Many recent trucking-industry news reports have highlighted the passage of H.R. 2474, the Protecting the Right to Organize (PRO) Act, through the U.S. House of Representatives. This bill, which garnered support from 215 Democratic and 3 Republican cosponsors, would establish several new federal provisions surrounding the use of independent contractors.
Particularly related to trucking, the bill would reinforce in federal law the “ABC test” to determine whether an individual is an employee rather than an independent contractor, similar to California’s AB5 law that is currently being challenged in the courts.
While the PRO Act’s movement through the House has created much commotion in the trucking world, TCA and our industry partners do not see much cause for concern. The bill has a tremendous uphill battle to pass the Republican-controlled Senate. Furthermore, according to a statement issued by the White House in early February, the bill would be vetoed by President Trump if it did pass.
However, this likely inaction at the federal level does not mean that the industry is out of the woods on threats to the longstanding independent contractor model. In addition to California’s AB5, New Jersey is seriously considering similar legislation this year, with rumors of a bill also coming out of New York. Our industry will continue to fight this state-by-state patchwork of laws as the courts have repeatedly ruled that they are preempted under the Federal Aviation Administration Authorization Act of 1994 (F4A), which prohibits states from undermining federal deregulation of interstate commerce.
Reflecting the uptick in concern over the independent contractor model, TCA’s Annual Convention, March 1-3 in Orlando, FL, will feature numerous discussions on this topic. Ryan Kelly, CEO of Openforce, will explain how truckload carriers can proactively develop defensive barriers to survive California’s AB5 and the ABC test. Bernie Clegg, Vice President of Transportation at CoEfficient Underwriters, will discuss the various insurance options available to carriers to cover independent contractors. And TCA’s Independent Contractor Practices Policy Committee will host Shawn Yadon, CEO of the California Trucking Association, for an in-depth look at the current legal battle against AB5 and what carriers across the country should be doing in response.
Independent contractor issues will continue to proliferate. As such, the industry must stay vigilant to fight off these attacks on a successful business model which significantly benefits the very drivers who choose to take advantage of it.