Appendix E – Insurance. There is a new ACORD form changing the way insurance verification is processed. So what is the ACORD form? ACORD is a non-profit organization responsible for the publication and maintenance of standard insurance forms, such as applications, certificates and binders. These forms are widely used and supported in the insurance industry, and ACORD regularly monitors and revises these documents when necessary. The ACORD form known as the certificate of insurance provides a summarized version of a policy and is commonly used to provide evidence of coverage in force. Logistics providers should be familiar with these forms when verifying the insurance coverage of carriers and subcontractors with whom they work. Recently, ACORD updated its forms to replace certain text regarding policy cancellation, as noted below: Old Policy Cancellation Text. Should any of the above described policies be cancelled before the expiration date thereof, the issuing insurer will endeavor to mail__ days written notice to the certificate holder named to the left, but failure to do so shall impose no obligation or liability of any kind upon the insurer, its agents or its representatives. New Policy Cancellation Text. Should any of the above described policies be cancelled before the expiration date thereof, notice will be delivered in accordance with the policy provisions. The biggest change, as noted above, is that the insurance company now clearly has no obligation to inform certificate holders if a policy is canceled. With the new verbiage, most “policy provisions” only require that the first named insured be notified that a policy is canceled. Typically, even an additional insured does not need to be notified. As a result, the new verbiage will likely make it more difficult for brokers, forwarders, shippers and other interested parties to monitor whether a carrier or subcontractor’s coverage remains in force once any time has transpired since the certificate was issued. It is important for logistics providers to verify the insurance of the carriers and subcontractors they work with to reduce their liability for negligent selection and reduce the overall risk of an uninsured loss. While a logistics provider or shipper could require a new certificate prior to each new shipment, this would be onerous and entail significant resource demands. One alternative could be a periodic requirement for evidence of insurance, such as monthly or quarterly, to provide statistical risk mitigation. The process would be less onerous, but would not guarantee the existence of coverage. What is the Cargo Insurance Requirement/BMC-32? The BMC-32 provided proof of a motor carrier’s Cargo Insurance policy and was originally required by the Interstate Commerce Commission after many trucking companies experienced financial problems. The BMC-32 is an endorsement to a Cargo Liability policy that guaranteed a minimum level of coverage for loss or damage in transit at $5,000 per shipment. Why is this important? Claims submitted under the BMC-32 endorsement were not subject to deductibles or exclusions and were paid by the insurance company even if the carrier declared bankruptcy. This prompted many insurers to financially underwrite their clients based on this financial obligation. Now, because the FMCSA is no longer requiring Cargo Insurance coverage for motor carriers, insurance companies may not require a review of a Motor Carrier’s financials as often since this is no longer a potential claim. In the final rule, the FMCSA stated that elimination of the BMC-32 endorsement would make it “less convenient to confirm the existence of cargo insurance.” Logistics providers know that verifying insurance is an important part of the carrier qualification process. With the implementation of this new rule, however, logistics providers must find a new method for verification, such as obtaining certificates of insurance from the carrier. If the logistics provider obtains certificates of insurance from the carrier, they must remember to verify coverage limits and effective dates. This process has become more cumbersome, however, with the issuance of the new ACORD insurance form, as the certificate holder may not be informed if a policy is expired. With the elimination of the Cargo Insurance requirement, it’s more important than ever for transportation brokers to investigate a carrier’s safety record, claims history and insurance status. If a claim occurs, shippers or injured third parties could allege that the broker engaged in negligent selection. Unlike other types of insurance, cargo policies are unique and include exclusions that vary from insurer to insurer. If a carrier declares bankruptcy or if their limits are insufficient or if coverage is excluded, the logistics provider can be held liable. How can logistics providers protect themselves? Several types of liability insurance policies are available to protect logistics providers when they are held liable for claims arising from cargo loss or damage and third-party liability. Non-following form Contingent Cargo Insurance provides coverage when the motor carrier's insurance does not pay a claim and the motor carrier is unable to pay. Coverage is typically triggered only in situations where the motor carrier is negligent. Errors and Omissions Insurance protects the transportation broker if an error or oversight in the course of business causes a customer to suffer a financial loss. A transportation broker should ideally obtain a combined policy form with Errors and Omissions Insurance and non-following form Contingent Cargo coverage. A combined form is not the same as purchasing separate policies. Separate policies can create both gaps as well as overlaps in coverage. Contingent Automobile Liability Insurance is also available to protect transportation brokers when they are held liable for death, bodily injury or third party property damage claims as a result of the motor carrier's negligence. Policies widely vary and coverage is subject to numerous conditions or exclusions. On a Contingent Cargo policy for