From Lexology, Linda Auerbach Allderdice, Lawrence J. “Larry” Hamilton II and Michael T. Maroney of Holland & Knight LLP warn that businesses should continue to be careful and properly classify workers as employees or independent contractors. They write:
Our earlier article (see Holland & Knight’s alert, “Will Trump Administration Curb the Recent Targeting of Independent Contractors?“, Jan. 17, 2017) addressed whether the Trump Administration would attempt to turn the tide and promote regulatory and legislative initiatives that would favor the independent truck driver as a small business or shun the mantle of federal regulation in favor of a state’s right to regulate the way in which the interstate trucking business is conducted. As its first 100 days comes to a close, the Trump Administration has not, as yet, reigned in the Obama Administration’s targeting of the independent contractor model. However, the battle wages on in the courts and in Congress.
As previously reported, the defense of pre-emption under the Federal Aviation Administration Authorization Act of 1994 (FAAAA) has not completely shielded motor carriers from lawsuits alleging that the use of independent contractor truck drivers violates state wage and hour laws. Nonetheless, motor carriers continue to assert the defense. See, e.g., Remington v. J.B. Hunt Transport, Inc., C.A. No. 15-10010 (D. Mass.), Dkt. No. 67 (motion for judgment on the pleadings based in part on FAAAA preemption pending). In addition, it appears that the Senate Committee on Appropriations is considering new legislation aimed at addressing some of the FAAAA pre-emption issues that have arisen recently.
Meanwhile, many are disappointed that the U.S. Department of Labor and the National Labor Relations Board have not yet signaled a reversal of course on the Obama-era positions assailing the independent contractor model. Private litigation also continues to challenge the independent contractor model traditionally used by motor carriers while settlements of long-standing litigation have been reported at a faster pace. Moreover, as long as states continue to encourage targeting companies that operate with independent contractors, it will be difficult to put the genie back in the bottle even if the federal government does back off on the issue.