The Evolving Environment for Independent Contractor Utilization Under the Biden Administration
While many were optimistic about the trajectory of the Independent Contractor (IC) model in early 2021, a significant focus for the Biden Administration early on has been unwinding many Trump-era policies regarding employment-related laws and IC status.
On January 6, the Department of Labor issued a final rule that clarified the interpretation of IC status. The new rule, which was scheduled to go into effect on March 8, was generally seen as favorable to motor carriers contracting with IC's, as a five-factor test would be implemented to determine IC status, as opposed to a more stringent ABC test. Additionally, the Department of Labor issued an opinion letter, which supported motor carriers imposing safety requirements on IC's without jeopardizing their status, signaling another "win" in the arena of IC classification.
However, President Biden's first 100 days in office were busy with a significant amount of activity driving executive orders and other actions that impact determinations of employee vs. IC status. In late January, the Department of Labor withdrew their January 19 Opinion Letter, and also put a hold on all new regulations that have not gone into effect, which includes the IC classification ruling slated for March 8. Other appointments made by President Biden offer additional insight into the administration's perspective and agenda toward companies using an IC workforce, including Marty Walsh, former Boston mayor and union leader being named U.S. Secretary of Labor under the Biden Administration.
The political landscape continues to evolve and the tides may be starting to shift with regard to worker classification. To that end, it is very important for motor carriers to review their IC risk management practices to ensure they are operating with a protected IC model.
TrueNorth's Asset Light Risk Solutions practice is committed to helping transportation companies protect and maximize their utilization of independent contractors. Contact our team today to learn more.
TrueNorth Principal & Asset Light Practice Leader
This publication has been prepared by TrueNorth Companies, L.C. and is intended for informational purposes only. Transmission of this publication is not intended to create, and receipt does not constitute, a client relationship with TrueNorth Companies, L.C. This publication does not constitute any type of representation or warranty, and does not constitute, and should not be relied upon as, legal advice. This publication is not a contract and does not amend, modify or change any insurance policy you may have with an insurance carrier. © 2021 TrueNorth Companies, L.C. All rights reserved.