Workers Compensation Issues on the Rise

TIA has received feedback from multiple Members recently about the State of New York cracking down on workers’ compensation rights for owner-operators, which is part of a larger effort by multiple states to crack down on employee misclassification. Since New York has been the topic of interest for our Members recently and a focal point of the State to crack down on misclassification, this article will focus on that State’s workers classification laws and how they apply to 3PLs.

Specifically, the State of New York requires New York-based employers to provide workers compensation, with the following allowable exceptions:

  • If the business is owned by one individual and there are no employees, leased employees, borrowed employees, part-time employees, unpaid volunteers, or subcontractors.
  • If the business is a partnership or corporation and has no employees (based on the above specifications).
  • If the business is owned by one or two people, and those people own all stock and offices, and there are no additional employees.

Obviously, the above exemptions would include owner-operators based in the State of New York. With this being the case, you would need to look to the Commercial Goods Transportation Industry Fair Play Act which took effect on April 14, 2014. The statute specifically states:

“Under the Fair Play Act, a driver who possesses a state-issued driver’s license, and who transports goods in the state of New York while operating a commercial motor vehicle (as defined by law), is presumed to be the employee of a commercial goods transportation contractor (as defined by law) who compensates the driver.”

This definition places 3PLs and motor carriers who utilize owner-operators between a rock and a hard place in terms of compliance, but there are a few things you can do to protect yourself before action by the State is attempted.

TIA has prepared a guidance document for our Members to utilize and a “Certificate of Election” to have your motor carriers sign. TIA recommends that its members request certificates of workers compensation insurance from every carrier with whom they do business and put those certificates in the carrier’s file. Without a written certificate of exemption, however, these individuals retain the right to claim coverage. In the trucking industry, the result is that many owner-operators may not have workers compensation coverage but will file a claim if they are injured. The state will look to the contracting entity to cover the cost.

TIA’s position in such situations is that brokers are independent contractors who undertake to arrange transportation but do not take responsibility as carriers. Because brokers do not act as carriers, they do not and cannot subcontract their duties to motor carriers. Nevertheless, some states continue to try and argue that motor carriers are subcontractors to brokers. Further, that the brokers are liable for workers’ compensation claims not covered by the motor carrier because the brokers are prime contractors who are, in effect, employing the motor carrier as a subcontractor.

TIA additionally recommends that you all review your written contracts and evaluate actual day-to-day relationships with owner-operators for compliance with the applicable State laws. We highly recommend being proactive with this process, because after a claim has been filed in a State, the situation gets more complicated.


If you have any questions, please contact TIA Advocacy (advocacy@tianet.org).

Down the Road, the 117th Congress and Transportation

Scott Marks | Government Affairs Manager | TIA

The 2nd session of the 116th Congress has been a whirlwind, packed with a marathon markup of a $2 trillion infrastructure package, COVID-19 response packages, and a lot of pettifogging by both sides of the aisle. Coming up in a couple of weeks will be Infrastructure Week. This is a dedicated week focused on the shared transportation priorities between the Executive and Legislative Branches of the Federal Government to fix America’s crumbling roads, bridges, and other infrastructure needs.

This Infrastructure Week feels a lot like the past ones as once again, the United States Congress has yet to send to the President’s desk a new sweeping, comprehensive surface transportation reauthorization. Instead, it will most likely pass a continuing resolution which means carrying over the spending levels from the previous authorizing legislation. Our United States freight system is about four million miles of highways and roads; 140,000 miles of rail lines; 25,000 miles of inland and coastal waterways; 2.8 million miles of pipelines; and more than 5,000 public airports. We must pass into law a piece of legislation that is just as powerful as the system it looks to overhaul.

Next Congress needs to feel the urgency to pass a sweeping, up-to-date, surface transportation bill that takes into consideration all aspects of the supply chain, shippers, brokers, and carriers. The bill needs to be expansive, while at the same time, empowering states to fix their non-federal highways. Studies are conclusive and substantive on the issue of dollars lost because of the crumbling infrastructure, and as the Department of Transportation’s newly released National Freight Strategic Plan states, the issue will continue to worsen: 

“Freight shipments are expected to increase by 22.4 percent over the next 20 years. Investments in infrastructure capacity and operational improvements will be required to meet rising demand for freight. Yet, freight system performance can be hindered by regulatory, financial, and institutional barriers that raise the economic costs of freight movements.”

