Trying to ascertain the true impact of a new business regulation is never easy — especially when it is an attempt to redefine one of the most contentious rules of the game: The misclassification of workers.
Lisa Yakomin, the President of the Association of Bi-State Motor Carriers, a nonprofit organization representing the intermodal trucking community at the Port of New York & New Jersey, will try to do that today in Trenton when she tries to explain why the Labor Department’s new rules regarding the “ABC” test will hurt her members.
She’ll have all of four minutes to do so.
Considering that’s an impossible task, BINJE is offering a bit more space to state her case.
We’ll start by listing five truths, according to Yakomin, that she feels few would dispute:
1. Bi-State MC is 100% against misclassification – “and we support efforts to enforce laws that protect workers,” she said;
2. The great majority of companies in Bi-State MC, which moves the great majority of product at the Port, use a large percentage of independent owner-operator contractors – as much as 77% of their workforce;
3. The great majority of companies and independent drivers likes the rules as they are now;
4. Many people are against the proposed regulation – including advocay group Circulate NJ and three key members of the Legislature, who sent a letter saying so;
5. No matter what happens in Trenton on Monday may not have much impact on whether the DOL implements the change, which they can on Aug. 6 – when they alone decide its fate.
Here’s where it gets tricky.
Yakomin feels the unintended consequence of the new proposal – one that likely would find more drivers have to be considered full-time employees – is a huge cost to the consumer.
Here’s why:
Companies that are forced to drop independent contractor drivers would not be able to move nearly as much cargo, dramatically slowing the supply chain — which would raise prices.
Companies that do make more of their drivers full-time employees (if they are able to find enough willing to be classified that way), will increase huge costs in benefits and huge costs in infrastructure (they’ll have to buy more trucks) – and they will do so knowing that they may continually lay these workers off due to the cyclical nature of the industry.
If that’s not enough, Yakomin said folks should consider this: No one involved wants the rules to change.
“This industry in particular, port trucking in particular, attracts workers who want a flexible schedule and who want to be their own boss,” she said. “Unlike any other kind of long-haul trucking, where you hear about truckers who are away from their families for a week at a time, the port truckers have short runs, so they are able to be home with their families at the end of the day.
“They can come and go as they please. It tends to attract independent contractors for that reason.”
Yakomin, a member of Circulate NJ, a wide-ranging coalition that seeks to inform and educate the public on the numerous benefits of the logistics industry through hard data and specific examples, said it points to another truth.
There are no aggrieved parties here, she said.
The DOL did not immediately respond to a request for comment, but it did make its position clear when it announced its proposal on May 5.
They said the proposed new rules aim not only to safeguard the rights and benefits of employees who have been wrongly classified as independent contractors, but also to affirm the right of genuine independent contractors to forgo employment in favor of engaging in independently established business enterprises, the department wrote in making the announcement.
Commissioner Robert Asaro-Angelo said the proposal would help independent contractors – as it would more easily identify them.
“This rule proposal is a critical step in providing clear, reliable guidance to employers to help them comply with the law and prevent the illegal misclassification of employees,” he said. “Not only would these new rules protect workers’ rights, but they would also ensure that bona fide independent contractors understand what makes them independent contractors, rather than employees, so that they can continue to operate with autonomy.
“The work being done in New Jersey to combat worker misclassification is a testament to our state’s commitment to justice and fairness in the workplace.”
Not everyone in the Legislature agrees with this.
In fact, Senate Labor Committee Chair Gordon Johnson, Senate Legislative Oversight Committee Chair Andrew Zwicker and Senate Commerce Chair Joe Lagana – all Democrats – already have sent a letter to the DOL expressing concern.
“We are supportive of the department’s intent to protect workers’ rights and ensure a level playing field for employers across the state,” they wrote. “However, upon reviewing the rule proposal, we are concerned that it departs from the existing statute and case law controlling worker classification.”
What gets tricky is predicting what will happen should the new regulation be put in place.
Yakomin said it would dramatically reduce who could be considered an independent contractor, causing irreparable harm to her members —and the Port.
And while she said she’s not against an update, she feels this version of the ABC standard is a step backward, one that doesn’t reflect the ever-changing desires of employees in a modern-day gig economy.
“Right now, it’s a perfect marriage,” she said. “You’ve got these drivers who want flexibility. They want to be able to work only a certain amount of days a week or a certain number of months in the year. They want to be able to make their own hours and decide how many runs they do.
“And you’ve got an industry that needs people who want flexibility, who are willing to work more during certain times of the year and then not work during other times of the year.
“This just goes too far.”
The DOL has allowed for 90 days for comments. Yakomin and others are doing what they can to stop it. She said one group already has gathered nearly 1,000 letters of opposition.
Yakomin’s not sure it will matter.
And though she will eagerly offer her thoughts today – making every one of her four minutes count – Yakomin feels as if she already has been counted out.
“They don’t have to listen to the comments,” she said. “Ultimately, they’re going to do what they want to do.”
