News & Events > Insights

January 18, 2024–The U.S. trucking industry has responded with pointed criticism after the Biden Administration published a final rule on independent contractor classification, calling it an “un-American” proposal.

“I can think of nothing more un-American than for the government to extinguish the freedom of individuals to choose work arrangements that suit their needs and fulfill their ambitions,” said Chris Spear, President and CEO of the American Trucking Associations.

He said that more than 350,000 truckers choose to work as independent contractors because of the “economic opportunity” it creates and the “flexibility” it provides, enabling them to “run their own business and choose their own hours and routes.”

Spear said that freedom of choice has been “an enormous source of empowerment for women, minorities, and immigrants pursuing the American Dream.”

Limiting independent contracting could have an adverse effect on trucking companies that employ independent owner-operators as contractors to meet varying needs of customers while avoiding the cost of maintaining fleets of vehicles. It means some companies could go out of business.

The law firm of Scopelitis, Garvin, Light, Hanson & Feary, which specializes in transportation legislation, issued a statement saying it anticipates that “business groups will file suit(s) challenging DOL’s authority to issue this regulation.”

The Department of Labor (DOL) said the “final rule” replaces the Independent Contractor Status Under the Fair Labor Standards Act (FLSA) rule that was published on January 7, 2021.

The government sees the final rule as more consistent with the FLSA and an effort to prevent the misclassification of employees as independent contractors which could deny workers “minimum wage, overtime pay, and other protections.”

“This final rule will reduce the risk that employees are misclassified as independent contractors while providing a consistent approach for businesses that engage with individuals who are in business for themselves,” DOL said.

The rule, set to take effect March 11, directs employers to consider six criteria to determine if a worker should be classed as an employee or as an independent contractor, without “pre-determining” whether one criterion outweighs the other. 

The six factors include the opportunity for profit or loss based on managerial skill; investments by the worker and the potential employer; the degree of permanence of the relationship; the nature and degree of control; the extent to which the work performed is an integral part of the potential employer’s business; and the skill and initiative.