Our message to Congress: you must empower states with grants, fund federal programs to expedite construction while at the same, making regulatory changes, we know that pumping money into a problem does fix the underlying issue. Lay out a roadmap for brokers and 3PL’s to certify what a safe carrier is (this is especially crucial as trucks move 72% of Americas Freight), throw out the current audit safety rating system, overall the process to include data from states (that is fair to motor carriers and determines fault for crashes), and continue to allow the transportation industry to be fair, open and competitive without bogging it down with burdensome transparency regulations.

There is a lot to be done for the rest of the Congress and in the 117th Congress, TIA Government Affairs looks forward to working closely with our members, Members of Congress and their staff, the Department of Transportation, and other key players in the Executive Branch and private sector key stakeholders.


If you have any questions, concerns, or want to learn more about TIA’s Advocacy efforts, please contact TIA Government Affairs at Advocacy@tianet.org.

DOL Notice Of Increase Minimum Wage For Those Individuals Involved In Contracts With The Government

Scott Marks | Government Affairs Manager | TIA

February 12, 2014: President Barack Obama signs and issues Executive Order 13658. This order raises the wages of those individuals who are used to facilitate contracts with Government entities. This minimum wage was to be $10.10 at the time of the Executive order.

On September 19, 2019, the Department of Labor published an additional Notice in the Federal Register to announce that, the notice stated beginning January 1, 2020, the Executive Order 13658 minimum wage rate is increased to $10.80 per hour (84 FR 49345). This Executive Order minimum wage rate generally must be paid to workers performing work on or in connection with covered contracts.

In order to stay competitive, keeping up with inflation and deter constant turnover among employees, moving forward on, Jan 1, 2021 “workers performing work on or in connection with federal contracts covered by the aforementioned Executive Order 13658, Establishing a Minimum Wage for Contractors (the Executive Order or the Order), beginning January 1, 2021. Beginning on that date, the Executive Order minimum wage rate that generally must be paid to workers performing work on or in connection with covered contracts will increase to $10.95 per hour.”

For the TIA Members who handle government freight, if they have sales associates that they use to enter contracts with the Government, they would have to pay them the updated rate of $10.95. Please find the Department of Labor (DOL) poster that outlines the new regulations here or view the newly released rule here.

Blog 6 – GSA Drops Major National Security Rule, TIA Members Are Affected

Scott Marks | Government Affairs Manager | TIA

Starting August 13, 2020, members will no longer be able to both enter into contracts for service with the government and have in their operations what are called “covered telecommunications.” Member companies must begin now to certify that their internal processes do not contain any one of a multitude of malicious Chinese companies. This regulation comes from legislation that passed in 2018, H.R. 5515, the John S. McCain NDAA, specifically section 889 parts (A) and (B).

Part (A), while important, is not directly germane to the TIA membership base. This part has to do with procurement and acquisition. The head of a government agency may not move forward with any acquisition of services or technology that has “covered technology.”

Part (B) directly impacts our members, it can’t be stressed enough, if you are a member of TIA starting August 13th if you have use a covered service in your operations you will not be able to move freight for the government.

A covered telecommunication technology means the following: Any service and equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of those entities) and certain video surveillance products or telecommunications equipment services produced or provided by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of those entities).

Members must take the time, review internal procedures, and ensure they do not use one of the technologies in their office. A contractor may certify that it does not use covered equipment or services if its “reasonable inquiry” does not identify such use. A “reasonable inquiry” is one “designed to uncover any information in the entity’s possession about the identity of the producer or provider” of covered equipment or services used by the entity.

It is important to note, reasonable inquiry does not require an internal or third-party audit, it just means you must be able to show affirmatively that you took steps to uncover if the entity is in possession of covered telecommunications technology. This will be a deciding factor for contracts starting August 13, 2020.

The government agencies implementing this regulation have asked for broad feedback as they fine-tune the rule to be more business-friendly while still posturing the regulation as a national security tool. If you’re interested in providing feedback as to how this will impact your business, do not hesitate to reach out.

