Employee Classification Act
Legislation is always a double-edged sword. In any given bill, there are good reasons behind the writing…but the value of the potential law is always seen thru the eyes of those who will benefit from its passing and those who will not. The people elect legislators to represent them in hopes they will write, amend, and eventually pass laws that benefit all, not just some. That is an idealistic notion for sure, and sometimes great laws are passed that serve the common good from all angles. In 2008, the Employee Classification Act (ECA) went into effect in Illinois, and it has done anything but that for the construction trucking industry in Illinois. Now nearly 5 years since the effective date, the fallout from this law in plainly seen.
Before the article goes any further, please understand the ITEA is not endorsing any political viewpoint. This article will attempt to paint a picture of how construction trucking in Illinois has been negatively affected by the law and how that in turn compromises safety of the general public.
The purpose behind the ECA is noble. Contractors in the building trades would improperly classify workers as independent contractors in an effort to avoid overhead costs such as worker’s compensation, overtime, payroll taxes, unemployment insurance, etc. Contractors could then charge less for their work than companies that were following the law. In a free market society, may the best price win…but this should not be at the expense of violating labor laws meant to protect the worker.
If someone believes company employees are being improperly classified as independent contractors, an “interested party” can file a complaint. This could be the laborer himself, a contractor who was underbid on the job, or a disgruntled employee. Once the IDOL receives the complaint, a 12-prong test is used to determine if the worker is an employee or not. If the worker is found to be an employee, not an independent contractor or sole proprietor, the company can be fined, required to pay insurance, pension benefits, etc…the pile of financial liabilities grows.
Although opposed by the trucking industry, construction trucking was brought under the ECA umbrella. This law however did not necessarily affect all forms of trucking, such as flatbed, LTL, towing, etc. Trucking companies have successfully been employing qualified brokers and owner-operators for years and they still are. However, the ECA has served to erode the ability of construction trucking companies to train, monitor, and require safety and other compliance issues of those they hire to haul for them.
Example: RoadPro Trucking (fictional) has been awarded a contract from Illinois to provide 5,000 tons of asphalt for a road project. RoadPro only has three of their own company trucks, and their drivers are bona-fide employees and receive all employee benefits. RoadPro hires out the rest of the work to 10 brokers they know. Those brokers then hire friends and other acquaintances they know to haul the asphalt.
The system breaks down at the broker. At no time can RoadPro require the brokers or the drivers the brokers hire to attend training on how they expect their trucking conducted. They cannot require the drivers to work a minimum numbers of hours per day. They cannot require the hired drivers to prove documentation of insurance or safety inspections. In essence, all RoadPro can do is farm out work they fought to obtain and pray the drivers are qualified and do it right…while at the same time putting their good name and liability on the line. Any attempt to control the drivers could render them “employers” in an IDOL investigation.
Just because a driver has a CDL does not make him a good driver, just like a badge does not make the cop. Over the last couple years there have many reports of hired drivers leaving their dump boxes in the air and striking signs, overpasses, and even an oasis. Drivers leased out to brokers may work for more than one broker, and work for 16-20 hours a day. The same drivers may not have insurance as required and operating without valid drivers licenses.
A construction trucking company can demand compliance and performance from their own qualified drivers while they operate their own trucks which have verified safety/compliance paperwork. The same company cannot control any of these with brokers and their hired drivers or they risk becoming an “employer”. How can trucking companies successfully compete for work against brokers who do not have the overhead costs they do for company drivers? How is it equitable for trucking companies with no authority over these drivers and their equipment to assume the risk and loss of contracts if they perform poorly?
In the end, the ECA has opened Pandora’s box of unsafe trucks and drivers on the road. It’s beyond the reach of law enforcement to bring all these drivers and vehicles into compliance. The law needs to change. Trucking companies need the ability to make sure brokers and the owner-operators they hire are well trained, have legit paperwork, and are indemnified. The practice of phony paperwork to skirt tax law is just as wrong, but the law is not balanced. The People of Illinois deserve better as they share the road with construction trucks.
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