<img src="//bat.bing.com/action/0?ti=4066564&amp;Ver=2" height="0" width="0" style="display:none; visibility: hidden;">

Regulatory and Legislative Update - April 2021

By Dan Boaz

Contents

FMCSA has extended its emergency declaration regarding COVID-19 through May 31. For the latest version and other guidance related to COVID-19 is available at www.fmcsa.dot.gov/COVID-19.

Regulation and Enforcement

Legislation

Advocacy and Comment

 

Regulation and Enforcement

DOL proposes to withdraw rule on worker classification

Comments are due April 12 on a notice of proposed rulemaking (NPRM) to withdraw a Trump administration rule regarding independent contractor status. The U.S. Department of Labor’s Wage and Hour Division (WHD) had already delayed the effectiveness of the rule until May 7 while it reviewed the regulation. The Trump administration regulation, which was issued in January and originally scheduled to take effect in March, adopted a new “economic reality” test to determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FSLA).

In the NPRM, WHD said that courts and the department have not used the new economic reality test and that neither the text of the FLSA nor longstanding case law support the test. WHD said the rule would narrow or minimize other factors that courts have traditionally considered, making the economic test less likely to establish that a worker is an employee under the FLSA. For the NPRM, visit https://www.federalregister.gov/d/2021-05256.

DOT rescinds Trump administration’s changes on rulemakings, guidance

The U.S. Department of Transportation (DOT) issued a final rule that rescinds policies and procedures related to rulemaking, guidance, and enforcement that DOT had implemented in December 2019. The rule affects not only department-level proceedings but also those within its agencies, including the Federal Motor Carrier Safety Administration.

The 2019 changes largely wrote into DOT regulations (49 CFR part 5) some of the reforms that had been ordered by various executive orders issued by President Trump. Those included regulatory reform policies on regulatory budgeting, the “2-for-1” plan (repealing two rules for every one new rule), and the Regulatory Reform Task Force.

In its latest action, DOT said it was responding to two recently issued executive orders that (1) revoke several Trump administration executive orders relating to rulemaking, guidance, and regulatory enforcement (E.O. 13992) and (2) direct executive departments to review regulations that conflict with the objectives concerning protecting public and the environment (E.O. 13990). However, the new rule rescinds more than just provisions directly attributable to now-revoked executive orders. The department also has rescinded regulations in 49 CFR part 5 that:

  • Solely apply to the department's internal operations “and thus need not be codified in the Code of Federal Regulations;”
  • Are duplicative of existing procedures contained in internal departmental procedural directives; and
  • Are derived from the Administrative Procedure Act and significant judicial decisions “and thus need not be adopted by regulation in order to be effective.” 49 CFR part 5, subpart D – Enforcement Procedures was rescinded in its entirety for that reason, DOT said.

DOT said removing these provisions “ensures that the Department is able to effectively and efficiently promulgate new Federal regulations and other actions to support the objectives stated in E.O. 13990.” However, the department said the regulations would continue to include provisions related to the public’s ability to interact with DOT on rulemaking matters and activities. For example, DOT retained procedures for the public to petition for rulemakings and exemptions. Although the new rule rescinds language that explicitly provided for retrospective reviews and guidance document petitions, “the Department will nevertheless accept and process these types of petitions,” it said.

DOT issued the new rule without a notice-and-comment process on the grounds that Administrative Procedure Act requirements do not apply to an action that is a rule of agency organization, procedure, or practice. The same was true for the December 2019 rule that this rule largely overturns.

For the Federal Register notice of the final rule, visit https://www.federalregister.gov/d/2021-06416. For DOT’s December 2019 rule, visit https://www.federalregister.gov/d/2019-26672.

CVSA to hold enforcement events in May and July

The Commercial Vehicle Safety Alliance has scheduled its annual Operation Safe Driver Week for July 11-17 with an emphasis on speeding. During Operation Safe Driver Week, law enforcement personnel will be on the lookout for commercial motor vehicle drivers and passenger vehicle drivers engaging in risky driving behaviors in or around a commercial motor vehicle (CMV).

