The Commercial Vehicle Safety Alliance's (CVSA) International Roadcheck will take place May 5-7. International Roadcheck is a high-volume, high-visibility three-day enforcement initiative that highlights the importance of commercial motor vehicle safety through roadside inspections. Over that 72-hour period, commercial motor vehicle inspectors in jurisdictions throughout North America will conduct inspections on commercial motor vehicles and drivers.
Each year, International Roadcheck places special emphasis on a category of violations. This year's focus is on the driver requirements category of a roadside inspection. According to the U.S. Federal Motor Carrier Safety Administration's (FMCSA) fiscal 2019 data (as of Dec. 27, 2019), of the 3.36 million inspections conducted, 944,794 driver violations were discovered, of which 195,545 were out-of-service conditions.
"With last year's federal electronic logging device full-compliance mandate in the U.S., the Alliance decided that this year's International Roadcheck would be the perfect opportunity to revisit all aspects of roadside inspection driver requirements," said CVSA President Sgt. John Samis with the Delaware State Police.
During International Roadcheck, CVSA-certified inspectors primarily conduct the North American Standard Level I Inspection, a 37-step procedure that includes two main inspection categories: an examination of driver operating requirements and vehicle mechanical fitness. A third category, hazardous materials/dangerous goods, may also be part of a Level I Inspection. Depending on weather conditions, available resources or other factors, inspectors may opt to conduct the Level II Walk-Around Driver/Vehicle Inspection, Level III Driver/Credential/Administrative Inspection or Level V Vehicle-Only Inspection.
An inspector will start each inspection procedure by greeting, interviewing and preparing the driver. The inspector will collect and verify the driver's documents, identify the motor carrier, examine the driver's license or commercial driver's license, check record of duty status and review periodic inspection report(s). If applicable, the inspector will check the Medical Examiner's Certificate, Skill Performance Evaluation Certificate and the driver's daily vehicle inspection report. Inspectors will also check drivers for seat belt usage, illness, fatigue, and apparent alcohol and/or drug possession or impairment.
The vehicle inspection includes checking critical vehicle inspection items such as: brake systems, cargo securement, coupling devices, driveline/driveshaft components, driver's seat (missing), exhaust systems, frames, fuel systems, lighting devices, steering mechanisms, suspensions, tires, van and open-top trailer bodies, wheels, rims and hubs, and windshield wipers. Additional items for buses, motorcoaches, passenger vans or other passenger-carrying vehicles include emergency exits, electrical cables and systems in engine and battery compartments, and temporary and aisle seating.
If no critical vehicle inspection item violations are found during a Level I or Level V Inspection, a CVSA decal will be applied to the vehicle, indicating that the vehicle successfully passed a decal-eligible inspection conducted by a CVSA-certified inspector. However, if a required rear impact guard is inspected during a Level I or Level V Inspection and violations are present, a CVSA decal will not be issued.
If an inspector does identify critical vehicle inspection item violations, he or she may render the vehicle out of service if the condition meets the North American Standard Out-of-Service Criteria. This means the vehicle cannot be operated until the vehicle violation(s) are corrected. A driver can also be placed out of service for driver credential-related issues or driver conditions, such as fatigue or impairment.
In the past, International Roadcheck usually took place during the first week of June. However, this year, International Roadcheck was moved up by one month, from June to May, when the weather may be more favorable for many jurisdictions.
"Announcing the dates of International Roadcheck has always been a deliberate, thoughtful and purposeful decision by the Alliance," said Sgt. Samis. "By announcing the dates in advance, we hope to remind motor carriers of the importance of proactive vehicle maintenance and remind drivers to be prepared for inspections and to always conduct pre- and post-trip inspections. We want every vehicle and driver inspected during this initiative to pass inspection with no violations."
Sgt. Samis added, "We're aware that some drivers opt to stay off roadways during the three days of International Roadcheck. Although there is certainly an increase in the number of inspections conducted during International Roadcheck, it's important to remember that inspections are conducted every day of the year. Inspectors will be inspecting commercial motor vehicles the day before International Roadcheck starts, the day after it ends, as well as any other day of the year."
