There has long been a tension over the issue of independent contractor versus employee status.
At what point is a given worker an employee? Are truckers being deprived of employee benefits? What regulations should be created to deal with this question?
In California, the battle rages on. The state’s AB 5 law, which took effect in 2020, now classifies many owner-operators as employees.
The California Trucking Association (CTA) fought the designation and was granted an injunction, but a reversal was issued in April, stating motor carriers were not exempt from the law. The latest salvo came in May with CTA’s motion to review the three-judge panel’s decision.
Although Matt Patterson, senior transportation manager for Sunrise Logistics, Inc., BB #:192796 based in Ephrata, PA, says the idea behind federal policies in this area was well intentioned, “it was meant to support independent contractors who were working full-time for a single company, but not compensated fairly or given benefits due to their 1099 status.
“However,” he continues, “the concern is that the number of occurrences is minimal when compared to the near 400,000 independent truck drivers in the United States.
“Now you have a much larger percentage of independent contractors potentially being forced to become employees of a larger organization—and to give up their ability to work with multiple customers, negotiate their own rates, control their schedule, etc. Additionally, you risk many small businesses shutting their doors, as their operations rely heavily on independent contractors.”
Federal policy governing employee status tends to shift according to the political party in power: overall, Republican administrations have been more favorable to independent contractor status, whereas Democratic administrations have inclined more to the employee status approach.
How this will play out in the next few years remains, of course, to be seen.
This is an excerpt from the Transportation & Logistics Supplement to the July/August 2021 issue of Produce Blueprints Magazine. Click here to read the whole supplement.