CVSA previously announced that its annual International Roadcheck enhanced inspection event would be held May 4-6. The emphasis of this year’s Roadcheck will be lighting and hours of service. Roadcheck traditionally has been held in early June, but CVSA moved it up a month because its research has shown that weather tends to be better in early May than in early June.

Bus operator seeks exemption from full clearinghouse query in hiring

FMCSA is requesting comments by April 15 on an application by FirstGroup plc for an exemption to allow it to use a limited pre-employment query of the drug and alcohol clearinghouse as a screen when hiring school bus and transit drivers rather than having to conduct a full pre-employment query as required under the regulations. FirstGroup says the requirement for a full query is hindering its ability to hire at the speed and level needed to keep pace with the demands of the contracted school and transit transportation industry and is resulting in hundreds of thousands of dollars of increased costs.

Under the requested exemption, in lieu of a full query, FirstGroup would conduct a limited pre-employment query of the clearinghouse. If the limited query indicated that information about the driver existed, the company would then conduct a full query of the clearinghouse with the driver-applicant providing consent in the clearinghouse as required. FirstGroup also would conduct a second limited query within 30 to 35 days of the initial limited query and conduct multiple limited queries on all its CDL drivers each year thereafter. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-05328.

Armored car operation seeks exemption to weld front doors shut

FMCSA is inviting comments by May 7 on an application from Loomis Armored US, LLC for an exemption to allow the driver and passenger doors of the cab of its specialized armored vehicles to be welded shut. Loomis believes that welding shut the cab doors and adding two new doors behind the cab will maintain safety while allowing secure armored car operations with reduced staff. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-07102.

FMCSA grants windshield exemption to Bendix

FMCSA granted an exemption to Bendix Commercial Vehicle Systems to allow its advanced vehicle safety systems, which are equipped with cameras, to be mounted lower in the windshield on CMVs than is currently permitted. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-06982.

 

Legislation

West Virginia law allows clear path to independent contractor status

LegislationWest Virginia Gov. Jim Justice last month signed legislation (Senate Bill 272) intended to provide a clear framework for establishing when a worker is an independent contractor or employee. The findings section of the new law notes that legal standards are not only often subjective but also often vary depending on the particular law at issue. The goal of the legislation is to provide certainty and clarity for all involved.

Under the new law, a person is an independent contractor if there is a written contract stating such and the person satisfies any three of nine specified conditions that indicate an independent contractor relationship. Of particular interest in the trucking context is a provision that explicitly allows firms using the services of an independent contractor to specify safety-related devices, procedures, or training. For the text of the West Virginia law, visit http://bit.ly/WVA-IC.

Biden infrastructure plan envisions passage of the PRO Act

The Biden administration’s proposed American Jobs Plan – a $2.3 trillion broadly defined infrastructure package – apparently contemplates enactment of various pro-labor measures, including the Protecting the Right to Organize Act, or PRO Act. An endorsement of the PRO Act is contained in a White House fact sheet on the American Jobs Plan, specifically in a section that proposes measures aimed at promoting union organization and collective bargaining.

The U.S. House of Representatives has already passed the PRO Act on a party line vote. Among a host of pro-labor provisions, the bill (H.R. 842) includes language that would mandate a federal ABC test for worker classification similar to that in California’s AB 5. The bill also would explicitly declare misclassification of workers a violation of the National Labor Relations Act.

Although broadly billed as an infrastructure plan, the American Jobs Plan allocates relatively little money for highways – just 5% of the total cost. Most of the funding goes into construction and retrofitting of buildings and into investments in Biden administration priorities, such as promoting adoption of electric vehicles. Almost as controversial as the labor provisions are the financing measures, including an increase in the corporate tax rate to 28% and the sunset of various tax benefits for companies that operate overseas. The bill also would eliminate tax preferences held by the petroleum industry. To view the fact sheet on the American Jobs Plan, click on the “Learn More” button at https://www.whitehouse.gov/american-jobs-plan.