International Roadcheck is the largest targeted enforcement program on commercial motor vehicles in the world, with approximately 17 trucks and buses inspected, on average, every minute in Canada, Mexico and the U.S. during a 72-hour period. Since its inception in 1988, more than 1.6 million roadside inspections have been conducted during International Roadcheck campaigns.
International Roadcheck is a CVSA program with participation by FMCSA, the Canadian Council of Motor Transport Administrators, Transport Canada and the Secretaría de Comunicaciones y Transportes (Ministry of Communications and Transportation) of Mexico.
The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration today released data following the first weeks of operation of its Commercial Driver’s License Drug and Alcohol Clearinghouse. The information released showed that the clearinghouse has detected and identified nearly 8,000 positive substance abuse tests of commercial drivers since January 6, 2020. The clearinghouse now has more than 650,000 registrants.
“We’ve seen encouraging results from the Drug and Alcohol Clearinghouse, but there’s still work to do to ensure we identify more drivers who should not be behind the wheel. The clearinghouse is a positive step, and the Agency continues to work closely with industry, law enforcement, and our state partners to ensure its implementation is effective,” said FMCSA Acting Administrator Jim Mullen.
The clearinghouse is aimed at improving road safety by providing FMCSA and employers with the necessary tools to identify drivers who have violated federal drug and alcohol testing program requirements and are prohibited from operating a Commercial Motor Vehicle. The goal of the clearinghouse is to ensure that such drivers receive the required evaluation and treatment before they have the opportunity to resume driving.
Those required to register for the clearinghouse include:
There is no cost for registration. Commercial drivers are not required to immediately register for the clearinghouse, but will need to register to respond to an employer’s request for consent prior to a pre-employment query or other full query being conducted. In addition, employers must be registered during the first year of implementation to ensure they are able to conduct the required annual query on all employed drivers.
Combatting drug abuse has been a top priority of the U.S. Department of Transportation and the Trump Administration. President Trump has brought attention to the nation’s opioid crisis by declaring it a nationwide public health emergency and has implemented critical federal initiatives to help reduce opioid abuse.
FMCSA’s clearinghouse website contains important resources, including user brochures and instructional aids with step-by-step registration instructions for all users. Users can visit https://clearinghouse.fmcsa.dot.govto access these resources.
The clearinghouse is a secure online database that allows FMCSA, employers of CDL drivers, State Driver Licensing Agencies, and law enforcement officials to identify – in real time – CDL drivers who have violated federal drug and alcohol testing program requirements, and thereby improve safety on our nation’s roads.
The American Transportation Research Institute today released its annual list highlighting the most congested bottlenecks for trucks in America.
The 2020 Top Truck Bottleneck List assesses the level of truck-involved congestion at 300 locations on the national highway system. The analysis, based on truck GPS data from over 1 million heavy duty trucks uses several customized software applications and analysis methods, along with terabytes of data from trucking operations to produce a congestion impact ranking for each location. ATRI’s truck GPS data is also used to support the U.S. DOT’s Freight Mobility Initiative. The bottleneck locations detailed in this latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 300 freight-critical locations.
The intersection of I-95 and SR 4 in Fort Lee, New Jersey is once again the Number One freight bottleneck in the country. The rest of the Top 10 includes:
2. Atlanta: I-285 at I-85 (North)
3. Nashville: I-24/I-40 at I-440 (East)
4. Houston: I-45 at I-69/US 59
5. Atlanta, GA: I-75 at I-285 (North)
6. Chicago, IL: I-290 at I-90/I-94
7. Atlanta, GA: I-20 at I-285 (West)
8. Cincinnati, OH: I-71 at I-75
9. Los Angeles, CA: SR 60 at SR 57
10. Los Angeles, CA: I-710 at I-105
“ATRI’s bottleneck analysis is an important tool for TDOT as we work to maximize the safety and efficiency of our transportation system, and ensure we are making the smartest investments possible,” said Tennessee Department of Transportation Assistant Bureau Chief Freight & Logistics Dan Pallme. “The additional capacity we are providing as part of the ongoing I-440 Reconstruction Project should improve the safety and reliability of this important corridor, which we know is critical to freight movement.”
ATRI’s analysis, which utilized data from 2019, found that the number of locations experiencing significant congestion – with average daily speeds of 45 MPH or less – has increased 92 percent in just five years, far outpacing the 10 percent growth in traffic congestion for that same time period.
