1099 vs. W2
Obama proposed budget provision takes aim at independent contractor issue
In recent years, governmental agencies and courts have tried to decide if workers are employees or independent contractors. Now a provision in President Obama’s 2011 federal budget request targets the issue.
Obama wants $25 million for the Department of Labor to add 100 enforcement employees and competitive grants to boost states’ ability to address misclassification.
Classification is not a black and white issue, not even to the Internal Revenue Service. “There is no ‘magic’ or set number of factors that ‘makes’ the worker an employee or an independent contractor, and no one factor stands alone in making this determination,” the IRS states on its website.
On Dec. 15, Sen. John Kerry (D-Mass.) introduced a bill aimed at reducing the misclassification of workers as independent contractors. The Taxpayer Responsibility, Accountability, and Consistency Act, or S. 2882, was referred to committee with six co-sponsors. A companion bill, H.R. 3408, was referred to committee July 30 with 28 co-sponsors.
The National Employment Law Project reported that between July 2008 and June 2009, at least eight states enacted statutes aimed at independent contractor problems and 20 state legislatures introduced bills on the subject.
Governmental bodies often eye the construction industry for misclassification, but the trucking business also draws examination. For example, the Minnesota legislature referred to committee a bill to create a definition of independent contractors for trucker owner-operators.
Many employee-contractor arguments occur in California. On Feb. 4, state Attorney General Jerry Brown announced victory against five trucking companies after beginning a crackdown on carriers serving Long Beach and Los Angeles ports 18 months earlier.
Still, on Oct. 13, Brown lost a case against Pac Anchor Transportation and truck owner Alfredo Barajas when a Los Angeles Superior Court entered a motion for judgment in favor of the operator.
On Feb. 24, the U.S. 9th Circuit Court of Appeals denied an injunction request by the American Trucking Associations against the Port of Los Angeles’ plan to require owner-operators become employees of approved trucking companies.
Under its Clean Trucks program, the port contends its concession plan is the only way to help drivers buy and maintain new lower-emissions trucks. ATA counters the plan violates federal interstate transport laws and makes it easier for the Teamsters to organize drivers.
On Oct. 15, the Los Angeles Harbor Commission extended a contract with a lobbying firm, founded by Richard Gephardt, a former Democratic congressman, to advocate changes to the Federal Aviation Administration Authorization Act of 1994 so ports could implement the employee requirement.
On Oct. 18, New York Mayor Michael Bloomberg, an independent, was joined by Newark Democrat Mayor Cory Booker and the Teamsters in asking for this change as well.
The battle continues in state courts. The Kansas Court of Appeals ruled in favor of Nebraska Furniture Mart Feb. 17, stating it was not an employer as defined by the state wage and hours laws and, therefore, does not owe truckers or their helpers overtime pay.
On Feb. 19, Arizona-based Swift Transportation and Interstate Equipment Leasing requested a change of venue to its home state in a suit in which truckers say they were wrongly classified as independent contractors. The plaintiffs, who are seeking class action status, filed in U.S. District Court for the Southern District of New York against Swift, owner of IEL, which leases trucks to Swift’s California and New York owner-operators.
On April 21, 2009, the U.S. Court of Appeals for the District of Columbia Circuit ruled FedEx Ground owner-operators were contractors, not employees, and therefore outside the jurisdiction of the National Labor Relations Board.
FYI News Briefs
ATA Port Case This Month
The Port of Los Angeles and the American Trucking Associations will square off in a civil suit in federal court beginning April 20 over driver classification aspects of the port’s emissions-reduction program. The trial in U.S. District Court in Los Angeles will consider ATA’s request for a permanent injunction to block the port program that would require all independent truckers to become employees of approved trucking companies.
NAFTA Trade Increased in December
North American Free Trade Agreement partners Canada and Mexico was 10.5 percent higher in December 2009 than in December 2008, with a value of $58.5 billion, according to the Bureau of Transportation Statistics of the U.S. Department of Transportation. The increase was the first over the same month of the previous year since September 2008, but the value of trade in December still remained 4 percent below the value in December 2007.
Florida Building Trucks-Only Lane
Workers are building a series of ramps linking Florida’s Interstate 4 and Selmon Crosstown Expressway, which will include dedicated ramps for trucks working the Port of Tampa. The $3.89 million project is funded through federal and state fuel tax revenues, future toll revenues and federal stimulus funds. Truckers using dedicated truck lanes will pay $1 per use.