Like all legislative action, TIA Government Affairs will monitor, track, and respond in real-time. We work directly with our conferences and committees and the organization at large to ensure our members are up to speed.

To view our resource on this rule, click here

To view the rule in its entirety, click here


If you have any questions, concerns, or want to learn more about TIA’s Advocacy efforts, please contact TIA Government Affairs at Advocacy@tianet.org.

2020 TIA Policy Forum: Be Present and Be Engaged

In just a few weeks, TIA’s Government Affairs team will be hosting our first virtual fly-in on September 30 – October 1. We urge all of our members to get signed up and get engaged with their Members of Congress. While we understand and are disappointed that we will miss seeing everyone in person and physically walk the halls of Congress, we are excited about the virtual policy forum. This will allow TIA Members to still connect with their Members of Congress and advocate on behalf of their business and the 3PL industry. Registration is complimentary to TIA Members. Please use this link to register: Here.

Our members play a vital role in our mission on Capitol Hill, they not only set the policy we fight for, but also support our TIAPAC efforts and directly deal with the ramification of our efforts. There is not a better example than the supply chain rate transparency issue, if our government affairs team did not activate our Members at the grassroots level, this issue would have likely gained more steam and possible legislative changes could have been discussed. Lawmakers crave and thrive on connections with local business owners and their constituents, in the end, you all are the people that decide if they are reelected or not, and your voice matters greatly to them.

Please, join us from September 30 – October 1 as we take the hill virtually, we want our message to be heard in offices throughout the United States. TIA staff will be coordinating to ensure productive meetings by both state and district. TIA is a leader and the voice of the 3PL industry, staff on Capitol Hill know this, Members of Congress know this and with your help, we can deliver this strong statement once again.

About the 2020 TIA Policy Forum:

  • Two-Day Virtual Event with Congressional Meetings, High-Level Briefings & Exclusive Networking Opportunities
  • Advocate on Behalf of the 3PL Industry & Your Business
  • Build Personal Relationships with Your Elected Officials
  • Meet Your Federal Lobbyists & Learn How They Protect 3PLs
  • TIA Members-Only Event
  • Registration Fee: Complimentary for TIA Members

 

If you have any questions or concerns, please do not hesitate to reach out and inquire with Advocacy@tianet.org. TIA Government Affairs is here to serve you. We need as many people signing up for this event as possible. Please use thins link to begin the registration process: Here. Thank you and we look forward to seeing you (virtually) soon.

Plans for the TIA Airfreight Logistics Conference

The Transportation Intermediaries Association (TIA) is comprised of several Conferences and Committees which help guide external positions while shaping internal policies. One area in which TIA sees as a major area of growth is the Airfreight Logistics Conference. This is quickly becoming a popular Conference, not only for members who are already in that field but TIA members that want to expand their current operation and enter into a new mode of moving freight.

The Airfreight Logistics industry is an exciting segment of the third-party logistics industry, with great potential growth areas for 3PLs to facilitate the transportation of airfreight. The Conference will look to broaden its influence and knowledge of Airfreight logistics by engaging our members with great speakers and a program which adds value to our member companies.

While the details remain in negotiations, I am excited to announce that on our next quarterly call we will have a speaker from Transportation Security Administration (TSA) Indirect Air Carrier Program (IAC) to provide a current overview of the industry from a regulatory perspective and how this will change in the future. Additionally, we will engage with the speaker with questions on the future on air cargo and screening programs. The call will be open to non-conference members, this means that members of TIA that are not yet apart of this Conference will have the ability to join and be part of this important meeting.

The IAC is just one of the many associated programs at TSA, including:

  • 100 Percent Screening Requirement;
  • Air Cargo Screening Technology List;
  • All Cargo Aviation Programs;
  • Consent to Search or Inspection;
  • Certified Cargo Screening Program; and
  • Known Shipper Management System.

As part of the strategic plan for TIA over the next years, TIA will look to increase its role in the international logistics arena, by not only being the U.S. Member of FIATA, but serving as one of the voices to provide industry stakeholders and the general public with the necessary information and resources. As always, we look forward to hearing from our members on how TIA can provide more value for your company.