“ATA has been beating the drum about the continued degradation of our infrastructure, and thanks to ATRI’s research we can see exactly how decades of ignoring the problem are impacting not just our industry but our economy and commuters everywhere,” said American Trucking Associations President and CEO Chris Spear. “This report should sound the alarm for policymakers that the cost of doing nothing is too high and provide a roadmap of where to target investments to really solve our nation’s mounting infrastructure crisis.”
For access to the full report, including detailed information on each of the 100 top congested locations, please visit ATRI’s website at TruckingResearch.org.
The American Transportation Research Institute (ATRI) today released new research that documents the collection and distribution of $14.7 billion in U.S. toll revenue, representing 82 percent of U.S. toll collections. The research sheds light on many questions about tolling, including how much toll revenue is generated versus reinvested in toll facilities, and contrasts truck-generated toll revenue versus truck utilization of toll roads.
This study was identified as the top research priority for the industry by ATRI’s Research Advisory Committee in 2019.
To better understand tolling, researchers collected public financial data from Comprehensive Annual Financial Reports (CAFR) published by toll systems, and attempted to standardize financial comparisons across systems. Key metrics included toll facility charges by user type, toll facility expenditures and toll revenue diversion to non-toll entities.
ATRI’s research found that the 21 major toll systems analyzed collected more than $14.7 billion in revenue with nearly 50 percent of toll revenue diverted to other uses. In addition, toll revenue increased more than 72 percent over the last decade compared to inflation growth of just 16.9 percent.
The report includes a first-of-its-kind data analysis to better understand the relationship between interstate commerce and toll road utilization. Through an analysis of truck GPS data, the researchers were able to quantify toll revenue impacts on local truck activity versus interstate commerce.
“It is clear from this research that highway funding mechanisms that return our tax investments to highways are far superior to tolling,” said Darren Hawkins, YRC Worldwide Chief Executive Officer. “We need greater oversight and transparency to ensure that the billions of dollars paid by our industry goes back into the roads and bridges that generate the revenue.”
This bulletin provides guidance for verifying compliance with the Unified Carrier Registration (UCR) Agreement during a roadside inspection and encourages roadside enforcement for the 2020 registration year, effective Jan. 1, 2020.
The UCR Board has suspended enforcement of the 2020 registration period until further notice. The start of the 2020 UCR registration period is delayed while the Federal Motor Carrier Safety Administration (FMCSA) completes its rulemaking process on fee levels for 2020.
Once the final rulemaking is published, the UCR Board of Directors will recommend that states delay enforcement for three months from the start of the registration period.
Click below for copy of Bulletin
The American Transportation Research Institute (ATRI) today released new research that identifies both the positive and negative impacts associated with numerous government policies, programs and regulations that target autonomous truck development and testing. ATRI’s study proposes a framework by which autonomous truck standards could be developed.
This study was identified as the top research priority for the industry by ATRI’s Research Advisory Committee in 2018.
More specifically, the report documents the dozens of local, state and federal activities that guide and regulate autonomous truck activities. While most attempt to create a framework for the safe testing of autonomous trucks, the myriad state and local activities ultimately impede the creation of a seamless and standardized autonomous truck (AT) network. Even those government rules that ostensibly support autonomous truck development often are too prescriptive to generate meaningful outcomes. For example, multiple vendors highlight Level 4 testing, even though regulations require constant control of the vehicles by both drivers and onboard engineers – making it difficult for motor carrier executives to accurately assess the real value of ATs.
“The pace of technology development in the autonomous truck sphere is moving at lightning speed,” said Jeff Reed, Skyline Transportation President and chair of the ATA Automated Truck Subcommittee. “Our industry needs states to collaborate on seamless policies and regulations, and we need more proactive federal guidance on AT development. Government activities at all levels must be dynamic enough to address the constantly evolving technology landscape.”
The PA Turnpike Commission (PTC) today reminded customers that beginning at 12:01 a.m. on Jan. 5 tolls will increase six percent for cash, E-ZPass and TOLL BY PLATE customers. The increase, approved by the commissioners last July, takes effect on all sections and extensions excluding three western PA “cashless” tolling facilities.
