CALVERTON, MD (June 20, 2023) – Various federal and state policymakers are seeking to make it more difficult for independent contractors to continue operating as small business owners. The independent contractor model is essential to the intermodal supply chain, accounting for over 80 percent of intermodal truck drivers.
On June 21, the U.S. Senate Committee on Health, Education, Labor, and Pensions (HELP) will consider the Richard L. Trumka Protecting the Right to Organize Act of 2023 (PRO Act). If passed, it could bring an end to independent contractors in the trucking industry. Ahead of this important executive session, Joni Casey, President & CEO, Intermodal Association of North America, offers the following statement:
“Independent Contractors are a vital link in the intermodal supply chain, moving cargo to and from intermodal facilities throughout the US. These owner-operators are proud, small business owners who enjoy both operational and financial flexibility. Although they have the option to secure full-time employment in the trucking industry, they have chosen to remain as independent contractors.
While the independent contractor model remains standard industry practice, recent state and federal actions are eroding its longevity and undermining its significance by chipping away at this business model. California’s Assembly Bill 5, or AB 5, established a test that essentially prohibits the use of independent contractors within the trucking industry. On June 13, the National Labor Relations Board modified its standard for determining whether workers are employees or independent contractors under the National Labor Relations Act. This new standard expands the definition of an employee, threatening the viability of independent contractors at the national level.
While the economic impacts of AB 5 in California continue to be realized, some federal lawmakers are pursuing the PRO Act which would in essence, make AB 5 the prevailing law across the nation. If this becomes law, individuals will no longer have the choice to work as independent contractors, and more than half of these entities are expected to suffer substantial and direct income loss. As the Senate HELP Committee prepares to consider the PRO Act, I urge lawmakers to consider its long-term costs. Not only does it strip drivers of the freedom to choose their own schedules and length of haul, but it would also exacerbate the ongoing national truck driver shortage by discouraging them from remaining in or joining the field, at a time when the intermodal supply chain continues to recover from recent disruptions. Congress should be considering how to incentivize drivers to enter the sector rather than passing laws that will force experienced drivers from their chosen profession.”