This month, Rep. Ferguson introduced H.R. 781, the Guaranteeing Independent Growth Act. If passed, the legislation would codify the independent contractor rule that took effect under President Trump.

The Trump-era rule prioritized two “core” factors – the nature and degree of the individual’s control over the work and the individual’s opportunity for profit or loss – to determine whether a worker should be classified as an employee or independent contractor. If these two factors are not conclusive, consideration would be given to the extent the work requires specialized training or skills, the permanence of the working relationship, and whether the work is part of an integrated unit of production.

In October 2022, the Department of Labor issued a notice of proposed rulemaking to rescind and replace the Trump Administration’s 2021 final rule on independent contractor classification. In contrast to the Trump Administration’s rule, the Biden Administration proposed to evaluate the totality of all factors without predetermining the weight of each consideration. Rep. Ferguson criticized the Biden Administration’s proposed rule as complicating the standards used to determine whether a worker should be classified as an independent contractor or an employee. Further, he stated that his bill would “ensure employers and workers alike have simplistic rules to follow while avoiding burdensome red tape and unnecessary costs.”

The U.S. Chamber of Commerce – who previously argued that the Biden Administration’s proposed rule hinders worker freedom and ignores the economic benefits of the independent contractor model – supports Rep. Ferguson’s legislation. Additionally, the bill is supported by the Heritage Action, National Federation of Independent Business, the Associated General Contractors of America, and the American Trucking Associations.

Also this month, both the House and Senate reintroduced the Protecting the Right to Organize Act. The bill most recently passed the House in 2021, but did not receive sufficient support to advance to a floor vote in the Senate. While the legislation primarily seeks to strengthen workers’ ability to unionize and bargain, it also includes components pertaining to the classification of workers.

Among many other provisions, the PRO Act would amend the National Labor Relations Act’s definition of “employee” to incorporate the ABC test. While more than 30 states use a form of the ABC test to determine a worker’s classification status, the test criteria vary per state. The ABC test proposed under the PRO Act aligns with California’s version, which is considered to be the most stringent form of the ABC test. The legislation would classify any worker performing a service as an employee rather than an independent contractor, unless: the worker is free from control and direction when providing a service; the service is performed outside the usual course of the employer’s business; and the worker routinely engages in an independently established trade, occupation, or business of the same nature their services are performed. This provision would significantly limit the use of the independent contractor model for intermodal drayage drivers.

The Federal Motor Carrier Safety Administration issued a notice proposing changes to the Safety Measurement System – a component of the modal administration’s Compliance, Safety, Accountability program – which uses data from roadside inspections, crash reports, and investigations to identify and prioritize intervention for motor carriers posing the greatest safety risk. The notice proposes changes to the current seven Behavior Analysis and Safety Improvement Categories used to group SMS data: 1) Unsafe Driving; 2) Crash Indicator; 3) Hours of Service; 4) Controlled Substances/Alcohol; 5) Vehicle Maintenance; 6) Hazardous Materials; and 7) Driver Fitness.

When Congress passed the Fixing America’s Surface Transportation Act in 2015, it required the National Academy of Sciences to analyze the accuracy and methodology of BASICs. NAS published its report in 2017, concluding that the SMS program was reasonably structured but provided six recommendations to improve the system. NAS determined that eliminating any BASICs would be premature and suggested FMCSA implement an Item Response Theory model to replace SMS. In 2018, FMCSA published its implementation plan for the NAS recommendations. The plan was reviewed by the U.S. Department of Transportation Office of Inspector General, which advised FMCSA to provide cost estimates for staffing, enforcement, and data collection and set benchmarks for completion of the NAS recommendations. FMCSA stated it would first determine how to move forward with its prioritization methodology before providing the cost estimates and benchmarks.

While the NAS report offered several other recommendations, FCMSA’s proposed changes are limited to the recommendation pertaining to the IRT model. In the notice, FMCSA explained that after studying the IRT model, the agency concluded it was overly complex and would not contribute to improved safety. Instead, FMCSA proposed changes to the existing SMS components.

FMCSA proposed re-structuring the seven BASICs to consist of: 1) Unsafe Driving; 2) Crash Indicator; 3) HOS Compliance; 4) Vehicle Maintenance; 5) Vehicle Maintenance: Driver Observed; 6) Hazardous Materials Compliance; and 7) Driver Fitness. FMCSA proposed to eliminate the controlled substances/alcohol category as a standalone BASIC, and instead incorporate those violations under the unsafe driving BASIC. Since the vehicle maintenance BASIC has the highest number of violations, FMCSA proposes to create a separate BASIC for vehicle maintenance violations that can be identified by drivers during a pre- or post-trip inspection or while operating the vehicle.

For both the hazardous materials compliance and driver fitness BASICs, FMCSA proposes to segment carriers based on whether they primarily operate combination vehicles or “straight” vehicles to compare similar carriers’ crash risks more accurately.

Other proposed changes include: combining the current 959 violations used in SMS and 14 additional violations for operating under an out-of-service order into 116 violation groups for prioritization purposes; simplifying severity weights assigned to violations by using a 1-2 scale rather than the current 1-10 scale, which FMCSA notes has been viewed as overly subjective; adjusting certain intervention thresholds used to prioritize carriers for intervention; focusing on violations that occurred within the past 12 months; and updating the Utilization Factor, which accounts for a carrier’s exposure in the unsafe driving and crash indicator BASICs.

