New York Passes Bill to Define Owner-Operator Classification Status

The New York State Legislature passed a bill late last week to clearly define independent owner-operators in the trucking industry and crack down on employers who use the owner-operator model to avoid giving employees certain benefits.

The state’s trucking industry and the Teamsters union came out in support of the measure after industry and labor representatives negotiated the bill’s terms last week, the groups said.

The bill goes to Gov. Andrew Cuomo (D) for his signature. His office did not return a request for comment.

Kendra Hems, executive director of the New York State Motor Truck Association, said the bill would allow the trucking industry to continue to use the owner-operator model, with few modifications, while cracking down on carriers who abuse the model.

“We felt that there was a need for a definition, but we wanted to make sure it allowed legitimate independent contractors to continue to operate in the way that they are today,” she told Transport Topics. “If we have cases out there where carriers are utilizing independents that truly are not, and in fact really should be employees, then we feel that should be addressed as well.”

Assemblyman Keith Wright (D) introduced the bill in February. In its original form, it would have created a presumption that all truck drivers in the state are employees, meaning carriers would have to provide worker’s compensation, pay unemployment insurance and withhold taxes, among other actions.

Carriers would have to prove independent contractor status using a three-prong test to show that their drivers truly operate as independent businesses.

NYSMTA opposed that bill, saying it would wipe out the independent contractor model. But Wright asked industry and labor representatives last week to negotiate a bill that both could support.

The new bill allows truck drivers to skip the three-prong test and instead use a different test specific to the trucking industry.

“The bill clearly defines what an independent contractor is within the commercial-goods transportation industry,” said Jeanine Johnson, Wright’s chief of staff. The state did not have a definition for independent contractors in trucking, and instead, many state agencies had their own guidelines.

“There’s going to be better pay, better benefits and better working conditions for thousands of truck drivers,” said Nell O’Connor, a spokeswoman for Teamsters Joint Council 16, which represents local unions in and around New York City. “That’s what we wanted all along.”