Washington Update – January 2024
Department of Labor releases new IC rule – Companies less likely to hire ICs
The Department of Labor has released their new employee classification rule that will result in an increase in misclassification lawsuits and make businesses less likely to hire independent contractors.
The new rule, which goes into effect on March 11, is both extremely vague for businesses yet extremely inflexible for the independent workforce.
The regulation will make companies more wary of hiring short-term contractors. It will be problematic for small businesses because they don’t have the staff or the money to deal with compliance.
The DOL final rule rescinds a 2021 rule in which two core factors–control over the work and opportunity for profit or loss–carried greater weight. Under the new rule, employers would use a totality of the circumstances analysis, in which none of the factors carry greater weight.
The new test includes six factors:
- The degree to which the employer controls how the work is done.
- The worker’s opportunity for profit or loss.
- The amount of skill and initiative required for the work.
- The degree of permanence of the working relationship.
- The worker’s investment in equipment or materials required for the task.
- The extent to which the service rendered is an integral part of the employer’s business.
Some say that the new rule is clearly biased towards declaring most IC as employees, a move that will decrease flexibility and opportunity and result in lost earning opportunities for millions of Americans. The totality of the circumstances test will require more time and resources to apply, creating more confusion and uncertainty for employers.
For a thorough analysis of the bill, check out this or this.
TIE Hits Washington, Again.
TIE board members traveled to Washington just before the holiday to remind elected officials of the importance the Independent Contractor plays in the economy.
“We did 14 congressional meeting is less than 14 hours, educating Members on how important it is to preserve the Independent Contractor model in the trucking industry,” said Scott Brenner, TIE’s executive director.
TIE board members discussed the DOL rule and how Congress might act to neutralize any damage done by the rule such as approving a Congressional Review Act (CRA).
The CRA is a tool Congress can use to overturn federal agency actions, such as the recently adopted IC rule. TIE has recruited congressional champions who are expected to start the CRA process shortly.
“The Department of Labor is jeopardizing the livelihood of our nation’s truckers to appease political supporters,” Brenner said. “We will continue to fight to protect those who serve as the pillars of our supply chain–of our economy.”
Biden Re-Nominates Julie Su for Department of Labor
The White House announced Monday that President Joe Biden has renominated Julie Su to serve as Labor Secretary as her confirmation has languished in the Senate for more than 10 months.
Su’s nomination cleared a key Senate committee in April, but with no Republicans on record supporting her, the Biden administration and her backers have scrambled to lock down 50 Democratic votes needed to confirm her. Wavering senators say that she had minimal experience in negotiations between workers and management and point to perceptions that she’s anti-business.
U.S. Representative Kevin Kiley (R-CA), Chairman of the Workforce Protections Subcommittee, call the appointment disappointing. “It is beyond belief that President Biden has chosen to renominate his failed nominee. The Senate rejected Julie Su as Labor Secretary on a bipartisan basis last year because of her gross mismanagement and anti-worker agenda.”
The Senate sent back more than 50 nominations to President Joe Biden as it wrapped its work for 2023, most notably that of acting Labor Secretary Julie Su.
Those nominees will have to be resubmitted by the president and begin the Senate confirmation process anew, since the chamber didn’t approve them within the calendar year.
Truckers Integral to Our Economy is a 501©4 dedicated to the preservation of the independent contractor model in the trucking industry. For more information, contact Scott Brenner @ sbrenner@crshq.com or www.truckerchoice.org.