International Logistics Conference: A Path Forward

Scott Marks | Government Affairs Manager | TIA

At Transportation Intermediaries Association (TIA), we are governed by a board of directors and guided by a number of educational Conferences and Committees which help us to develop best-in-class internal procedures and external positions. These Conferences guide our legislative efforts and priorities by developing the policy positions of the TIA.

One of my top focuses at TIA is coordinating and developing the Airfreight and International Conferences. As one can imagine, there are a number of Conferences in the space but the one I am enthusiastic to grow is the International Logistics Conference. Given TIA is the U.S. representative to the International Federation of Forwarders Associations (FIATA), this Conference has a huge potential for growth, and I am focused on expanding this Conference on two fronts: quantitatively and qualitatively.

I am constantly focused on encouraging TIA Members to be a part of the International Logistics Conference by connecting with them directly, through surveys and day-to-day activities. The Government Affairs team consistently works with TIA Members to discuss legislative issues and during these conversations, we encourage members to serve on the Conference or Committee of their choosing.

As we continue to strive to provide value to the TIA Members who serve on our Conferences and Committees and build the International Logistics Conference qualitatively, we are working to increase involvement from guest speakers and from the federal agencies that oversee the Conferences and Committees areas of focus. We are in the process of solidifying a guest speaker who is a lawyer focusing on United States Mexico Canada Agreement (USMCA) implementation, in addition to members of the Asociación de Operadores Logísticos de México (ALOM), which is Mexico’s version of TIA.

We are confident that an expert on USMCA implementation will be a great resource to the members of the International Conference. I envision a brief presentation by the subject matter expert followed by an open-ended question and answer session. I urge members to engage our guest speaker and bring thoughtful questions and comments. An expert like this can help bring more resources to our members’ international logistics team as our country begins to transition out of the North American Free Trade Agreement and into the USMCA—the recent trade deal negotiated by President Trump.

As for AOLM, the Mexican freight brokers association, we plan on engaging this organization and building a relationship for the future. I participated on a call TIA had with the organization’s leadership in May. These introductions have a way of building on themselves and becoming an invaluable connection when the proper occasion arises. We envision great synergies between TIA and AOLM down the road, as both organizations continue to build and grow their relationship.

The future is bright for TIA’s International Logistics Conference. It currently consists of more than 20 members and only continues to grow. I expect this will be a leading Conference within TIA, will be a beacon for policies and resources within the third-party logistics (3PL) industry, and a resource for the Congressional committees on Commerce, Transportation, Foreign Affairs and others. I look forward to bringing international issues to the forefront at TIA through growing our membership, hosting informative guest speakers and panel discussions, and utilizingTIA Members’ expertise on the issues facing the industry.

TIA continues to be the voice of the 3PL industry, representing over 1,800 member companies across North America. We are committed to expanding TIA’s network in the transportation industry and understand that requires focusing on freight that crosses borders. Our International Logistics Conference plays a key role in our expansion and will help us continue to learn, grow, and adapt to a new 21st century economy and supply chain.

New Restrictions on Government Freight Forthcoming

In order to combat the national security and intellectual property threats that face the United States, Section 889(a)(1)(a) of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year 2019, prohibits the Federal Government from procuring or obtaining or extending or renewing a contract to procure or obtain, “any equipment system, or service that uses covered telecommunications equipment or serves as a substantial or essential component of any system, or as critical technology as part of any system.”  This will include 3PLs, who have contracts with the Federal Government and the motor carriers they utilize to haul the Government’s freight. This rule goes into effect on August 13, 2020.  

Section 889 is divided into two parts, while section A is important it is not germane to our members.

  • Section A: prohibits the direct sale or acquisition of product or service to the federal government that contains a covered technology.

Section B: prohibits any company or individual who enters into a contract or uses a sub-contract to provide a service or product to the Federal government, from using covered technology.

The term covered technology in this context refers to malicious, state-owned tech companies, the following companies are banned:

Covered entities mean any of the following:

(A) Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities).

(B) For the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities).

(C) Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country.

if you do contract work for the government, including hiring subcontract motor carriers, you must stay in compliance with section 889 (b). You must ensure your company and the motor carriers that you subcontract with do not utilize any the above covered technology companies. The date this goes into effect is August 13, 2020.