Navistar to Develop Natural Gas Engine
Navistar has entered an agreement with Clean Air Power to develop a Navistar 2010 MaxxForce 13 big bore engine to run on natural gas and diesel for the North American market. Clean Air Power developed Dual-Fuel combustion technology, allowing heavy-duty diesel engines to operate on a combination of diesel and natural gas. The new product initially will be aimed at the regional haul truck market with a goal of achieving a 400-mile range.
Schneider Adding 2,100 Drivers
Schneider National plans to increase its regional driving force to 2,100 drivers and have them in place by December. The transportation and logistics company has 12,300 trucks on the road. More information is available at www.schneiderjobs.com.
January Tonnage Shows Improvement
U.S. truck tonnage rose 5.7 percent in January from a year earlier, the second consecutive year-over-year monthly increase, the American Trucking Associations reported. ATA’s seasonally adjusted for-hire truck tonnage index rose 3.1 percent in January from December, following a 2.1 percent gain in December from November. January’s year-to-year gain marked the best performance for January since 2004-2005.
New York Port Start Clean Truck Program
The Port Authority of New York and New Jersey and the U.S. Environmental Protection Agency launched a program to replace up to 636 of the oldest, most polluting trucks serving the port with newer models that generate less pollution and greenhouse gas emissions. The $28 million program is designed to encourage owners of pre-1994 drayage trucks that regularly serve the port to buy newer vehicles.
EPA Approves Bridgestone Tires
Bridgestone Bandag Tire Solutions’ Bridgestone-brand R260F and R250F commercial tires are approved for use on Environmental Protection Agency SmartWay-certified equipment. The R260F and R250F all-position radials are engineered for high-scrub environments including pickup and delivery and urban and regional hauling. The two all-position radials also comform to California Air Resources Board requirements.
Iowa 80 Launches Sweepstakes
Commercial drivers have a chance to win one of 100 prizes to be given away in the Dreams of Chrome Sweepstakes commemorating the 10th anniversary of the Iowa80.com website. To enter the contest, drivers can fill out the form on the bottom of their Iowa 80 Truckstop receipt from any purchase made in the Super Truck Showroom or they can register online at www.dreamsofchrome.com.
Trucking Reality Show on for Fourth Season
The History Channel’s “Ice Road Truckers” TV series will premiere its fourth season this spring. The show focuses on Alex Debogorski and his fellow drivers as they return to the Northwestern ice roads each winter to battle the forces of nature while transporting tons of industrial goods over ice covered lakes.
HSV Stops Now Independent
After more than 25 years under a national franchise, Highway Service Ventures, based in Ashland, Va., is now operating its four truckstops on the East Coast under the HSV Plazas brand. The four HSV Plazas are located at Elkton, Md. (Interstate 95 Exit 109A), Ruther Glen, Va. (I-95 Exit 104), Florence, S.C. (I-95 Exit 169) and Carnesville, Ga. (I-85 Exit 160).
DOT Proposes Drug Test Changes
The U.S. Department of Transportation has proposed amending provisions of its urine drug testing procedures, included testing for lower amounts of amphetamines and cocaine.
The proposal would allow DOT employers to choose between a full-service laboratory and Instrumented Initial Test Facilities.
The Notice of Proposed Rulemaking makes changes to some confirmatory and initial drug tests. The confirmatory drug test is a second analytical procedure performed on a different portion of the sample. An initial drug test differentiates a negative specimen from one requiring further testing for drugs.
The NPRM outlines adopting other HHS lab testing procedures, including:
• Conducting initial and confirmatory testing for ecstasy.
• Conducting initial testing for 6-Acetylmorphines, an intermediate metabolite between heroin and morphine.
• Lowering the initial test and confirmatory test cutoff concentrations for amphetamines and cocaine.
HHS has estimated there may be 10 percent more users of amphetamine and cocaine identified using the lowered cutoffs
Comments on the proposal should be submitted by April 5 and late-filed comments may be considered. Comments must include the Docket OST-2010-0026 or RIN 2105-AD95 for identification and may be submitted by the following means:
• Federal eRulemaking Portal: Go to https://www.regulations.gov/ and follow the online instructions for submitting comments.
• Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Ave. SE, West Building Ground Floor Room W12-140, Washington, D.C. 20590-0001.
