January 21, 2021: By: Joseph G. Harraka, Jr., Esq. Co-Practice Leader, Trucking and Logistics
On January 19, 2021, the U.S. Department of Labor, Wage and Hour Division (“DOL”), issued Opinion Letter FLSA2021-9, directly addressing independent contractors and owner-operators under the newly issued rule published on January 7, 2021 (effective March 8, 2021) setting forth the standard for determining independent contractor status. In the Opinion Letter, the DOL addressed two questions: (1) whether requiring tractor-trailer drivers to implement safety measures that are required by law constitutes control by the carrier for purposes of determining whether the drivers are independent contractors or employees, and (2) whether, based on the factual scenario provided, owner-operators are properly classified as independent contractors.
With regard to the question (1), the DOL noted that carriers are responsible for ensuring driver compliance with the FMCSARs and that the Federal Truth-in-Leasing regulations also “prescribe conditions under which drivers may lease trucks and provide services to a carrier, requiring the carrier to assume responsibility for the operation of the equipment. These regulations impose safety requirements for the operation of trucks for which both the driver and carrier are responsible.” The DOL was then presented with four (4) scenarios:
Carrier requires drivers to install and use a video-based onboard safety system with the carrier paying for same;
Carrier requires drivers to install an onboard safety monitoring system that monitors sensor and engine data with the carrier paying for same;
Carrier requires driver to install and use a GPS-based speed limiter with the driver paying for same; and
Carrier has mandatory monthly safety meetings and quarterly reviews and requires successful completion by driver of a quarterly online safe-driving course at the carrier’s expense.