Proposed Rule, Employee or Independent Contractor Classification Under the Fair Labor Standards Act
Updated: Apr 14
On December 13, 2022, REAL Women in Trucking submitted a comment to the federal register regarding worker classification as it relates to truck drivers.
We wanted to share the essence of our comment here on our website and provide this PDF link to the letter that was sent in support of the Department of Labor’s (Department) Proposed Rule on Employee or Independent Contractor Classification Under the Fair Labor Standards Act (FLSA).
The Proposed Rule would rescind a rule promulgated in 2021 (the 2021 Rule) and replace it with the traditional six-factor test to assess the economic reality of a worker’s classification. We support this rulemaking, which we anticipate will reduce misclassification in the trucking industry.
REAL Women in Trucking is a non-profit group formed by seasoned female commercial motor-vehicle drivers who saw the need for authentic representation for women in the trucking industry. Our organization encourages ethical corporate business practices and improved industry standards, including compensating workers for all work performed, and treating people of all genders equally when it comes to hiring, training, paying, and promoting motor vehicle drivers. Women truck drivers are at particular risk of wage theft from skimming and working uncompensated hours. They are also susceptible to exploitation by being misled into lease purchase truck arrangements as well as discrimination, retaliation, sexual harassment, and assault.
Truck drivers are frequently misclassified as independent contractors, with harmful consequences. Pervasive misclassification has driven down wages for all drivers and those who are misclassified are more likely to drive non-compliant trucks and violate safe driving requirements. Misclassification happens at companies that are often committing other labor abuses. Drivers can become trapped in these unsafe, noncompliant situations. Drivers who lease trucks directly from the company are under intense economic pressure to continue working though they are not turning a profit. As we have observed, since these drivers have limited choices, they move from one misclassified job to the next. These misclassified drivers have less economic security and cannot rely on retaliation protections the Fair Labor Standards Act (FLSA) would provide for complaints.
The Proposed Rule’s six-factor economic reality test will reduce driver misclassification, but additional clarification with respect to truck drivers would be helpful since variations in working arrangements between drivers and companies, make it difficult to identify a bright line rule.
At one end of the spectrum are owner-operators who operate under their own authority (a motor carrier’s permission to operate a commercial motor vehicle for-hire), own or independently lease or finance their truck, and are registered on their International Registration Plan (IRP) plate (a vehicle registration agreement between states). These operators book their own freight from a free-market load board and negotiate the rate for the freight directly. They carry their own insurance. These drivers are independent contractors.
At the other end of the spectrum are drivers who operate trucks leased directly from the company (or a corporate partner of the company). If they cannot make the lease payments, become ill or lose their jobs, they also lose their trucks. These drivers operate under the company’s authority and access insurance and other compliance requirements through the company. These drivers are permitted to carry loads only for the company, they cannot negotiate rates, and have little control over scheduling. They may be subject to forced dispatch. These drivers should be considered employees but are frequently misclassified.
While these two scenarios are clear, many drivers have working arrangements in the grey area between them. They may, for example, own their own truck and negotiate their own loads but rely on a company for their operating authority and other compliance requirements. Others may have the formal ability to set their own schedule and work for others, but because of conditions imposed by the company, they are functionally unable to do so. Unscrupulous employers take advantage of uncertainty about classification status in these grey areas and the economic pressure drivers face to find work.
The Proposed Rule helps provide much needed clarity for the industry. Its recognition that there are numerous factors to consider in whether an employee is economically dependent is reflective of our experience.
We would also appreciate the Department clarifying that, although truck driving typically is not classified as “skilled” labor in other contexts, it requires sufficient skill that, when combined with business-like initiative, drivers are appropriately considered independent contractors. We believe this clarification is consistent with the Department’s analysis of this factor. We encourage all to read our letter in its entirety to understand our position on this subject and wish to thank Robin Thurston at Democracy Forward Foundation for helping us draft our comment.