On Sept. 22, the U.S. Department of Labor (DOL) proposed “unprecedented” rules regarding worker classification that may impact transportation companies. The DOL has created a new framework for what is being called an “economic reality” test to determine whether a worker is truly an independent contractor.

Instead of broadly using the seven factors from the current “economic reality” test, the DOL is proposing giving two “core factors” the most relevance. Three “guidepost factors” may be used as a tie-breaker in making a determination.

The core factors include the nature and degree of the worker’s control over the work performed; and the individual’s investment and opportunity for profit or loss. If an analysis of the core factors does not provide a clear answer regarding classification status, the “guidepost factors” will be used.

The guidepost factors for a “tie-breaker” include:

  • The amount of specialized training or skill required for the work that the potential employer does not provide
  • The degree of permanence of the working relationship, focusing on continuity and the duration of the relationship – including whether it should be considered long-term or sporadic
  • A determination of whether the work is merely part of production rather than “integral” to the potential employer’s production

For more information on the DOL announcement, please Click Here.

Source: Windels Marx

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