The New Jersey Senate on Thursday approved by a vote of 21-17 a bill, called the Truck Operators Independent Contractor Act, which its sponsors say would prevent trucking companies from misclassifying truckers as a way of avoiding workers’ rights laws and the employer responsibilities, including unemployment and Social Security contributions.
Under the bill, “drayage,” or short-distance truckers and parcel delivery drivers could not be classified as “independent contractors,” unless the employers can show these workers are truly independent. The businesses would have to demonstrate to the New Jersey Department of Labor and Workforce Development the workers are free from their day-to-day control, that the service is outside the usual course or place of business, and the employee is customarily engaged in an independent trade or occupation.
A similar measure was approved by the New Jersey Assembly on May 20. The bill was sent to Gov. Chris Christie for signature.
“The misclassification also puts the businesses that play by the rules at a disadvantage which is unfair and bad for the competitive marketplace,” said Sen. Loretta Weinberg, the bill's primary sponsor. “If they don’t make the required payments for unemployment, Social Security, Medicare or the temporary disability fund, everyone loses. There should be a level playing field that includes the fair and equal treatment of all workers.”
A press release from New Jersey's Senate Democrats said a 2009 study by the U.S. Government Accountability Office found an estimated 15 percent of employees nationwide are misclassified as independent contractors. A 2005 report by the New Jersey Department of Labor and Workforce Development estimated that 28,200 workers in the state were wrongly classified.
The bill was supported by the Teamsters.
Curtis Whelan, the executive director of the American Trucking Associations’ Intermodal Motor Carriers Conference, said similar legislation has been introduced in other states such as New York and Washington, but not approved.
He said such misclassification bills “create a presumption that you are an employee and not an independent owner operator. The bigger question to me if I was an independent owner-operator is ‘what the hell happens to my truck.’
“There are certainly jobs available for independent owner-operators who want to be employees now. Our feeling with the drivers we work with is that they do not want to be employees… they like owning their own truck and having that capability and this bill would end that,” he said.
Rather than protecting drivers, Whelan feels the Teamsters are “trying to ruin their jobs.”
, the official publication for the Owner-Operator Independent Driver Association, quoted Todd Spencer, its executive vice president, as saying the legislation was misguided and could result in a lot of businesses packing up and leaving the state.
Whelan noted that bills in state legislatures follow ATA's successful lawsuit in the 9th Circuit Court of Appeals brought against certain provisions in the Port of Los Angeles’s clean truck program. Portions of that decision were appealed by the ATA to the U.S. Supreme Court and a decision in the case is expected within several weeks. Whelan said the high court’s ruling could potentially be useful in battling state laws aimed at eliminating owner-operators. - Chris Dupin