example, some policies could limit coverage in a variety of instances. Typical limitations include a locked vehicle endorsement, which only provides coverage if the vehicle is locked. Another frequent requirement is for the broker to obtain evidence of insurance prior to the transit of a brokered load. The timeframe may vary, and the condition could state that a certificate of insurance needs to be on file annually, quarterly or perhaps monthly, but with the increasingly cumbersome requirement of verifying certificates of insurance, this could place significant resource demands on your business if a new certificate of insurance is required prior to every shipment. It's important to work with an insurance provider who understands your business and regularly reviews your policy with you. Limitations may not be realized until after a claim has occurred and these conditions apply. Appendix F. - Mexican Logistics. Importing and Exporting. The handling of Mexican traffic is quite different from shipping domestically. Many factors influence the flow of goods between the U.S. and Mexico. Some of these factors are the buyers’ and sellers’ needs, U.S. and Mexican Government regulations, market conditions, and currency exchanges. Importing and exporting may seem difficult but it is not impossible since thousands of trucks cross the border each day. Customs Brokers and Forwarding Agents. Regardless of whether the shipment is to or from Mexico, there are always U.S. and Mexican customs brokers involved. Typically, the consignee will select the customs brokers. It takes an average of two days to prepare documents, pay applicable duties, and obtain customs clearance. Therefore, it is important to provide complete and correct documentation two days prior to the freight arriving at the border so it can progress rapidly through customs. Generally, trailer detention charges at the border average $75 per day. Import and Export Documents. Shippers are responsible for providing the proper and complete documents to the customs broker or forwarding agent. The standard export documents are: Commercial Invoice. A complete commercial invoice should include the following: seller’s federal tax ID number, descriptions, quantities, unit costs, total cost, weights, number of packages, serial numbers, and the buyer’s and seller’s names and addresses. Catalog numbers or style numbers alone without a complete description of the merchandise are not allowed. Packing List. The packing list provides additional description required by the customs broker for classification. When preparing packing lists, include each product’s function and composition. Itemize the contents of each box or crate. Number the packing lists and packages unless the contents of all packages are identical. Import and Export Licenses. Some products require import or export licenses. Check with your customs broker to see if they are required. Most licenses take several weeks to many months to obtain. Bill of Lading. A copy of the bill of lading will help expedite a shipment at the border. Bills of lading should indicate the names, addresses, and telephone numbers of the consignee and customs broker or forwarding agent. U.S. Customs Documentation. For most U.S. exports, a Shippers Export Declaration SED. is required. The shipper or their customs broker can prepare this document. U.S. Customs requires a Formal Entry for most U.S. imports. Inbond documents are used when shipments are not cleared at the point where they enter the U.S. This merchandise might clear Customs at an inland port or possibly not even enter the commerce inside the U.S. at all. The T and E, IE, and IT are the most common inbond documents. Mexican Customs Documentation. The “Pedimento” is the document used in Mexico for imports and exports. NAFTA Certificate of Origin. Regardless of whether a shipment is going into or coming out of Mexico, there will always be U.S. and Mexican customhouse brokers involved. Typically, the importer of record will select the customhouse broker and is responsible for any customs duties, freight forwarders and customhouse broker related fees. The shipper or seller. is usually responsible for the preparation of all export documentation including but not limited to: the commercial invoice, packing list, bills of lading and the “Certificate of Origin”. Since the North American Free Trade Agreement NAFTA. was approved, there have been some changes to the paperwork that must accompany freight moving between the U.S., Canada, and Mexico. The new NAFTA Certificate of Origin must be used if the goods shipped were manufactured in the U.S. or Canada. What Is It? The NAFTA Certificate of Origin also referred to as CBP form 434. is a uniform document created to make sure that goods imported into the member countries U.S., Canada and Mexico. qualify for preferential tariff treatment under NAFTA. There are copies of this document printed in English, French, and Spanish. The exporter determines which version to use, but the importer must provide a translation to their customs officials if requested. A NAFTA Certificate of Origin can cover a single shipment or multiple shipments over a 12-month period called a blanket certificate.. Claims for preferential treatment under NAFTA can be made up to four years from the date the document was signed. This would come into play for shipments that are imported in-bond and held at a warehouse until they are ready for use. When Is It Used? A NAFTA Certificate of Origin is required for all shipments of U.S., Mexican, or Canadian origin that are valued at US $1,200.00 or more. However, it is recommended that a NAFTA Certificate of Origin accompany each shipment to expedite the clearance process. Why Is It Important? This form must be used to get the preferential tariff treatment provided for in NAFTA. Without a valid NAFTA Certificate of Origin, there is no break on tariffs. What Must the Exporter Do? The exporter has the responsibility for completing and signing the NAFTA Certificate of Origin. If the exporter has not actually produced the goods, the exporter can