The most-common toll for a passenger vehicle will increase from $1.40 to $1.50 for E-ZPass customers and from $2.30 to $2.50 for cash customers. The most common toll for a Class-5 tractor trailer will increase from $3.70 to $4.00 for E-ZPass and from $16.30 to $17.30 for cash. The cashless toll at the westbound Delaware River Bridge will increase from $5.30 to $5.70 for E-ZPass customers and from $7.20 to $7.70 for those who use PA Turnpike TOLL BY PLATE.
Since 2009 the PTC has increased tolls annually to fulfill a funding obligation required by Act 44 of 2009. As a result, the PTC has delivered more than $6 billion in funding to PennDOT in the last decade. By law, these payments support mass transit statewide, with the bulk of funding supporting transit in Philadelphia and Pittsburgh.
The PA Turnpike Commission strives to provide a reliable roadway that outpaces national averages in ride quality, safety and incident-response rates. More than 85 percent of the PTC’s capital plan reflects a focus on mobility and safety. To date more than 144 miles of its roadway system, which turns 80 years old this year, have been reconstructed.
To check toll rates for any Turnpike trip visit https://www.paturnpike.com/toll/tollmileage.aspx.
A federal judge has handed down a temporary restraining order blocking the Jan. 1 implementation of California’s AB5 against motor carriers.
AB5 is the law restricting the ability of independent operators — including truck drivers — to operate in the state.
In a case brought by the California Trucking Association, Judge Roger T. Benitez of the U.S. Southern District Court ordered the state not to enforce AB5 against any motor carrier in California, pending a final resolution of the lawsuit brought by the CTA.
Weston LaBar, the executive director of the Harbor Trucking Association, which is closely aligned with CTA, described it as a “minor victory” but said he hoped it was one step toward “a more fruitful” victory in the CTA’s fight against AB5. While the CTA is the lead plaintiff, LeBar said the Harbor Trucking Association, which represents the drayage sector, supported CTA’s efforts and believed it was the preferred organization to lead the legal fight.
At issue in the judge’s order was the so-called “B Prong” of AB5. AB5 adopted almost verbatim wording from the Dynamex case handed down in California in 2018 which set several tests for when a worker should be considered an employee rather than an independent operator. The B part of the ABC test in Dynamex — the basis for the B prong in AB 5 — said an owner-operator should be considered an employee unless, as Benitez noted, “the person performs work that is outside the usual course of the hiring entity’s business.” A trucking company hiring a truck driver who is independent would not meet that test of independence. A trucking company hiring a cleaning company to tend to its headquarters would meet it.
Key legal arguments against AB5 have focused on the Federal Aviation Administration Authorization Act of 1994. That federal law has wording on the ability of states to regulate motor carriers. Attorneys for CTA have argued that FAAAA pre-empts AB5, and Benitez was persuaded.
In a footnote, the judge said “the Court is persuaded by the likelihood of Plaintiffs’ success on the FAAAA preemption ground.” Benitez chose not to address some other CTA arguments; in essence, he appears to be saying that the FAAAA challenge is enough and other legal points don’t need to be considered at this time.
In another part of his ruling, Benitez said the CTA and other plaintiffs “are likely to succeed on the merits.” He also ruled that a restraining order is called for because the plaintiffs are “likely to suffer irreparable harm in the absence of relief” and “relief is in the public interest.”
The ruling suggests that a truck driver would almost never be found to be an independent owner-operator under the tenets of AB5. “Because contrary to Prong B, drivers perform work within (court italics) the usual course of the motor carrier hiring entity’s business, drivers will never be considered independent contractors under California law,” Benitez wrote.
And the costs of ignoring the law are significant, he added. “If their interpretation of the statute is correct, Plaintiffs will have to risk criminal prosecution or take significant and costly compliance measures,” he wrote.
LaBar called the temporary restraining order a “really good sign.” “It is extremely difficult to get a restraining order and preliminary injunction,” he said. “This bodes well for the case.”
“We felt like this was an overreach from day one,” LaBar added. “We felt like this was done with a complete disregard on how this impacted interstate commerce.”
He added that he hopes the decision and a possible success in further proceedings can “attract cargo back to the West Coast, giving us boxes to move and livelihoods to make.”
LaBar said the next hearing on the case will be Jan. 13.
