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An article from
Dive Brief


LABOR DEPARTMENT SWITCHES 2021 INDEPENDENT CONTRACTOR RULE

The new rule relies on a “totality-of-the-circumstances analysis” of a worker’s
job, instead of a “core factors” review in the 2021 rule.

Published Jan. 9, 2024
David Taube Reporter
 * 
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The Department of Labor unveiled its final version of an independent contractor
rule this week, upending a 2021 rule. 4kodiak via Getty Images
Listen to the article 3 min
This audio is auto-generated. Please let us know if you have feedback.


DIVE BRIEF:

 * In rulemaking hotly debated by the trucking industry, the Labor Department
   plans to shift the way it handles an economic reality test developed by the
   Supreme Court, regulators said.
 * The rule rescinds the 2021 Independent Contractor Rule, which determined that
   independent contractors are not employees under the Fair Labor Standards Act
   and not subject to minimum wage, overtime or recordkeeping requirements,
   according to a regulatory filing.
 * “Instead of using the ‘core factors’ set forth in the 2021 IC Rule, this
   final rule returns to a totality-of-the-circumstances analysis of the
   economic reality test in which the factors do not have a predetermined weight
   and are considered in view of the economic reality of the whole activity,”
   the filing said.





DIVE INSIGHT:

The 2021 Independent Contractor Rule was developed under former President Donald
Trump, and the shift underlined the difference in labor policies between the
former and current administrations.

“In contrast to prior guidance and contrary to case law, the 2021 IC Rule
designated two of the five factors—the nature and degree of control over the
work and the worker’s opportunity for profit or loss—as ‘core factors’ that
should carry greater weight in the analysis,” regulators said in the filing.

The new rule notes six factors involved in the classification, according to a
news release:

 * worker’s opportunity for profit or loss
 * financial stake and nature of resources a worker has invested
 * degree of permanence of the work relationship
 * degree of control an employer has over the work
 * whether the work is essential to the employer’s business
 * worker’s skill and initiative

“The Department believes that this approach is the most beneficial because it is
aligned with the Department’s decades-long approach (prior to the 2021 IC Rule)
as well as with federal appellate case law, and is more consistent with the
Act’s text and purpose as interpreted by the courts,” regulators said in the
filing.

The rule carries overtures of California’s ongoing dispute over AB5 and its
impact on independent contractors in the trucking industry. Jessica Looman,
administrator of DOL’s Wage and Hour Division, said that the final rule does not
adopt an “ABC” test, a framework that jurisdictions including California have
adopted in order to determine independent contractor status.

The filing, revealed Tuesday in an “unpublished” version, will become effective
60 days after its official publication in the Federal Register, slated for
Wednesday.

A precursor to the final rule, a notice of proposed rulemaking, unveiled the
shift in 2022 and generated over 54,000 comments, drawing opposition from the
American Trucking Associations and the Truckload Carriers Association.

The ATA continued that rebuke Tuesday. President and CEO Chris Spear said the
Biden administration “has chosen to replace a clear and straightforward standard
with a tangled mess” that will weaken the nation’s workforce.

HR Dive Senior Reporter Ryan Golden contributed to this report.


RECOMMENDED READING

 * Trucking groups question, resist Biden’s labor nominee over AB5 By Colin
   Campbell • March 17, 2023

 * post
 * share
 * tweet
 * print
 * email

Filed Under: Regulation, Labor


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EDITORS’ PICKS

 * Bim via Getty Images
   
   
   POTENTIAL FREIGHT REBOUND FACES BARRIERS IN 2024, ANALYSTS SAY
   
   Reducing excess capacity is not enough to spur a freight rebound on its
   own, experts said.
   
   By David Taube • Dec. 22, 2023
 * Courtesy of Daimler Truck
   
   
   HYDROGEN FUEL-CELL TRUCK TESTING THIS YEAR CONNECTS DAIMLER, AMAZON AND
   OTHERS
   
   Daimler Truck will deploy the GenH2 trucks for their first customer fleets,
   serving Amazon, Holcim, Air Products and others on long-haul tests in
   Germany.
   
   By Iulia Gheorghiu • Jan. 3, 2024


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newsletter.



MOST POPULAR

 1. PS Logistics acquires Buddy Moore Trucking, ELS flatbed division
 2. Trucking equipment regulations to watch in 2024
 3. Amid lawsuits, states still need to report greenhouse gas targets, FHWA says
 4. $36M discrimination verdict against Werner reduced to $335,682


LIBRARY RESOURCES

 * Playbook
   A Solution for Reducing Perishables Shipments Loss Custom content for Tive,
   Inc.
 * Webinar - on demand
   Delivering on the Promise of Last Mile Excellence Custom content for FRAYT
 * Playbook
   How to Turn Last Mile Delivery Into a Competitive Advantage Custom content
   for FRAYT

View all


COMPANY ANNOUNCEMENTS

 * Craig Fuller, Freightwaves, joins REPOWR board From REPOWR
 * Sonsray Acquires Thermo King Southern Connecticut From Sonsray
 * Noregon Announces Darren Mangus as President and Chief Operating Officer From
   Noregon Systems, LLC

View all | Post a press release


WHAT WE’RE READING

 * FleetOwner Truck parking 2024 outlook: optimistic but no miracles
 * Truckinginfo FTR Forecasts Only Incremental Freight Market Improvement in
   2024
 * Transport Topics Court Approves Sale of 23 Yellow Leased Terminals

View all


EVENTS

 * 01 FEB
   Webinar | 2 p.m. ET Why Collaboration is Key to Building a Future-Proof
   Workforce Presented by studioID and Intersect Illinois




TRUCKING DIVE NEWS DELIVERED TO YOUR INBOX

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   our Terms of Use and Privacy Policy. You can unsubscribe at anytime.

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newsletter.



COMPANY ANNOUNCEMENTS

View all | Post a press release
Craig Fuller, Freightwaves, joins REPOWR board
From REPOWR
January 17, 2024
Sonsray Acquires Thermo King Southern Connecticut
From Sonsray
January 05, 2024
Noregon Announces Darren Mangus as President and Chief Operating Officer
From Noregon Systems, LLC
January 05, 2024
Editors’ picks
 * Bim via Getty Images
   
   
   POTENTIAL FREIGHT REBOUND FACES BARRIERS IN 2024, ANALYSTS SAY
   
   Reducing excess capacity is not enough to spur a freight rebound on its
   own, experts said.
   
   By David Taube • Dec. 22, 2023
 * Courtesy of Daimler Truck
   
   
   HYDROGEN FUEL-CELL TRUCK TESTING THIS YEAR CONNECTS DAIMLER, AMAZON AND
   OTHERS
   
   Daimler Truck will deploy the GenH2 trucks for their first customer fleets,
   serving Amazon, Holcim, Air Products and others on long-haul tests in
   Germany.
   
   By Iulia Gheorghiu • Jan. 3, 2024

Latest in Regulation
 * Amid lawsuits, states still need to report greenhouse gas targets, FHWA says
   By David Taube
 * $36M discrimination verdict against Werner reduced to $335,682
   By David Taube
 * Trucking equipment regulations to watch in 2024
   By David Taube
 * Labor Department switches 2021 independent contractor rule
   By David Taube

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