FMCSA considered other changes to SMS but concluded that they would not improve safety. The agency considered incorporating a model to account for differences among state enforcement agencies but decided it would not improve its ability to identify high-risk carriers and would conflict with the goals of the Motor Carrier Safety Assistance Program. To help simplify calculations, FMCSA considered removing severity weights from the crash indicator BASIC, which place higher value on crashes involving an injury or fatality than a tow-away crash. Ultimately, FMCSA determined removing severity weights would have a minimal impact on the carriers identified for intervention. 

Comments on the proposed changes are due by May 16. 

In August 2020, the Intermodal Motor Carriers Conference, an affiliate of the American Trucking Association, filed a complaint with the Federal Maritime Commission against the Ocean Carrier Equipment Management Association, Consolidated Chassis Management, and 10 international ocean carriers. In their complaint, IMCC alleged that the carriers violated the Shipping Act of 1984 by overcharging for chassis and limiting chassis choice, which resulted in $1.8 billion in overcharges in a three-year period.

The respondents disputed IMCC’s claims and argued that FMC did not have jurisdiction over the case. Both parties – the complainant and the respondents – filed requests with the FMC for summary judgments. On February 6, the FMC judge issued a partial summary judgment in favor of IMCC. In the same decision, the FMC judge denied the respondent’s motion for a summary judgment. The judge concluded that, “preferred agreements, where a default chassis provider is selected but not required, are not necessarily unreasonable but that exclusive agreements, which prevent motor carriers from using the chassis provider of their choice for [merchant haulage], are unreasonable and violate the Shipping Act.”

The judge noted that because the eleven ocean carriers have varying regulations and practices in different geographic areas, this decision only applies to Chicago, Los Angeles/ Long Beach, Memphis, and Savannah. Respondents must cease and desist from practices that limit a motor carrier’s chassis choice in these four geographic areas within 30 days of the final decision date. IMCC Executive Director Jonathan Eisen described the decision as a “first step in putting a stop to the practice of foreign-owned shipping lines forcing American drivers and motor carriers to use specific equipment providers.”

Both parties had 22 days from the decision date to appeal FMC’s decision. However, FMC granted an extension, making any appeals due by March 7. According to FMC’s judge, it will be necessary to revisit certain issues, such as reparations and any other remedies, because the decision did not address all allegations made by the complainant.

Since the freight train derailment in East Palestine, Ohio on February 3, lawmakers and the U.S. Department of Transportation have announced various plans and initiatives to improve rail safety.

Following the derailment, USDOT called upon all Class I railroads to improve safety by: granting workers paid sick leave; requiring tank car owners to expedite the phase-in of safer tank cars before the congressionally mandated deadline in 2029; deploying new inspection technologies while maintaining human oversight; providing proactive advance notification to state emergency response teams when transporting hazardous gas tank cars through their states; and joining the Federal Railroad Administration’s Confidential Close Call Reporting Program, which allows railroads and their employees to report unsafe conditions without fear of negative ramifications from the FRA or reprisal from their employers.

Additionally, USDOT outlined various ways Congress could help the department improve safety. Specifically, USDOT asked Congress to advance legislation to: Some steps to: increase the maximum fines USDOT may issue to rail companies for violating safety regulations – the current maximum penalty is $225,455; strengthen rules on high-hazardous shipments; modernize braking regulations and increasing the use of electronically controlled pneumatic brakes; accelerate the phase-in of safer tank cars to transport hazardous materials; and provide more funding for first responders to receive expanded hazardous materials training.

Ranking Member of the Subcommittee on Railroads, Pipelines and Hazardous Materials Donald Payne, Jr. (D-NJ) applauded USDOT’s reaction, describing the response as “smart recommendations that will improve freight train and public safety for the entire industry.” He added that he would work with USDOT Secretary Buttigieg to increase the maximum fines. Republican leaders on the Transportation and Infrastructure Committee are focusing on the Environmental Protection Agency’s response. Chair of the Subcommittee on Railroads Troy Nehls (R-TX) promised to work in a bipartisan effort to improve freight rail safety.

On March 1, Sen. Brown (D-OH) and five bipartisan cosponsors introduced the Railway Safety Act of 2023. The legislation proposes to implement many of the increased safety regulations recommended by USDOT. The bill would direct USDOT to issue regulations to establish new safety requirements and procedures for trains carrying hazardous materials, initiate audits of rail car inspection programs, and require that all Class I railroads install a hotbox detector along every 10-mile segment of track over which trains carrying hazardous materials operate. The legislation also incorporates a two-person minimum crew size requirement for most freight train operations. Additionally, the bill seeks to significantly increase the maximum fines USDOT may issue for safety violations and expand hazardous materials training for first responders through increased registration fees paid by Class I railroads.

The Senate Committee on the Environment and Public Works will hold a hearing on March 9 to examine local, state, and federal responses to the train derailment and ongoing efforts to address the incident’s public health and environmental impacts. Some of the witnesses include EPA Region V Administrator Debra Shore, President and CEO of Norfolk Southern Alan Shaw, and Senator Sherrod Brown (D-OH), among others.