Bills reintroduced to allow 18-year-old interstate drivers under specific conditions

Legislation (S. 659, H.R. 1745) that would establish an apprenticeship program allowing for interstate drivers aged 18 to 20 was reintroduced in both the House and Senate last month. The Developing Responsible Individuals for a Vibrant Economy Act, or DRIVE Safe Act, would require separate probationary periods of 120 hours and 280 hours, each with specific performance benchmarks. A driver could not transport hazardous materials until after completing the 120-hour probationary period hauling non-hazmat freight.

The legislation would allow 18- to 20-year-olds to drive interstate only if the CMV is governed at 65 mph and equipped with automatic manual or automatic transmissions; active braking collision mitigation systems; and Forward-facing video event capture. The legislation has been introduced in the past two Congresses but failed to advance. For more information, visit https://www.congress.gov/bill/117th-congress/senate-bill/659 and https://www.congress.gov/bill/117th-congress/house-bill/1745.

House and Senate bills would require underride protection rulemaking

Sen. Kirsten Gillibrand (D-New York) and Rep. Steve Cohen (D-Tennessee) reintroduced legislation (S. 605, H.R. 1622) that would mandate regulations to require installation and retrofit of rear, side, and front underride guards on all CMVs with gross vehicle weight ratings of more than 10,000 pounds. The bill also would specify performance standards for each type of underride guard as well as require rules on inspection, maintenance, and repair of the devices. Essentially the same bills were introduced in the past two Congresses. For more information, visit and https://www.congress.gov/bill/117th-congress/senate-bill/605 and https://www.congress.gov/bill/117th-congress/senate-bill/659.

House bill would authorize $755 million to expand commercial truck parking

Reps. Mike Bost (R-Illinois) and Angie Craig (D-Minnesota) have reintroduced legislation (H.R. 2187) that would establish a set-aside source of funding to expand more commercial truck parking throughout the U.S. The bill would authorize $755 million total in annual increments. The funds could be used at a variety of locations, including construction of public rest areas and commercial vehicle parking facilities and parking capacity next to commercial truck stops, weigh stations, and public and private freight facilities. For more information, visit https://www.congress.gov/bill/117th-congress/house-bill/2187.

Sen. Fischer reintroduces bill to loosen restrictions on agricultural hauling

Sen. Deb Fischer (R-Nebraska), the ranking Republican on the Senate subcommittee that oversees trucking regulations, has introduced legislation (S. 792) to modify certain agricultural exemptions for HOS requirements. The bill would eliminate the limitation that applies ag and livestock HOS exemptions only during state-designated planting and harvesting seasons. The bill also would amend and clarify the definition of “agricultural commodities” and authorize a 150 air-mile exemption from HOS requirements on the destination side of a haul for ag and livestock haulers. For details of S. 792, visit https://www.congress.gov/bill/117th-congress/senate-bill/792.

Senate bill would establish federal working group on electric vehicles

Sen. Catherine Cortez Masto (D-Nevada) introduced legislation (S. 508) that would establish a federal working group to make recommendations on the development, adoption, and integration of light and heavy-duty electric vehicles into the transportation and energy systems of the U.S. The working group would include federal and private sector members, including at least one representative of the trucking industry. For more information, visit https://www.congress.gov/bill/117th-congress/senate-bill/508.

 

Advocacy and Comment

Easy Come, Easy Go

Advocacy and CommentLast year, the Department of Transportation issued internal rules providing needed clarity and due process applicable to FMCSA investigations, safety ratings and civil forfeitures. The Agency’s decisions got little publicity but were reviewed with approval approximately a year later in a transportation lawyers’ journal.

Unfortunately, the ink was not dry on the article before incoming Secretary Pete Buttigieg issued a 19-page document largely countermanding the previous findings and eliminating administrative restraints on regulatory abuses the earlier rules were intended to address.

