Transportation Law News

October 27, 2009

As the ongoing debate over health care reform has proven time consuming, The US Congress will likely handle transport legislative initiatives in 2010. Expect consideration to be given to a broad variety of issues including contractor classification.

The classification of workers issue (either independent contractors or employees) is of particular interest to Transportation Law. Federal Express’s Ground Division (formerly RPS) has long been on in fight to keep its independent contractor model. Some courts have ruled those workers as employees. This has forced FedEx to change routing requirements in California and elsewhere.

Robert Digges, deputy general counsel for the American Trucking Association, said the the political atmosphere “is very treacherous” for truckers utilizing independent contractors. 23 states are currently concerned about misclassification of employees as independent contractors with implications to payroll taxes. The unions are also interested in the issue as independent contractors are potentially a rich area for union organizing. There is an upcoming bill, H.R. 3408, which would allow the Internal Revenue Service to rescind independent contractor provision and would allow for reclassification of workers going forward. These rules would be very disruptive to motor carriers, and would be very expensive for independent contractors.

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