still complete the Certificate relying on: His/her knowledge of the origin of the goods The producer’s written statement of the origin of the goods A Certificate of Origin for the goods provided by the producer Exporters are also required to keep records of export for at least five years maybe longer depending on their own country’s requirements.. Any changes to the shipment that could affect the accuracy of the certificate must be communicated to anyone the Certificate was given to. What Must the Importer Do? The importer is responsible for providing a NAFTA Certificate of Origin to his/her country’s customs officials upon request. The importer must also provide a corrected import declaration and pay the accompanying duties if there is reason to believe the original Certificate was not accurate. Like exporters, importers must keep records of imports for at least five years maybe longer depending on their own country’s requirements.. Where Can I Get the Forms? The easiest way to get the NAFTA Certificate of Origin is to download it directly from the U.S. Customs and Border Protection CBP. website at http://www.cbp.gov. After you log onto the site, go to the forms section and look for form CBP 434. The easiest way to get the NAFTA Certificate of Origin is to download it directly from the U.S. Customs and Border Protection CBP. website at http://www.cbp.gov. After you log onto the site, go to the forms section and look for form CBP 434. Where Can I Get More Information About NAFTA? You can get more information on NAFTA and Certif-icates of Origin at the CBP website mentioned above and also from the NAFTA Secretariat at http://www.nafta-sec-alena.org. The following are guidelines about how a NAFTA Certificate of Origin should be completed. The back of the form not shown here. contains detailed instructions on how to complete it and provides references. Completing a Certificate of Origin. 1. The full legal name, address including country. and legal tax identification number of exporter: Canada. use the employer number or importer/exporter number assigned by Revenue Canada. Mexico. use the federal taxpayer’s registry number RFC. U.S. use the employer’s identification number or social security number. 2. Complete these fields if the Certificate covers multiple shipments of identical goods that are imported for a period of up to one year. FROM is the date the Certificate goes into effect; TO is the date the Certificate expires. 3. The full legal name, address including country. and legal tax identification number of the producer. If goods from more than one producer are included on the Certificate, attach a list of additional products including addresses and tax identification numbers. Reference them to the applicable goods described in field #5. 4. The full legal name, address and tax identification number of the importer. If not known, state “UNKNOWN”. If there are multiple importers, state “VARIOUS”. 5. A complete description of each commodity, relating it to the invoice description and the Harmonized System description. If this is a single shipment, include the commercial invoice number, and use another unique number as a reference number e.g., shipping order number. 6. For each commodity, identify the HS tariff classification to six digits or eight digits if the commodity is subject to a rule of origin included in Annex 401., using the HS tariff classification of the importing country. 7. State which criterion applies to each commodity one must apply in order for the shipment to receive preferential treatment.. Review the criteria A-F. included on the back of the form to determine which one applies. Appendix F. - Employee vs. Independent Contractor. In 2005, the Bureau of Labor Statistics reported approximately 10.3 million workers, or 7.4% of the U.S workforce, were classified as independent contractors.Today, that number is likely dramatically larger. According to government studies, many workers classified as independent contractors are actually employees. Consequently, worker classification has become a hot topic for the IRS, state departments of revenue, and other federal, state and local government agencies. In addition, the plaintiff’s bar has taken note of this issue and the opportunities for individual and class action lawsuits against businesses. This Article highlights some of the worker classification rules, the risks of misclassification, and general guidelines for businesses and advisers. New Scrutiny on Worker Classification. Although worker classification has been an area of focus for many years, current economic and political pressures have pushed it to the forefront of governmental attention. Congress’ Joint Committee on Taxation has concluded there is a significant loss of tax revenue associated with worker misclassification. Consequently, the IRS is dramatically increasing audit activity, targeting worker misclassification as a means of reducing budget deficits. State and local governments have followed suit and are aggressively scrutinizing businesses and industries which commonly utilize independent contractors. The states and local governments have the same motivation to prevent worker misclassification as the federal government—to generate revenue, increase compliance, and ensure workers are properly treated under their employment laws. States and local governments are particularly concerned about payment of income taxes and ensuring their unemployment insurance and workers’ compensation systems remain healthy Federal and state legislatures, and local administrative agencies are reviewing a wide range of proposals and recommendations related to reducing worker misclassification. Misclassification. Many businesses have legitimate business reasons for classifying workers as independent contractors, such as when the workers perform temporary, specialized services for the business and perform the same services for others through independently established businesses. In some industries, the use of independent contractors is a common practice e. g., construction and transportation. Workers in these