality is not a problem. Most contractors in heavy trucking get paid far above minimum wage.”
Attorney Paul Cullen Jr., in a recent meeting of FMCSA’s Truck Leasing Task Force, echoed Feary’s assessment about the rule’s applicability to trucking.
“With regard to the Department of Labor rule, it's complicated not just because the test is multi-capacity and requires a judgment call in consideration of the various factors," he said. "But that test that they created is for enforcement of the Fair Labor Standards Act. Overtime, minimum wage, etc. It doesn't necessarily govern in other circumstances. It may govern in terms of determining whether a truck driver ... is an employee for purposes of minimum wage.”