John Kingston Freightwaves
California’s new employment law has boomeranged and is starting to crush freelancers
PUBLISHED WED, DEC 11 20199:29 AM ESTUPDATED WED, DEC 11 20195:48 PM EST
· California’s new AB 5 employment law takes effect Jan. 1, 2020, and freelancers are already feeling the squeeze with a decline in business and income.
· The law codifies the ABC test — which helps employers determine who should be classified as a freelancer — giving exemptions to some types of freelancers, such as architects, doctors, insurance agents and truck drivers.
· Experts say many other blue states, such as New York and New Jersey, are considering adopting similar laws.
· According to Upwork’s 2019 Freelancing in America survey, there is a reported 57 million American freelancers contributing an excess of $1 trillion to the economy each year.
Uber and Lyft drivers protest during a day-long strike outside Uber’s office in Saugus, Massachusetts, May 8, 2019.
Brian Snyder | Reuters
Jeremiah LaBrash, 36, works as a tech programmer for a telecom by day and as a freelance cartoonist for media companies on his time off. Sometimes he brings in half of his annual income from his freelance work.
That changed when Assembly Bill 5 passed in California and Gov. Gavin Newsom signed it into law on Sept. 18. The law requires most companies to reclassify contract, freelance and contingent workers — the backbone of the gig economy —as full-time employees eligible for benefits, a guaranteed $12–$13 state minimum wage and protections under the state’s employment law.
LaBrash, based in Los Angeles, suddenly found potential projects drying up when he submitted onboarding paperwork to potential clients and they discovered he lived in California.
“I’ve had them hire me and then come back and say they’re no longer interested,” says LaBrash. “All of a sudden, someone I’ve never talked to says, ‘We’ve decided not to move forward.’ I’ve never had that happen before this year.”
LaBrash can’t be certain the reason is AB 5, though he believes it is. He has seen a 40% decline in his freelance income since the law passed in September. “My savings are stagnant,” says LaBrash. “I really can’t look into buying a house. The housing market here is hard already.”
Even if employers hire him for freelance work, he is limited to 35 annual submissions per client before they have to put him on payroll, he notes. It’s a limit under the law. That’s not a large amount for regular contributors to media companies. “You’re going to hit your quota and they won’t want to hire you,” he says.
The ripple effect on the gig economy
LaBrash isn’t alone in fearing he’ll lose a big part of his income as a freelancer. AB 5 has sent shock waves through the world of companies that employ freelancers and the independent workers whom they rely on since it passed. The law codifies the ABC test — which helps employers determine who should be classified as a freelancer — giving exemptions to some types of freelancers, such as architects, doctors, insurance agents, lawyers, grant writers, real estate agents, tutors, truck drivers and manicurists.
The law, which takes effect Jan.1, 2020, could cost the employers a lot of money. It says the exemptions are retroactive. The California Supreme Court just announced this week it will make a decision on whether the ABC test applies to contractor relationships prior to April 30, 2019, before the California Supreme Court opted to use the ABC test in the court case Dynamex Operations West Inc. v. Superior Court of Los Angeles.
California Gov. Gavin Newsom speaks during a news conference with at the California State Capitol on August 16, 2019 in Sacramento, California.
Justin Sullivan | Getty Images
It has many unicorns, including Lyft, DoorDash, Instacart and Uber worried about their business model scrambling to launch a voter initiative to roll back the effects of AB 5. The statewide measure, the Protect App-Based Drivers & Services Act, proposed for a November 2020 ballot, would give ride-share drivers and couriers an earnings guarantee of at least 120% of minimum wage and certain benefits and protections but allow them to remain independent contractors who set their own work hours.
Franchisors are also worried that their franchisees could be reclassified from their traditional designation as independent contractors to employees. The International Franchise Association lobbied to get an exclusion from the law, but it wasn’t granted.
Here’s what a California law could mean for Uber and Lyft
“I don’t believe legislators realized the impact this had,” says Gene Zaino, founder and executive chairman of MBO Partners, which studies the freelance economy and provides back-office services to freelancers. “This was really designed to create a safety net for people that needed it. Legislators didn’t realize at the same time, they impacted millions of people in thousands of businesses that are using freelancers, even though that was not their intent. A lot of businesses are paralyzed, in terms of ‘everyone needs to be on payroll.’”
