Declaring independence

Waste Management agreed to pay more than $1 million to settle charges levied by the California Air Resources Board for air quality violations in 2004 and 2005 resulting from the company’s failure to properly inspect its diesel truck fleet to ensure compliance with state emissions standards. California’s Periodic Smoke Inspection Program requires annual smoke opacity tests of California-based fleets, and the state also conducts roadside smoke inspections.

Beginning Jan. 1, California will triple its idling fine from $100 to $300 and prevent registration of trucks with outstanding citations for pollution. Gov. Arnold Schwarzenegger on Oct. 15 signed the Healthy Heart and Lung Act, AB 233, which also directs the California Air Resources Board to develop a comprehensive plan to enforce diesel regulations for
all vehicles and engines.

Wyoming Highway Patrol is citing more trucks on state highways for being overweight. The patrol issued an average of nearly 740 overweight-load citations each year between 2002 and 2005, but in 2006, it wrote 900 citations. By Oct. 15 of this year, the patrol had written 600 tickets.

The U.S. Court of Appeals for the Fifth Circuit upheld a National Labor Relations Board ruling that El Paso, Texas-based California Gas Transport violated federal labor law
by threatening employees with reprisals, terminating employees and refusing to bargain with the union representing its truck drivers.

Q What can be done to preserve the owner-operator as an independent businessman in view of the current trends in federal and state law?

A This is the third and final installment in a series dealing with the status of owner-operators as independent contractors and the classification issue in general. In the past articles, we have seen the importance of the classification issue in reducing the welfare tax burdens attendant to employee status, including worker’s compensation premiums, unemployment compensation, overtime pay, withholding, etc. We have seen that state laws are in flux and that an owner-operator classified as an independent contractor under one state’s law may be entitled to worker’s compensation and other employee benefits in an adjacent state.

I understand that last year there were 72 different bills before state legislatures that affected the classification issue, and there are continuing legislative efforts to force employers to reclassify independent contractors as employees in California, Connecticut, Illinois, Minnesota, New Hampshire, New York and Rhode Island.

On the federal level, we have seen that the Democrat-controlled Congress is not apt to grant relief and that the currently well-settled treatment of owner-operators as independent contractors for federal taxation purposes may be threatened by legislative initiatives in the name of workers’ health and safety.

There are no easy solutions, either for carriers who use owner-operators or the small businessmen who comprise the owner-operator industry. But some things are clear. Trucking companies cannot fight the political battle alone; owner-operators and small fleet owners must make the compelling case that they are not “prisoners of camp,” but rather are owner-operators by choice who seek to grow their small businesses free from the economic burden imposed upon their employee counterparts. The truth-in-leasing regulation, 49 C.F.R.