The formal rulemaking process, which was not followed, includes an opportunity for notice and comment, the development of a record for appeal, and the provision for due consideration concerning the effect of the regulations on small carriers. Unfortunately, neither the Trump Administration’s findings nor Buttigieg’s reversal were based on any opportunity for notice or comment. Both must be viewed as “Rules du Jour” (rules of the day).

All too frequently, administrative agencies have grown accustomed to publishing guidance documents masquerading as rules which themselves offer no due process as the FMCSA’s touting of SMS methodology has poignantly demonstrated.

The formal rulemaking process, while cumbersome, is an important procedural protection against unvetted material changes in regulations. The first 100 days of the new administration indicate that there may be many new regulatory and legislative developments to be covered in the coming months.

Owner Operator Update

As previously noted, the PRO Act passed by the House would, along with other pro-labor provisions, eliminate independent contractor treatment of owner-operators. The chance of passage in the Senate may be increased by the parliamentarians’ decision that revenue bills are not subject to a 60-vote filibuster. The FAST Act has been tied to the infrastructure funding bill, which could thus result in a greater chance of passage.

Read More »

Regulatory and Legislative Update - March 2021 Addendum

By Dan Boaz

Contents

Legislation

Advocacy and Comment

 

Legislation

House passes PRO Act with strict ABC test

The U.S. House of Representatives on March 8 passed on a party line 225 to 206 vote legislation that would mandate a federal ABC test for worker classification similar to that in California’s AB 5. The Protecting the Right to Organize (PRO) Act (H.R. 842) now moves to the Senate. The same legislation passed the House in the 116th Congress but died in the Republican-controlled Senate.

Although Democrats technically control the Senate by virtue of Vice President Harris’ tie-breaking vote, H.R. 842 faces an uphill battle owing to the filibuster. Some observers believe that killing the filibuster altogether would be the only path to final passage of the entire PRO Act, although it is more feasible that individual pieces could pass as riders to other legislative vehicles. Regardless, House passage coupled with Democratic control of the Senate means that this is the closest Congress has ever come to essentially outlawing the leased owner-operator model.

The PRO Act contains a host of pro-labor provisions, but for the trucking industry, the most problematic measure is section 101(b), which includes a definition of an employee stating that an individual performing any service shall be considered an employee and not an independent contractor unless:

  • A. the individual is free from control and direction 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.

In addition to imposing a federal ABC test, the PRO Act would explicitly declare misclassification of workers a violation of the National Labor Relations Act (NLRA). As such, the legislation would overturn the National Labor Relations Board’s August 29, 2019 decision in Velox Express, which held that misclassification is not a violation of the NLRA. For more on the PRO Act, visit https://www.congress.gov/bill/117th-congress/house-bill/842.

 

COVID RELIEF ALERT – New Legislation Could Provide Additional Relief for Small Carriers and Brokers

President Biden is set to sign the American Rescue Plan (“ARP”) this evening that will provide an additional $1.9 trillion in COVID-19 relief.  The relief is in addition to the trillions that the Trump administration funded over the course of the past year. $50 billion will be used to fund new and existing relief programs for small businesses that are administered by the Small Business Administration (“SBA”).  Some these programs include:

Paycheck Protection Program (PPP)

  • ARP will give $7.25 billion funds for the existing PPP.
  • Recent changes to PPP rules have been made by the Trump and Biden administrations making access to PPP loans more equitable, specifically for sole proprietors, independent contractors, and smaller businesses with up to 10 employees.  If fall into one of those categories and haven’t taken advantage of this program, contact your bank before the latest deadline for the program of March 31, 2021.
  • 2nd draws are available for eligible businesses if you have previously received a PPP loan.

Economic Injury Disaster Loan

  • Provides grants for businesses up to $10,000.

Information on the above programs and other relief programs administered by the SBA is available on the following SBA website: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.  Note, the new law will also provide $1.32 billion in administrative funding to the SBA for resources necessary to further implement these relief programs.