As Zaino explains, many freelancers work independently by choice on terms they prefer. Many are concerned that they’ll have to trade in their freedom for structure, potentially losing their ability to set their own hours. “There are people that want to be independent contractors,” says Zaino. “They want the freedom and the choice and don’t want their clients to be afraid to use them.”
And California’s new regulation is expected to have a ripple effect throughout the nation’s $1 trillion gig economy.
Many employers and freelancers are concerned that other blue states, such as New York and New Jersey, will usher in similar laws.
Opposition mounts from many quarters
Ride-sharing platforms have been lobbying against the California law through Protect App-Based Drivers & Services. They are launching a ballot referendum for 2020 to exempt ride-hailing apps from the law but setting minimum pay for drivers, reimbursing them for mileage, offering health-care stipends in some cases and insurance for workplace accidents.
One area of AB 5 that has sparked great concern is that if freelancers fall under the occupations listed in it and they do work for a company that could be viewed as a “core capability” of that company, they must be paid as an employee, according to Zaino.
Los Angeles-based freelancer Jeremiah LaBrash has suddenly found projects drying up.
“If you are doing copywriting work for a company that does blogging or that communicates — which every company does — you should be an employee,” says Zaino. “I believe the intent of the law was not to do that.”
Legislators didn’t seem to understand that companies often hire people from out of state as remote freelancers, putting freelancers in California at a disadvantage, notes Steve King, partner in Emergent Research in Walnut Creek, California, which studies the freelance economy.
I don’t believe legislators realized the impact this had. ... A lot of businesses are paralyzed, in terms of ‘everyone needs to be on payroll.’
FOUNDER AND CHIEF EXECUTIVE OF MBO PARTNERS
“It’s hit writers first,” says King, pointing to a number of articles that California-based freelance writers have published about the difficulty in getting assignments since AB 5, as well as freelance job postings that now exclude California freelancers.
Professional Independent Consultants of America, which opposes the law, has advised its members to form an LLC or S Corp, get a business license, create a business infrastructure that includes elements such as a separate business bank account, create a website and a business email address at a domain only used for business, advertise, use written contracts and submit invoices for all work, not time sheets, according to Liz Steblay, co-founder. “Effectively, this law means that to be paid as a business, a freelancer or solo professional is going to have to be set up like a business and act like a business,” Steblay said in an email.
Other states follow suit
But it’s not only freelancers who are worried. Emergent Research recently discussed the law with a California-based corporation that was changing its freelance hiring policies, says King. “They told us they were going to stop hiring California-based independent contractors,” he says.
Some industries, such as media and tech, could especially be hard-hit. “There’s a lot of nervousness in Hollywood about how this gets interpreted — there are so many freelance creatives,” says King. “We won’t really know until a few court cases get settled.”
Other states, such as New Jersey and Massachusetts, already have strong worker classification laws. New Jersey’s laws may be getting stricter. It is considering a similar set of bills, Senate bill S4204 and Assembly bill A5936, which some legal observers say could be the most restrictive in the nation. S4204 says a worker will be assumed to be an employee unless they are free from control and direction in performing their work, the service performed is outside the usual course of business for the company and the worker is “customarily engaged in an independent trade, occupation, profession or business of the same nature as that involved in the work performed.” The N.J. assembly bill addresses additional penalties for violation.
Fight for Freelancers, a Facebook group of independent workers, was formed in November to fight the legislation. New Jersey’s proposed laws include only a small handful of exempted occupations, compared to the California law. Senate Democrats, in response to complaints that independent workers will have to leave the state in order to work, recently sent a letter to their followers saying they will make changes to the bill to protect independent contractors and freelancers.
King believes there could be changes in the offing, given that California’s Gov. Newsom and legislators have said they will amend the law if there are problems.
“It’s a first try,” says King. “As long as everyone accepts that it needs to be adjusted and fixed, it’s a good first try.”
Legislators need to modify the law so it takes into account the many different situations of freelancers, says Zaino. The situation of an Uber driver who is randomly hired when a consumer summons a car on the app is different from that of a freelance professional whom a company interviews and hires for a specific project because of his or her unique skills, he points out.
“We need to make it clear to policymakers that you can’t have one-size-fits-all,” says Zaino. “You can’t take a broad brush approach on this.”
