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DOL withdraws Trump administration letter on driver classification issues

Larger issue is rule that letter relied upon isn’t going into effect until March and may never be implemented

Photo: Jim Allen/FreightWaves

An opinion letter issued in the final days of the Trump administration that sought to clarify some specific issues on classifying independent truck drivers has been withdrawn by the Biden administration. 

The stated reason for the withdrawal by the Department of Labor is that the opinion letter handed down by the DOL’s Wage & Hour Division (WHD) relied on a rule that had not gone into effect, an apparent reference to the broader DOL guidelines released earlier this month on independent contractor classification. That rule is on the clock to go into effect in early March but the expectation is that it will also get yanked by the Biden administration.

The opinion letter on independent truck drivers was one of four the WHD issued just before the inauguration of Joe Biden as president. The action by the DOL in yanking the trucking-related opinion was one of three that was withdrawn. One of the three was posted the same day as the trucking opinion letter; it was not immediately clear when the third letter was posted. 

But notably, two of the four letters posted the same day as the trucking-related letter have not been withdrawn so the trucking-related withdrawal was not part of a sweeping move that reversed rulings across the board. 

“These letters were issued prematurely because they are based on rules that have not gone into effect,” the DOL said in its statement. “These letters may not be relied upon as statements of agency policy as of the date of withdrawal.”

In the opinion letter sent out by WHA administrator Cheryl Stanton and announced to the public Jan. 19, the day before the inauguration, several references were made to the broader DOL rule on independent contractor classification. Stanton cited that rule several times in the opinion letter. However, that rule does not go into effect until March 8. 

Not only that, but the broader rule itself is viewed as more favorable to allowing an employer to define a worker as an independent contractor rather than an employee. Given that, there is a strong sentiment among attorneys who follow employee classification law that the broader DOL rule was likely to be withdrawn before March 8.

The now-withdrawn letter from Stanton dealt with two specific issues that had been brought to the WHD, though the parties that had sought clarification were not identified by name. 

In one case, a question was raised about whether an independent owner-operator hired by a trucking company who was then forced to comply with certain legal and safety rules would by definition need to be seen as an employee rather than a contractor. 

The second case involved questions of whether an independent owner-operator hired by a 3PL but required to perform several different top-down functions, like drive with the 3PL’s logo or follow designated routes, would be considered employees or independent contractors. 

In both cases, according to the Stanton letter, they would be considered independent contractors, with the guidelines of the new DOL rule cited as a factor in WHD making its determination. But that is the rule that is to go into effect in early March; it isn’t in effect now.

What isn’t clear is whether the decision to put the opinion letters on ice was driven strictly by the fact that the DOL rule was cited before the March 8 formal launch or whether the fact that the rule may be withdrawn anyway was a factor as well. 

Emails to media representatives at DOL were not responded to by publication time. 

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.