While many of us held out hope that 2021 would suddenly usher in an era of tranquility, remember, pandemics don\u2019t go away quickly. It will take a long time for us to recover to pre-pandemic levels if we ever do. Still, the gears of the government grind on. With a new administration coming in and the previous one leaving, there is movement in Washington. <\/p>\n\n\n\n
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So, today we will provide our latest update on things\nhappening in Capitol Hill that impact our country. The topics we will cover\ninclude a final independent contractor rule from the department of labor and\nthe current state of truck orders. Both topics impact truck drivers and the\ncompanies they work with. Let\u2019s begin!<\/p>\n\n\n\n
What Has Changed?<\/strong><\/p>\n\n\n\n While the Department of Labor (DOL) has issued a final rule\ndefining what an independent contractor is versus an employee under the Fair\nLabor Standards Act, there is still some uncertainty as to how the final rule\nwill fair in a new administration. <\/p>\n\n\n\n The rule was originally proposed in September and uses an\n\u201ceconomic reality\u201d test to determine a worker\u2019s status. The test will determine\nwhether they should be classified as an employee or an independent contractor.\nWhen applying the criteria, the test looks at factors such as:<\/p>\n\n\n\n Right now, the DOL uses a multifactor test to determine whether\nsomeone is an independent contractor or not, but that test has been described\nas \u201cunclear and unwieldy.\u201d Still, the rule is in danger because it was provided\nas an example by the Biden-Harris transition team when they are naming Trump\nadministration regulations they planned to halt when they come to power. <\/p>\n\n\n\n What Are the Changes?<\/strong><\/p>\n\n\n\n If the incoming administration does not kill the rule right\naway, it is set to go into effect in early March. The question now is, what is\nin the final rule? There are a couple items that jump out right away. First,\nthere are changes to what can be considered \u201cevidence of control.\u201d You may\nremember that the final classification relies on how much evidence of control\nthere is of the employer over the employee or independent contractor. <\/p>\n\n\n\n The final rule states that certain contractual provisions\ndesigned to ensure compliance with federal regulations \u2013 such as those\ngoverning safety \u2013 will not be considered evidence of control. In addition to\nthis, the final rule aims to clarify some of the issues identified when the\nrule was being drafted. They include clarifications such as:<\/p>\n\n\n\n It should be no surprise that the Biden administration is\nexpected to put this new rule on ice, considering the Teamsters union and other\nworker advocacy groups have come out strongly against it. <\/p>\n\n\n\n What Are the Objections?<\/strong><\/p>\n\n\n\n The teamsters have basically said that the rule would make\nit easier for trucking companies to classify their workers as independent\ncontractors, which would result in them not being covered by federal laws\ngoverning minimum wage and overtime. They contend that the rule defeats the\nentire purpose of trying to clarify who can be classified as an employee and\nwho should not. <\/p>\n\n\n\n The Teamsters released the following statement in a press\nrelease:<\/p>\n\n\n\n \u201cAs it stands, companies across the country have sought loopholes and workarounds to misclassify workers as independent contractors, which denies them proper wages and job protections as well as access to unemployment benefits. Teamsters have been aggressively pushing back on this issue for years at the ports, and especially during the pandemic where misclassified truck drivers are denied proper protective gear and workplace safety measures in addition to fair wages and benefits. There is already a growing anti-worker issue that will be exacerbated if these regulations are enforced.\u201d<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n The ATA, while not implicitly supporting or coming out\nagainst the rule, did make a note that the final rule does not pre-empt wage and\nhour laws at the state level. Still, this distinction might not make much of a\ndifference considering many states follow federal guidance when it comes to\nemployment classification. So, even if the rule never goes into effect\nfederally, you could see states adopt it still. They also noted that the final\nrule does not impact compensation, taxes, or Title VII employment laws. <\/p>\n\n\n\n Now the question is, how much of an impact will this have\nwith a new administration coming to bear? For now, those questions remain to be\nanswered. It is expected that President-Elect Biden will undo many of the\nregulations and executive orders Trump passed, but to what extend is unknown. <\/p>\n\n\n\n New Truck Orders Take Off<\/strong><\/p>\n\n\n\n Next up on our look at 2021 items truckers should keep in\nmind is truck sales. 2020 was definitely a strange year for new-truck orders.\nIf you remember, there was a deep plunge in new-truck orders when the spring of\n2020, just before the pandemic shutdowns. But that was to be short lived. Why?\nBecause at the end of the year, new-truck orders took off like a rocket ship. <\/p>\n\n\n\n FTR<\/a> and ACT Research\nboth reported December truck orders coming in just over 51,000 orders. And\nconsider that this was down from November. We are talking a massive number of\nnew-truck orders at the end of the year. Both months are in the top five for\nmost new-truck orders ever recorded. <\/p>\n\n\n\n What happened in the trucking industry to precipitate such\nan increase? Well, the pandemic-impacted economy continues to benefit trucking\ncompanies, simply because of the amount of freight being hauled around the\ncountry. Just consider that April unit orders were under 5,000 and the increase\ntruly comes into focus. Imagine how stellar of a year 2021 will be for\nnew-truck orders. <\/p>\n\n\n\n There are some headwinds to contend with, however. The truck\ndriver supply chain, for example, remains constrained. What will this result\nin? Surging rates, of course. This will be a good thing for fleets, however, as\nmotor carrier profits are expected to soar in the first quarter of 2021. The\nmain reason for this lies in the symbiotic relationship between long haul\nfreight rates and medium-duty demand. The shift in consumer spending away from\nthe service sector and into the e-commerce sector has been very good for\ntrucking companies and other transportation providers. <\/p>\n\n\n\n What Remains for 2021<\/strong><\/p>\n\n\n\n It could very well be that we finally see a huge\ninfrastructure package passed, now that Congress and the White House are in the\nDemocrats\u2019 hands. We could also see much more stimulus passed and help for\nbusinesses. As a result, we should see the economy continue to improve. Motor\ncarriers across the country are already feeling more confident about their\nprospects. <\/p>\n\n\n\n With profits rising, fleets are working hard to replace used\ntrucks, which is driving the higher level of new-truck adoption. With\neverything in the trucking sector headed in a positive direction, expect fleets\nto make big bets on updating their equipment and other assets. <\/p>\n\n\n\n