 

Advocacy and Comment

This mid-month update reflects how quickly important legislation is moving through the new Congress.

Although the above analysis of the effect of House passage of the PRO Act is hopefully correct, the prospect of it becoming law is deeply concerning, particularly for owner operators and their carrier partners. The importance of the model to the trucking industry and to small businesses has still not gained traction and is a “hot topic” of general industry concern. (See March Regulatory and Legislative Update)

As predicted, the new Department of Labor has formally repudiated the “Economic Realities” rule promulgated by the former DOL. In doing so, it suggests that based upon existing precedent it might have denied employee benefits to existing workers that could have been reclassified as independent contractors. In turn, any change contemplated by the new Administration which would require reclassification of owner operators would deprive blue collar entrepreneurs of their long held right to be treated on equal footing with other independent businessmen.

Secondly, included is a description of the possible effect of the $1.9 trillion COVID-19 legislation on additional stimulus funding. The dysfunctionality of the earlier PPP grants is hopefully over, and funds will be available to needy small businesses and independent contractors. If you missed out on earlier funding and have questions, please email us at info@transportationlaw.net.

Read More »

Regulatory and Legislative Update - March 2021

By Dan Boaz

Contents

FMCSA has extended its emergency declaration regarding COVID-19 through May 31. For the latest version and other guidance related to COVID-19 is available at www.fmcsa.dot.gov/COVID-19.

Regulation and Enforcement

Legislation

Open Issues

Advocacy and Comment

 

Regulation and Enforcement

DOL postpones effective date on independent contractor rule

As expected, the U.S. Department of Labor’s Wage and Hour Division (WHD) has delayed until May 7 the effective date on a Trump administration final rule regarding independent contractor status under the Fair Labor Standards Act (FSLA) while Biden administration officials review the rule for issues of law, policy, and facts. The rule, which had been set to take effect March 8, is virtually certain to be either scrapped or fundamentally revamped. (For details on the final rule, see Regulatory Update, January 2021.)

In keeping with a regulatory freeze and review ordered on January 20, WHD on February 5 proposed to delay the rule until May 7 pending review and invited comments on that question. WHD received 1,512 comments in response with numerous comments on both sides of the issue, along with comments making procedural objections to the short time frame to comment or to the lead time for delaying the effective date of a final rule. For the Federal Register notice delaying the effective date, visit https://www.federalregister.gov/d/2021-04608. For the regulation and comments on the proposed delay of the effective date, visit https://beta.regulations.gov/docket/WHD-2020-0007.

DOL withdraws opinions sleeper berth pay, independent contractor status

WHD has withdrawn a July 2019 opinion letter (FSLA2019-10) declaring that a truck driver did not have to be compensated for time spent in a truck’s sleeper berth provided that the driver had been relieved of all duties and permitted to sleep without interruption from the employer. WHD also withdrawn a May 2019 opinion letter (FSLA2019-6) addressing whether a service provider for a “virtual marketplace company” is an employee of the company under FSLA or an independent contractor.

In a February 19 notice on the agency’s website, WHD said that opinion letter FSLA2019-10 “was inconsistent with longstanding WHD interpretations regarding the compensability of time spent in a truck's sleeper berth.” WHD said that “several courts have declined to follow the opinion letter, determining, among other things, that it is inconsistent with the Department's regulations; unpersuasive; and not entitled to deference, in part because the letter did not adequately explain WHD's change in position.” The agency said those courts have instead continued to follow the department's longstanding prior position. To the extent that FLSA2019-10 withdrew prior opinion letters on the issue, those letters are reinstated, WHD said.

WHD said in a separate February 19 notice that FSLA2019-6 addresses the same issue under consideration in the final Trump administration rule concerning independent contractor status. Given that the Biden administration has delayed the effective date of that rule while it considers further comments, the opinion letter is withdrawn, WHD said.