Colvin Named Top TCA Company Driver
Gordon “Butch” Colvin of Udall, Kan., is the 2009 Company Equipment Driver of the Year. The Con-Way Truckload driver was announced as the grand prize winner at the Truckload Carriers Association’s annual convention held at the Wynn resort in Las Vegas.
Colvin logged more than 5 million miles over the course of his half-a-century trucking career.
For 17 years, he has driven team with his wife, Dora, who also won first place in the same contest in 2006. Together, they have been recognized twice as Con-way’s Company Team of the Year and five times as Company Team of the Month. They have also received honors for safely achieving a million miles while driving for their company.
The contest is co-sponsored by Truckers News, which will feature Colvin in its May issue.
Also at the convention, Warren Transport’s Steven Recker was named 2009 Owner Operator of the Year, which is co-sponsored by Overdrive magazine.
EPA Revises SCR Guidance for 2010
The U.S. Environmental Protection Agency revised its 2010 engine emissions guidance limiting the number of miles and hours a vehicle using selective catalytic reduction technology can operate after the diesel exhaust fluid is exhausted.
The original guidance issued in February 2009 required engine performance to be degraded after a truck travels 2,000 miles or 40 hours on an empty DEF tank. The revision removes this provision and eliminates any suggested limits on mileage or time trucks should operate with empty DEF tanks.
In a Dec. 30, 2009, letter to engine manufacturers, Karl Simon, director of compliance and innovative strategies at EPA’s Office of Transportation and Air Quality, explained the revision as clarification in a misunderstanding of the intent of the guidance.
“Because some prescriptive language in CISD-09-04 may have led to confusion regarding our intent that the document be used as guidance, rather than setting forth binding requirements, I believe it is appropriate to provide a new document providing revised guidance regarding certification of heavy-duty diesel engines using SCR,” said Simon.
June 17-19, Great West Truck Show, Las Vegas Convention Center. (888) 349-4287, www.greatwesttruckshow.com.
August 13-15, Great Salt Lake Kidney Kamp Truck Show at Thanksgiving Point. Take Lehi Exit 284 from I-15 30 minutes South of Salt Lake City. General & vendor info: Jeff England (800) 877-1320. Judging & Classes: Doyle Elison (208) 251-0987.
Aug. 26-28, Great American Trucking Show, Dallas Convention Center. (888) 349-4287, www.gatsonline.com
If you have a trucking event you would like to publicize, send information six weeks in advance to Truckers News Events Calendar, P.O. Box 3187, Tuscaloosa, AL 35403, or e-mail email@example.com. Truckers News makes no guarantee that information submitted will be published..
Paccar to Open Engine Plant
Paccar announced the official introduction of its MX series diesel engines and the opening this summer of its new engine plant in Columbus, Miss., during a press event at the Paccar Technical Center in Mount Vernon, Wash., on Feb. 5.
Not many companies are taking such steps during “the worst economy in decades,” said Paccar Chairman and CEO Mark Pigott. He credited Paccar’s ability to invest more than $1 billion in its engine initiative over the last decade to “a conservative business approach and long-term focus.”
The MX series, which will be standard on all Kenworth and Peterbilt trucks, features an in-line, 6-cylinder design with four valves per cylinder. Five separate engines make up the MX series, with power ratings ranging from 380 to 485 horsepower and 1,450 to 1,750 pound-feet of torque.
Paccar recently completed its 71st year of profitability and has paid cash dividends every year since 1941, Pigott said. “When markets are booming, every company looks good. But when you turn the lights off, only a few are still shining, and that’s Paccar.”
When Paccar realized the economy was slipping into a recession, the company made some “challenging decisions,” Pigott said. Those included closing down factories, reducing the company’s head count by 40 percent, going “line-by-line” through the capital budget and working with suppliers. “You have to align your business with the recession,” he said. “Every year we go in focusing: We’re going to make money,” he said. “Let’s figure out how we’re going to do that.”
Diesel Price Watch
Prices are the average, self serve, cash at truckstops February 1-28, 2010*
NEW HAMPSHIRE 2.89
NEW JERSEY 2.74
NEW MEXICO 2.76
NEW YORK 3.02
NORTH CAROLINA 2.77
NORTH DAKOTA 2.83
RHODE ISLAND 2.86
SOUTH CAROLINA 2.64
SOUTH DAKOTA 2.68
WEST VIRGINIA 2.88
Source: T-Chek Systems Inc., Eden Prairie, MN.
For more information, (877) SOS-CHEK or www.tchek.com
*Some prices may not include certain state taxes