TIA will remain on top of this issue and the impacts to the 3PL industry. TIA awaits language from the General Services Administration (GSA) Transportation Freight Management as they plan to release similar language that centers around the tender system that brokers and motor carriers utilize.

If you have any questions, please contact TIA Advocacy (advocacy@tianet.org).

H.R. 2, the “Moving America Forward” Legislative Briefing Paper

Last week, the House Transportation and Infrastructure Committee held a marathon markup on the “Investing in a New Vision for the Environment and Surface Transportation (INVEST) in America Act,” this 16 hour markup ended in a mostly partisan bill which will likely be changed further when its brought to the full House for a vote and even further if the Senate takes up the legislation.

This legislation becomes a section into a larger package called the “Moving America Forward Act,” this package is a $1.5 trillion infrastructure package.

  • The INVEST in America Act, a nearly $500 billion investment to rebuild and reimagine the nation’s transportation infrastructure by fixing our crumbling roads and bridges, improving safety, reducing gridlock, and putting the U.S. on a path toward zero emissions from the transportation sector by cutting carbon pollution, investing in public transit and the national rail network, building out fueling infrastructure for low- and zero-emission vehicles, and deploying technology and innovative materials. The INVEST in America Act is fueled by American workers and ingenuity thanks to strong Buy America provisions and labor protections.
  • Invests in schools with the “Reopen and Rebuild America’s Schools Act”, which funds $130 billion in school infrastructure targeted at high-poverty schools with facilities that endanger the health and safety of students and educators. This investment will help students get back to school and create more than 2 million jobs to help workers get back to work.
  • Addresses structural challenges and upgrades childcare facilities by leveraging a 5-year, $10 billion federal investment to generate additional state and private investments in making sure that childcare settings are safe, appropriate, and able to comply with current and future public health directives.
  • Invests over $100 billion into our nation’s affordable housing infrastructure to create or preserve 1.8 million affordable homes. These investments will help reduce housing inequality, create jobs and stimulate the broader economy, increase community and household resiliency in the face of natural disasters, improve hazardous living conditions, and increase the environmental sustainability of our housing stock.
  • Protects access to safe drinking water by investing over $25 billion in the Drinking Water State Revolving Fund and other programs to ensure all communities have clean drinking water and to help remove dangerous contaminants like PFAS from local water systems.
  • Modernizes our energy infrastructure for a clean energy future by investing more than $70 billion to transform our electric grid to accommodate more renewable energy, expand renewable energy, strengthen existing infrastructure, help develop an electric vehicle charging network, and support energy efficiency, weatherization, and Smart Communities infrastructure.
  • Delivers affordable high-speed broadband Internet access to all parts of the country by investing $100 billion to promote competition for broadband internet infrastructure in unserved and underserved communities, prioritizing those with persistent poverty. Gets children connected to remote learning, closes broadband adoption and digital skills gaps and enhances payment support for low-income households and the recently unemployed.
  • Modernizes the nation’s health care infrastructure by investing $30 billion to upgrade hospitals to increase capacity and strengthen care, help community health centers respond to COVID-19 and future public health emergencies, improve clinical laboratory infrastructure, support the Indian Health Service‘s infrastructure, and increase capacity for community-based care.
  • Modernizes and strengthens the United States Postal Service by investing $25 billion to modernize postal infrastructure and operations, including a zero emissions postal vehicle fleet, processing equipment and other goods.
  • Promotes new renewable energy infrastructure by incentivizing the development of wind and solar on public lands and building a workforce for offshore wind.
  • Promotes investments in our communities by spurring private investment through the tax code, through a revitalized Build America Bonds program, expansions of Private Activity Bonds, and significant enhancements to the New Markets Tax Credit and the Rehabilitation Tax Credit.

 

Speaker of the House Nancy Pelosi (D-CA) has made it clear that she plans to bring this package to the House floor for consideration before the fourth of July holiday.

TIA Government will continue to monitor the full package and keep all appropriate conferences abreast of any updates while keeping in mind a $1.5 trillion package is unlikely to pass the Senate.


Support Documents

Moving Forward Framework outlines the transportation aspect of the larger package.

You can view Chairman Neil’s press release on the issue: Here.

You can view a fact sheet on the full package: Here.

You can view the section-by-section of the full package: Here.

You can view the full package text: Here.

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