industries often prefer to be independent contractors because they like the freedom to be their own boss, and to own and operate their own businesses. It is not uncommon for businesses to pay independent contractors more than the wages they pay employees because the contractors are responsible for their own costs of doing business, including payroll taxes, benefits, tools, equipment and liability insurance. So, classification of workers as independent contractors does not automatically result in cost savings. Nevertheless, some government regulators perceive businesses are solely motivated to classify workers as independent contractors to avoid payroll and other “employee-related expenses, circumvent minimum wage, overtime, antidiscrimination and other employment laws or avoid union organization. As a result of this widespread perception, along with the significant need for governments to cure budget deficits, the focus on worker classification has recently intensified throughout the United States. Businesses and their legal advisors need to pay careful attention to this important issue. Risks of Misclassification. The risks of misclassifying workers, whether or not intentional, are significant. If the IRS determines an independent contractor is really an employee, it may assess amounts which should have been withheld from payroll for federal payroll taxes i.e., Social Security and Medicare. and income taxes, as well as penalties and interest.Other federal agencies, such as the Department of Labor or the National Labor Relations Board, may also assess penalties, fines and interest, in addition to disqualifying retirement plans. State and local agencies are also quick to assess taxes which are based in whole or part on employee payroll, including unemployment taxes, withholding taxes, workers’ compensation insurance taxes and public transit taxes, as well as assessing penalties, fines and interest. Federal, state and local taxes are not the only areas of concern. The workers themselves may initiate private lawsuits seeking damages for breach of contract and compensation for failure to pay for tools and equipment, workers’ compensation insurance, pension contributions and benefits, sick pay, vacation pay, business expenses, and other employee benefits. When many workers are involved, class action lawsuits may evolve. The costs of defending worker lawsuits or battling government audits can be staggering. Likewise, the publicity from worker lawsuits can hurt business goodwill. Moreover, the distraction to management resulting from worker lawsuits or government audits usually has a negative impact on business operations. General Classification Rules. Worker classification is not an exact science. While some types of workers should clearly be classified as employees, there is a significant gray area with respect to other types of workers. Moreover, although workers are often classified in groups based upon occupation, classification should technically be done on an individual-by-individual basis. Additionally, state and local rules may differ from federal rules, such that a worker may potentially be classified as an employee under state law and an independent contractor under federal law. Making matters more complex, state and local rules may differ within a single jurisdiction, depending upon the application within the jurisdiction For example, it is not uncommon for some of the classification rules applicable to workers within a state to differ for purposes of unemployment taxes, workers’ compensation insurance taxes and withholding taxes. These differences are often less than obvious and make compliance difficult for most businesses. Federal Law. Under federal law, certain workers are classified by statute as employees i.e., corporate officers and commission drivers, home workers and salespersons., but most others are classified under common law rules. Under the federal common law rules, an employment relationship exists when the person for whom the services are performed has the right to control and direct the individual performing the services, not only as to the result to be accomplished, but also as to the details and means by which that result is accomplished. It is not necessary that the employer actually direct or control the manner of performance; it is sufficient if the employer has the right to do so. If an employment relationship exists, any other designation of the relationship by the parties including designation of independent contractor status. is immaterial. The IRS and other agencies look to a variety of factors in determining whether a right to control a worker’s performance exists. Twenty common law factors are discussed in Revenue Ruling 87-41, which for years was the standard by which worker classification determinations were made. Nearly all tax practitioners and employers have some familiarity with the “20-factor test”. In the two decades since issuing Revenue Ruling 87-41, the IRS has modified and updated its approach to worker classification. In an attempt to ensure the focus is on the “right to control,” the IRS now encourages its auditors to look beyond the twenty factors contained in Revenue Ruling 87-41 and to focus on three categories of factors: 1. Behavioral Control Factors; 2. Economic Control Factors; and 3. Factors Evidencing How the Parties Perceive their Relationship.This evolutionary approach essentially groups many of the factors from Revenue Ruling 87-41 into these three general categories and gives some factors more weight than others. Regardless, application of the test remains quite subjective. State Law. Federal law does not control worker classification for state and local law purposes. States use a variety of different tests to classify workers. The majority of states use some variation of a three-prong common law test often called the “ABC Test which analyzes whether: The worker is free from direction and control over the performance of services; The services are either outside the employer’s usual course of business or performed outside of the employer’s business premises; and