The withdrawal of FSLA2019-6 follows a January 26 withdrawal of an opinion letter (FSLA2021-9) related to independent contractor status that was specific to trucking. FSLA2021-9, which WHD had issued on the final full day of the Trump administration, had concluded that a motor carrier’s requirement that tractor-trailer drivers abide by safety-related mandates does not constitute control for the purposes of determining independent contractor status. As it did with FSLA2019-6, WHD a week later ruled that FSLA2021-9 was premature because the final rule on independent contractor status had not taken effect.

For WHD opinion letters and notices on those that are withdrawn, visit https://www.dol.gov/agencies/whd/opinion-letters/search?FLSA.

SBA takes steps to improve PPP access for very small businesses

The White House in February announced several changes in the Paycheck Protection Program (PPP) to improve access to the recently reauthorized program by very small businesses. The steps included designating February 24 through 5 p.m. Eastern on March 9 as a period during which only sole proprietors and businesses with fewer than 20 employees could apply for PPP loans. This exclusive period is intended to ensure that very small businesses have ample time to apply for and receive support before PPP expires on March 31.

SBA also is allowing sole proprietors, independent contractors, and self-employed individuals to receive more financial support by revising the PPP’s funding formula for these categories of applicants. SBA also loosened some prior restrictions to allow access to PPP loans by small business owners who (1) have non-fraud felony convictions; (2) have struggled to make student loan payments; and (3) are not citizens but are lawful U.S. residents.

For more information, visit https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program.

FMCSA postpones effective date on rule changing rulemaking procedures

FMCSA postpones effective date on rule changing rulemaking procedures that was slated to take effect March 1. The effective date is now March 21, allowing time for the Biden administration to review the rule and consider any questions of fact, law, or policy that it might raise. For the Federal Register notice delaying the effective date, visit https://www.federalregister.gov/d/2021-04110. For the Federal Register notice on the rule itself https://www.federalregister.gov/d/2020-27854.

Wilson Logistics wins exemption on use of permit-holding drivers

FMCSA has granted an exemption to Wilson Logistics to allow drivers who have hold a commercial learner’s permit (CLP) and who have passed the commercial driver’s license (CDL) skills test but who have yet to receive the CDL document to drive even if the accompanying CDL holder is not seated in the passenger seat. FMCSA has previously granted similar exemptions to C.R. England and New Prime, Inc. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-03685.

 

Legislation

House Democrats reintroduce PRO Act

Rep. Bobby Scott (D-Virginia) and 195 original co-sponsors on February 4 introduced comprehensive pro-labor legislation (H.R. 842) that includes language mandating a federal ABC test for worker classification similar to that in California’s AB 5. The legislation – called the Protecting the Right to Organize Act, or PRO Act – passed the House in the 116th Congress but was never considered by the Republican-controlled Senate.

Section 101(b) of the PRO Act includes a definition of an employee stating that an individual performing any service shall be considered an employee and not an independent contractor unless:
A.  the individual is free from control and direction 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.”

In addition to imposing a federal ABC test, the PRO Act would explicitly declare misclassification of workers a violation of the National Labor Relations Act (NLRA). As such, the legislation would overturn the National Labor Relations Board’s August 29, 2019 decision in Velox Express, which held that misclassification is not a violation of the NLRA.

The PRO Act also would establish a host of other pro-labor measures, including prohibiting employers from permanently replacing striking workers, prohibiting offensive lockouts, removing limitations on secondary picketing and strikes, and barring employers from holding mandatory meetings to persuade employees not to unionize.

Since introduction of H.R. 842, another 16 Democrats have co-sponsored the bill. Meanwhile, Sen. Patty Murray (D-Washington), the lead sponsor of the Senate version of the PRO Act in the last Congress, also announced plans on February 4 to reintroduce the bill, but the legislation apparently has not been formally introduced yet. For more on the House bill, visit https://www.congress.gov/bill/117th-congress/house-bill/842.

