As the U.S. Department of Labor continues to “persuade” the states into participating in their Employee Misclassification Initiative, by offering money to states that support their initiatives, many states are joining the parade. Here is a list of just some of the current bills being introduced, across the country, attacking independent contractors.
California: Bill Attempts to Persuade Drayage Carriers to Convert Independent Contractors to Employees. On February 24, 2015, Assembly Member Roger Hernandez (D) introduced Bill 621 titled Drayage Truck Operators. Assembly Bill 621 would relieve drayage carriers of statutory and civil penalties associated with the misclassification of independent contractors if they enter into a consent decree with the Labor Commissioner prior to January 1, 2017 to convert their independent contractors to employees. But, the Bill would not apply to a carrier that has a pending civil lawsuit against it in state or federal court alleging misclassification of drivers, where the lawsuit was filed prior to January 1, 2015.
Iowa: Bill Increases Penalties for Willful Misclassification. Iowa Rep. Bruce Hunter (D) recently introduced Bill 72 titled Employee Wage Misclassification. This Iowa House Bill is an Act increasing certain penalties for employers willfully misclassifying employees for unemployment compensation contribution purposes.
Ohio: Bill Creates Uniform Independent Contractor Test. Ohio Senator Kenny Yuko (D) introduced Bill 25 titled Minimum Wage Raise. The Bill proposes to create a uniform standard to determine whether an individual performing services for an employer is an employee.
Washington: Two New Bills Address Misclassification and the Underground Economy. Washington State House Representative Riccelli (D) introduced Bill 1519 on January 21, 2015 and Senator Frockt (D) introduced companion Bill 5566 on January 22, 2015. Under these Bills, there would be two “scenarios” to determine if someone is an independent contractor. Scenario #1 – if all three of these provisions are true:
1) The individual is and will continue to be free from control or direction over the performance of the labor or services by the primary party. Control or direction includes the right to control or direct as well as general control or direction over the individual’s physical activities;
2) The labor or service is either outside the usual course of business for which the labor or service is performed, or the labor or service is performed outside of the places of business of the enterprise for which the labor or service is performed;
3) The individual is customarily engaged in an independently established business, profession, trade or occupation of the same nature as that involved in the contract of labor or service.
Or, Scenario #2 – all ten of these provisions must be true:
1) The individual is and will continue to be free from control or direction over the performance of the labor or services by the party for whom the labor or services are performed;
2) The individual’s business is not financially dependent on the primary party;
3) The individual has a substantial investment of capital in the individual’s business beyond ordinary tools and equipment and a personal vehicle;
4) The individual gains profits and bears losses from the business as a result of his or her own managerial skills and substantial investment of capital in the individual’s business;
5) The individual makes his or her labor or services available to the general public or the business community on a continuing basis;
6) The individual files at the next applicable filing period, both under the contract of service and in fact, a schedule of expenses with the IRS for the type of business the individual is conducting;
7) The party for whom the labor or services are performed does not represent the individual as an employee of that party to its customers;
8) The individual has the right to perform similar labor or services for others on whatever basis and whenever he or she chooses;
9) The individual has an active and valid certificate of registration with the department of revenue and an active and valid account with any other state agencies as required by the particular case, for the business the individual is conducting, for the payment of state taxes normally paid by employers and businesses and has registered for and received a unified business identifier number;
10) The individual is maintaining a separate set of records that reflect all income and expenses of the business that the individual is conducting.
FMCSA DELAYS SOME UPCOMING RULINGS
Electronic Logging Device Mandate: The projected publication date for a Final Rule to mandate use of electronic logging devices by all drivers required to keep records of duty status has been pushed back to November 9, 2015. The rule will take effect two years after its publication date in the Federal Register, which, with any more delays, could be in 2016 – pushing the rule’s compliance deadline into 2018.
Speed Limiter Mandate: The DOT has pushed back the projected publication date of a rule to require the use of speed limiters on heavy trucks to June 8, 2015. The rule is being produced by FMCSA and the National Highway Traffic Safety Administration, but neither agency has said what the limited speed would be after the mandate takes effect. The upcoming rule will be published as a Notice of Proposed Rulemaking and would include a public comment period prior to the agency’s production of a Final Rule.
CDL Drug & Alcohol Clearinghouse: The Drug and Alcohol Clearinghouse rule is now projected to be published December 14, 2015. The rule will institute a database of drivers who have failed or refused to take a drug or alcohol test. Carriers will be required to upload this information into the clearinghouse and query it when making new hires. The projected date is for the Final Rule, which will go into effect 18 months after its publication in the Federal Register.
Safety Fitness Determination: A rule to institute the next step in the agency’s Compliance, Safety, Accountability (CSA) program – the Safety Fitness Determination – is now projected to be published July 1, 2015. This Safety Fitness Determination would allow FMCSA to use ratings from CSA’s Safety Measurement System BASICs, along with data from investigations and inspections, to produce a score for carriers, which it would use to target carriers for intervention.
Prohibition of Driver Coercion: This rule, which will impose penalties on carriers, shippers, brokers and other entities that coerce operators to drive in violation of federal safety rules, is still projected to be published on September 10, 2015. The agency published a proposed rule last year, and the Final Rule would then take effect after it is published in the Federal Register.