Transportation Law Update: Iowa Legislature Clarifies Law on Independent Contractors in Transportation

01.18.2021

On June 18, 2020, Governor Kim Reynolds signed Senate File 2296 into law. Click for link to Senate File 2296. This new Act addresses individuals who purport to be independent contractors in the operation of certain commercial motor vehicles creating a distinction between employees and independent contractors.

The Act amends Chapter 85 (workers’ compensation), 91A (wage payment collection), 91D (minimum wage), and Chapter 96 (unemployment compensation). Pursuant to the Act, independent contractors are now defined as an owner-operator who, while performing services, owns and operates a vehicle which is registered and licensed as either a truck, a truck tractor, or a road tractor by a governmental agency, if the following conditions are met: (1) the owner-operator is responsible for the vehicle’s maintenance, (2) the owner-operator has the burden of the operating costs of the vehicle, (3) the owner-operator is responsible for providing the vehicle’s operating personnel, (4) the compensation is related to the work the owner-operator performed, (5) the owner-operator has control of the detail and means of service, and (6) the owner-operator is in a contract that specifies the relationship as an independent contractor relationship and not that of an employee.

This Act further provides definition to the Workers’ Compensation Chapter (Chapter 85). In order to own a vehicle, one must have legal title to the vehicle or be a party to an agreement for conditional sale or lease of the vehicle, as long as there are conditions that the individual would have a right of possession to the vehicle upon completion of the agreement.

Iowa Code Chapters on Wage Payment Collection (Chapter 91A) and Minimum Wage (Chapter 91D) are amended to include the clarification that independent contractors are not employees. The Iowa Code Chapter on Employment Security—Unemployment Compensation (Chapter 96) further provides that an employing unit does not employ an independent contractor.

Contact John F. Fatino for more information about trucking and transportation matters at (515) 288-6041 or fatino@whitfieldlaw.com. Elaina J. Steenson, J.D. candidate, Drake University Law School, assisted in the preparation of these materials.

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