House, Senate bills would establish an advisory board to promote women in trucking

Legislation (H.R. 1341, S. 469) aimed at increasing participation of women in various aspects of the trucking industry was introduced in both the House and Senate in February. Rep. Mike Gallagher (R-Wisconsin) and Sen. Jerry Moran (R-Kansas), lead sponsors of the legislation, had introduced the bills in the 116th Congress, but they did not advance.

The bills would require FMCSA to establish and facilitate an advisory board to promote organizations and programs that provide education, training, mentorship, or outreach to women in the trucking industry and that recruit women into the trucking industry. The board would report to FMCSA within 18 months of the legislation’s enactment, and FMCSA would report to Congress outlining actions taken to adopt the strategies recommended by the board or explaining the reasons the agency did not adopt the strategies. For more information on the bills, visit https://www.congress.gov/bill/117th-congress/house-bill/1341 and https://www.congress.gov/bill/117th-congress/senate-bill/469.

House bill would provide HOS relief on perishable agricultural products

Rep. W. Gregory Steube (R-Florida) introduced legislation (H.R. 358) that would require the Federal Motor Carrier Safety Administration (FMCSA) to exempt from certain provisions of the hours-of-service (HOS) rules drivers and carriers “transporting any agricultural, horticultural, or floricultural commodity.” The bill further defines the category as including “both fresh and processed products, as well as sod and other agricultural products sensitive to temperature and climate and at the risk of perishing in transit.”

Under the bill, in those situations (1) loading and unloading of commercial motor vehicles would be excluded from on-duty time requirements; (2) the 30-minute rest break would not be mandatory; and (3) carriers and drivers would not be limited by the maximum on-duty time if they are within 150 miles of their scheduled delivery point. For more information on the bill, visit https://www.congress.gov/bill/117th-congress/house-bill/358.

 

Open Issues

Comment period still open on proposed alternative vision standard

FMCSA’s proposed rule to adopt an alternative vision standard for physical qualification to replace the current vision exemption remains open for comment until March 15. Although the rule was proposed late in the Trump administration, FMCSA has yet to take any action halting or delaying the comment date. The Federal Register notice is available at https://www.federalregister.gov/d/2020-28848.

 

Advocacy and Comment

This month’s Regulatory and Legislative Update confirms earlier predictions that the owner operator/independent contractor model is in the crosshairs of proposed future administrative and congressional action. As predicted, the favorable “Economic Realities Test” of the former Department of Labor was stayed by the new Administration. Also as noted above, the new DOL is already issuing new opinions and taking actions which could adversely affect established practices. Finally, the prolific use of Executive Orders by the new Administration has been noted in both the New York Times and the Wall Street Journal, as has evidence of the new Administration’s support for increased unionization.

On the legislative side, the PRO Act sets up an across-industry employee classification test similar to California’s AB-5 which the owner operator/ independent contractor model as presently applied could not meet. Missing from the debate at both the legislative and DOL levels is the uniqueness and importance of the owner operator model to the trucking industry and to the blue-collar small businessmen for whom independent contractor status under the truth-in-leasing regulations is an opportunity and a choice.

Clearly, the independent contractor treatment of small businesspersons that lease equipment with drivers to carriers under the Federal Leasing Regulations (49 C.F.R. 376) has been an established rule of commerce for decades. This model is the backbone of the long-haul truckload segment, intermodal drayage and other trucking niches.

Yet the case is left to be made that the owner operator model is a unique and an important exception to any new or different rule of general application in determining independent contractor status. The model is based upon past precedent and grounded in Federal Regulations which provide opportunities and choices to blue collar entrepreneurs while ensuring protections against abuses offered through the truth-in-leasing regulations and Federal self-help statutes.

On February 24, 10 trade associations filed comments with the new Department of Labor to make the case for special treatment and a carve-out for the owner operator model consistent with past precedent. See https://www.regulations.gov/comment/WHD-2020-0007-3105. Readers of this monthly update are urged to read these comments and participate in efforts to save this important model.

Read More »