Not all freelancers are being affected. At 99Designs, a global platform for hiring freelance graphic designers based in Australia, CEO Patrick Llewellyn does not believe California AB 5 will affect many of this platform’s freelancers, who tend to be knowledge workers located outside of the major cities. “From everything I’ve looked at, it doesn’t meet the requirements of what we do,” says Llewellyn.
For more on tech, transformation and the future of work, join CNBC at the @Work Summit in New York on April 1–2, 2020.
Is this the End of the Entrepreneur?
by Rosemary Becchi
People in New Jersey work hard, most with the dream of building a better life for their families.
Those with enough determination and grit supplement day jobs by working as independent contractors, putting their special skills to use after hours and on weekends. Others do it full-time because they like the flexibility of working for themselves, and others do it because they can’t leave their homes for traditional jobs.
Many just hope to build their own company one day. It’s a classic tale of the American Dream, one being pursued by more than 10 million people, according to the federal Bureau of Labor Statistics.
So why on earth are the people representing us in Trenton and Washington D.C. trying to destroy that?
Our state Legislature has recklessly fast-tracked a law that could effectively kill any chance of people working in New Jersey as an independent contractor. Similar efforts are afoot in the U.S. Senate and in Congress, and California industries are already in turmoil over a similar law slated to go into effect in January.
We are looking at the very real possibility of killing the business of every real estate broker, designer, hairdresser, freelance writer, photographer, and truck driver who chooses to work as an independent contractor. Imperiled as well are many unseen professionals, from on-line teachers to aids for the special needs community.
Ironically, the law in New Jersey is largely being pushed by legislators who also support Governor Murphy’s plan to build what he calls an “innovation economy” — a plan he says will be realized by encouraging more entrepreneurs.
So why is this happening? Why now?
Paternalistic advocates in D.C. and New Jersey claim they want to protect the workers — although fewer than one in 10 independent contractors nationwide report that they prefer a traditional job over their entrepreneur effort.
What stirred the pot was car-ride companies like Lyft and Uber. New Jersey, like other states, fined Uber $649 million recently, accusing the car service of violating state labor regulations by treating its drivers as independent contractors when, the state claims, they should be treated as company employees.
“Misclassifying” workers, as it is known, is traditionally a problem in the construction industry. Some unscrupulous builders try to avoid paying FICA, unemployment insurance and other taxes on their workers by classifying them as independent contractors instead of company employees. The companies also try to avoid paying traditional benefits to the employees.
It’s wrong when it happens, and labor officials on the state and national level have always prosecuted errant companies. In fact, New Jersey’s Department of Labor and Workforce Development regularly publicizes the cases it prosecutes.
But anti-Capitalism activists and the reckless career politicians vying for their support have used the clamor over Uber and Lyft to create a false sense of urgency. They are now doing what they always do — creating panic and conjuring a nuclear-weapon solution to obliterate the perceived problem, along with everything else around it.
Any sense of responsibility to the American public is being blown away, along with all appreciation for independent contractors and the advances enjoyed by everyone in America because some entrepreneurs walked away from traditional employment.
These workers want to continue America’s traditional independent contractor model: to hone their valued skill, knowledge or talent; freely sell their services; set their own schedules; invest in themselves, and take ownership of their work in a way that is often impossible in a traditional working arrangement.
Stunned by this surprise attack on their livelihoods, independent contractors are now reaching out to legislators. But they are discovering we are leaderless in both Trenton and Washington.
The career politicians are fixated on moving sweeping laws instead of rethinking the effort. In New Jersey, we have mild appeasement. Politicians say they are crafting a list of independent contractor classifications to exempt from the new law.
But it seems insincere given these same politicians lacked the vision in the first place to realize the adverse impact their ham-fisted efforts will have on entrepreneurs. It is stunning they did not sit down with the business community before launching this folly.
We need to stop this job-killing juggernaut. We need real leadership on this issue, and all other issues in both Trenton and Washington. We need thoughtful people who will take reasoned approaches to solve problems, without creating new problems.
New Jersey, and the rest of America, deserves better than this.
Rosemary Becchi is Strategic Advisor and Counsel at Brownstein Hyatt Farber Schreck and Founder and President of Jersey First, an advocacy organization dedicated to advocating for lower taxes and less spending in New Jersey.
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