FMCSA HOS Changes + Will ICs Survive Friday the 13th?
In this article I’m writing about two substantially important potential developments in Trucking and Transportation. Neither of these matters have been finalized yet, however, because of their great importance and future implications, all trucking companies need to keep these matters on their radar because they could profoundly affect their businesses. And finally, I want to comment on a potential escape hatch should doomsday arrive this Friday.
The FMCSA May change hours of service much-maligned rules that have been in place since 1937
I might as well start off this article with some good news: The FMCSA has proposed five changes to the hours – of – service rules. Back in the days before Big Brother and his ELD gizmo decided to catch a ride with every long-haul trucker in America, outlaw truckers utilized numerous creative ways flout HOS rules. As we all know, those days came to a crashing halt with ELD’s.
However, The ELD mandate resulted in numerous criticisms and real-world problems faced by the people in the driver’s seat. The bulk of these complaints related to safety and flexibility, such as being forced to park in unsafe places and recklessly trying to beat the clock. Apparently, the FMCSA has listened and has laid out a new proposal.
“This proposed rule seeks to enhance safety by giving America’s commercial drivers more flexibility while maintaining the safety limits on driving time,” said U.S. Transportation Secretary Elaine L. Chao.
“Based on the detailed public comments, FMCSA’s proposed rule on hours of service offers five key revisions to the existing HOS rules:
The Agency proposes to increase safety and flexibility for the 30 minute break rule by tying the break requirement to eight hours of driving time without an interruption for at least 30 minutes, and allowing the break to be satisfied by a driver using on duty, not driving status, rather than off duty.
The Agency proposes to modify the sleeper-berth exception to allow drivers to split their required 10 hours off duty into two periods: one period of at least seven consecutive hours in the sleeper berth and the other period of not less than two consecutive hours, either off duty or in the sleeper berth. Neither period would count against the driver’s 14-hour driving window.
The Agency proposes to allow one off-duty break of at least 30 minutes, but not more than three hours, that would pause a truck driver’s 14-hour driving window, provided the driver takes 10 consecutive hours off-duty at the end of the work shift.
The Agency proposes to modify the adverse driving conditions exception by extending by two hours the maximum window during which driving is permitted.
The Agency proposes a change to the short-haul exception available to certain commercial drivers by lengthening the drivers’ maximum on-duty period from 12 to 14 hours and extending the distance limit within which the driver may operate from 100 air miles to 150 air miles.”
The new rules “would not increase driving time and would continue to prevent CMV operators from driving for more than eight consecutive hours without at least a 30-minute change in duty status.”
People wishing to submit comments before the window soon closes can look here: https://www.federalregister.gov/documents/2019/08/22/2019-17810/hours-of-service-of-drivers.
The day of reckoning is upon us: Will the Dynamex ABC test become law this week and turn Owner-Operators and the trucking companies who use them into criminals?
After The California Supreme Court radically changed the definition of an independent contractor in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, trucking companies were thrown into a state of turmoil, but our politicians were thrown into a state of ecstasy. Indeed, California democrat politicians felt the court’s decision was the greatest thing since sliced bread. As such, they quickly went to work to “codify” the extremely restrictive ABC test. Notably, The court’s decision only applied to Industrial Welfare Commission Wage Orders, and excluded claims brought under the Labor Code or Unemployment Insurance Code. Undaunted, California politicians felt they could make a “good” idea even “better” by making sure AB 5 will apply in any circumstance and criminalize the behavior of the majority of trucking companies and truck drivers in California.
While doctors, dentists, lawyers and other professionals were able to secure an exception to the “ABC Test” in AB 5, The trucking industry has not been successful in securing an exception. And it looks like they won’t. AB 5 cleared a committee last Friday in the state Senate and it is expected to pass both houses of the legislature before lawmakers adjourn Friday, September 13. Furthermore, governor Newsom has promised to sign the bill into law.
Unfortunately, this will likely drive owner-operators and the businesses who rely on them out of business or force them to operate illegally until they get caught.
“The light at the end of the tunnel is just the light of an oncoming train.” Robert Lowell.
On that pessimistic note, I urge my readers to take what I am about to say next with reluctant optimism. Is there language in AB 5 that owner-operators, and the trucking companies who rely on them, can exploit to exempt O-Os from the ABC test? Specifically, there is language in AB5 which states the holding in Dynamex will not apply to bona-fide business-to-business contracting relationships between sole proprietors, partnerships, LLCs, and corporations. In such cases, the old Borello or “common law” test will determine whether someone is an employee or independent contractor. However, this will only apply if certain criteria are satisfied, which include:
(A) The business service provider is free from the control and direction of the contracting business entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The business service provider is providing services directly to the contracting business rather than to customers of the contracting business.
(C) The contract with the business service provider is in writing.
(D) If the work is performed in a jurisdiction that requires the business service provider to have a business license or business tax registration, the business service provider has the required business license or business tax registration.
(E) The business service provider maintains a business location that is separate from the business or work location of the contracting business.
(F) The business service provider is customarily engaged in an independently established business of the same nature as that involved in the work performed.
(G) The business service provider actually contracts with other businesses to provide the same or similar services and maintains a clientele without restrictions from the hiring entity.
(H) The business service provider advertises and holds itself out to the public as available to provide the same or similar services.
(I) The business service provider provides its own tools, vehicles, and equipment to perform the services.
(J) The business service provider can negotiate its own rates.
(K) Consistent with the nature of the work, the business service provider can set its own hours and location of work.
(L) The business service provider is not performing the type of work for which a license from the Contractor’s State License Board is required.
Uhhh, OK – that’s about as clear as mud and will ensure years of costly litigation fighting over this. My opinion is that until the Feds or the US Supreme Court step in and preempt California law, the days of legal ICs in trucking will effectively come to an end this week. Stay in touch with Transportation Attorneys for future guidance.