Owner-operator model still threatened

Henry Seaton - info@transportationlaw.net

By Henry Seaton

Q Is the new healthcare bill going to make us convert our independent contractors to employees?

A There is nothing in the healthcare bill that addresses reclassification directly, but the Coalition for Independent Contractor Freedom published a news release suggesting that the Obama administration is more likely to move quickly to address the alleged misclassification issue now that healthcare has passed.

The Messenger Courier Association of America, which has held two successful lobbying days on Capitol Hill in support of independent contractors, reports that from a federal perspective there are three legislative initiatives and one administrative initiative that affect the trucking industry’s use of owner-operators as independent contractors. The legislative initiatives are:

• The inclusion by the Obama administration of a provision in the new budget bill that would direct the Internal Revenue Service and the Treasury Department to rewrite rules for the classification of independent contractors, repealing the 20-part test and existing favorable law;

• Senate Bill 2882, introduced by Sen. John Kerry (D-Mass.); and

• House Bill 3408, introduced by Rep. Jim McDermott (D-Wash.).

These three bills clearly portray the majority’s asserted effort to repeal favorable case law, including the so-called safe harbor provisions that allow a company charged with misclassification to rely upon past industry practice. A repeal of the safe harbor provisions would result in loss of the North American Van Lines precedent that permits lease-to-own arrangements between carriers and owner-operators.

Legislative initiatives would repeal favorable case law.