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Overdrive February 2019

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28 | Overdrive | February 2019 T he independent contractor classification last year took what some see as an uppercut to the chin in the California high court case of Dynamex v. Superior Court of Los Angeles. The court used what's commonly known as the "ABC test" to make the determination that light- and medium-duty local delivery contrac- tors for Dynamex had been misclassified as independent contractors. They'd been converted from W-2 employees a decade earlier. The test could have far-reaching consequences because, applied elsewhere, it could change how the Internal Revenue Service and state tax and labor departments look at self-employed owner- operators leased to carriers. Depending on how subsequent judicial and legislative actions play out, it could become much harder to work as an independent-contractor trucker in California, especially in port applications, and perhaps elsewhere. Under the ABC test, three conditions must be met to properly classify independent contractors. For trucking, it's part B that's most problematic, requiring an independent contractor to be in a field of work outside the usual course of the carrier's business. Applied broadly, any trucking entity that employs drivers in com- pany trucks but also maintains a division of independent contractors could be open to legal action for misclassifying its owner-operators. As in cases such as Dynamex, they could be subject to employee- focused wage and hour rules. California labor laws require that employers provide a 30-minute meal break every five hours at work and a paid 15-minute rest break for every four hours of work time. Few trucking companies before recent history have bothered with such regulations, given the nature of the business. However, "every state has them" in some form, says Todd Spencer, president of the Owner-Operator Independent Drivers Association. California ports are a battleground over predatory truck lease-purchase programs, which have helped prompt union organizing efforts and pushback from labor and the state. The next battle in what some view as a West Coast war on owner-operators has nothing to do with truck emissions. Instead, California's labor law developments, predatory lease-purchase practices and aggressive union organizing are making it increasingly difficult to operate, let alone thrive, as an independent contractor. Courtesy of Long Beach UNDERMINING THE OWNER-OPERATOR BY TODD DILLS CALIFORNIA'S INDEPENDENT CONTRACTOR CRISIS

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