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Mar
2013
19

Bills to Properly Classify Truck Drivers Moving Through NJ, KY, WA, OR, AK Statehouses



Across the country, port drivers are misclassified as independent contractors so that their employers can avoid providing them proper benefits (among other injustices). But the widespread nature of this anti-worker practice may finally have found its positive result: it’s so widespread that it’s spurring legislative efforts to crack it down.

In a recent rundown of anti-misclassification efforts, Keith Goble of Land Line digs into the details of who does and does not support this sweeping change. He discovered an exmaple in New Jersey of a driver who opposes the idea of being classified as an employee:

New Jersey lawmakers are discussing legislation that would deem port truckers, including owner-operators going onto a port, to be employees.

Citing concerns that drayage and parcel truckers in the state are being misclassified, Sen. Loretta Weinberg, D-Bergen, is pushing a bill to include stiff penalties for employers who misclassify employees as independent contractors.

Shortly after the bill was introduced a year ago, OOIDA and more than 20 other truck and business groups joined together to oppose the bill. They say the changes sought would discourage any involvement with independent contractors.

Gail Toth, executive director of the New Jersey Motor Truck Association, spoke at a recent hearing in opposition to the bill. She told lawmakers that bill supporters “are trying to create a perception that owner-operators, independent contractors, want to be employees.”

Owner-operator and OOIDA Member Ted Millard of Hillsborough, NJ, testified at the hearing. The longtime drayage operator refuted claims that port truckers want the security of being employees.

“I’ve been a self-employed contractor since 1977. I was able to raise a son and a daughter and put them through college,” Millard said. “Everything is good. Ninety-nine percent of my work is drayage. I’ve never run into a problem.”

For the most part, though, there is consensus among drivers and worker advocates about the negative impact of misclassification. Last October, New Jersey Assembly Deputy Speaker Wisniewski said of his state’s efforts:

By misclassifying workers, an employer can avoid paying certain taxes like Social Security, Medicare and unemployment. This is not the way to do business. This bill spells out what constitutes an employee versus an independent contractor to prevent unscrupulous companies from denying employees the benefits and protections they are entitled to.”

Similar legislation is being proposed in Kentucky, Washington, Oregon and Arkansas.

Two bills being proposed in Washington look to make changes to the employment status of port drivers. In lock step, the trucking industry is resisting:

Washington state lawmakers are considering two bills to overhaul the state’s definition of independent contractors and reclassify certain port truckers as employees.

The first bill would rewrite the definition of an independent contractor. Specifically, an employer-employee relationship would be presumed when services are performed for pay.

Rep. Ed Orcutt, R-Kalama, recently testified that the bill simply doesn’t work.

“There are way too many problems with this bill. It doesn’t solve the problem people are talking about, and it ultimately would create more problems.”

Effectively prohibiting owner-operators from the ports, another bill would deem drayage truckers going onto the ports of Seattle and Tacoma to be employees of the facilities, with the exception of agricultural haulers.

In Oregon, funding is being provided to create new investigators to enforce current rules. This strategy is a great starting point for legislatures who might have trouble amending actual law. State governments frequently have laws in place — not only in the area of misclassification, but more generally — that they are unable to properly enforce due to funding. Updating definitions and the framework for proper classification remains crucial, though:

in Oregon, a House bill would set up a full-time position for investigating claims of misclassification of employees as independent contractors. It also spells out what actions could result in fines for employers but it doesn’t specify the amounts.

In Arkansas, legislation centers around workers’ compensation:

This legislation requires motor carriers to offer workers’ compensation insurance to its owner-operators and owner-operators must be covered by workers’ compensation, although the owner-operator does not have to use the coverage offered by the carrier. If an owner-operator is covered by the carrier’s workers’ compensation, it will not terminate the driver’s independent contractor status.

With similar legislation making its way through Illinois and Connecticut, the trucking industry is in flux, caught between a business lobby that prefers the unchecked status quo and a sprawling, nascent set of advocates for a correctly classified workforce. Understanding the pitfalls of misclassification for workers and governments alike will ultimately prove to be central to affecting change. For more background, click through to out our semi-longread on the subject: TRIPLE JEOPARDY: Misclassification Doesn’t Just Cost Workers Wages, It Robs Government of Revenue and Local Business of a Chance to Compete

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