The worker is engaged in an independently established trade occupation profession or business. If the ABC Test is met, the worker is an independent contractor. If one of the three prongs is not met, the worker is an employee. Although the ABC Test is based in common law many states have codified variations of it. One common variation uses only the first and last prongs, and is often called the “AC Test”. Some states allow workers to be classified under alternative tests. For example, Washington’s unemployment tax statutes utilize two similar, but alternative, tests to determine whether a worker is an employee. The variety of state law tests and differences from federal law creates significant confusion and hazards. A worker may be classified differently for federal and state purposes, differently from state to state, and even differently within in the same state! For example, Oregon has codified a variation of the AC Test for purposes of its workers’ compensation, unemployment, and withholding tax laws. Oregon’s test differs from the federal test, so workers in certain industries are frequently found to be independent contractors by the IRS, but employees for Oregon tax purposes. This statutory test does not apply to other employment-related determinations in Oregon, such as when an independent contractor sues for employment related benefits or for determining an employer’s liability for acts of its employees. A different common law test is used in such cases. These differences can be hazardous to unsuspecting businesses! Businesses and their advisors must be prepared for increased federal, state and local government scrutiny of worker classification. Businesses and their advisors should regularly discuss the risks of misclassification and review worker classification decisions as this area of law is in a state of flux. Business owners should not assume a worker who is an independent contractor for one purpose is automatically an independent contractor for all purposes. They are well- advised to enlist their attorneys to periodically review their worker classification decisions and determine if possible problem areas exist. Assistance of qualified legal counsel should also be obtained when appropriate, including when: Drafting and reviewing independent contractor agreements; Analyzing differences between relevant state, local and federal laws, and the application of those laws to a group of workers; and Undergoing state local or federal worker classification audits or exams. Proper worker classification has always been a concern for federal state and local agencies. Due to recent economic and political pressures, however, worker classification is currently and will likely continue to be at the forefront of government regulation. The risks associated with worker lawsuits or government audits are significant. Businesses need to be well advised in this area. Consequently, periodic reviews and adjustments, if necessary to prior worker classification decisions are warranted. Appendix G. - Regulations added in 2016. 1. Тhe Unified Registration System Will be Implemented. Phase one of the roll-out of the URS already began late last year, and phase two is scheduled for September 30th. It will affect all motor carriers, freight brokers and other entities currently registered with the Federal Motor Carrier Safety Administration. The URS will do away with all registration numbers currently in use, such as the MC, MX and the FF, and replace them with the USDOT numbering system in one comprehensive database. This is predicted to save time and money for the industry, thanks to reduced paperwork and processing times. It will also make it easier for FMCSA to track down high-risk small and mid-sized carriers trying to evade enforce-ment action. 2. New Safety Fitness Rule Proposed by the FMCSA. In January, FMCSA proposed a new rulemaking that aims to make it easier to evaluate safety fitness of motor carriers and identify non-compliance. The proposed Safety Fitness Determination rule will introduce a new safety ranking “by integrating on-road safety data from inspections, along with the results of carrier investigations and crash reports, to determine a motor carrier’s overall safety fitness on a monthly basis.” The currently used model has three levels: satisfactory, conditional, unsatisfactory. The new rule will replace it in favor of an “unfit” score, meaning that a motor carrier would have to take immediate action and improve its rating or dis-continue operation. 3. Driver Coercion Mandate Has Just Begun. FMCSA has been working on a coercion mandate, which is finally taking effect this year. It aims to pre-vent fleet owners from harassing their drivers, but the rule also applies to freight brokers and shippers. FMCSA defines driver coercion as an action occurring when motor carriers, shippers or freight brokers “take employment action against, or punish a driver for refusing to operate in violation of certain pro-visions” of regulatory authorities. Drivers are now able to file complaints with FMCSA within a 90-day period of when the coercion occurred. 4. More Training Required for New Drivers. For much of the past two years, there has been talk of updating training requirements for entry-level drivers. At the end of last year, the proposal moved into the Office of Management and Budget for ap-proval, which is the last step before it gets published in the Federal Register. The new requirements are not yet publicly available but are expected to be published this year. The pub-lication will be followed by the customary period for public comment. Some of the details known so far are that Class A drivers will be required a minimum of 30 hours behind the wheel, while Class B drivers will need 15. Many trucking groups, however, disagree with the minimum hours rule on the basis that there is no sta-tistical evidence to back it up. In addition to that, the Entry Level Driver Training Advisory Committee has compiled a 10-page curriculum of performance-based requirements every new driver must fulfill. 5. Speed Limiters Installed on Heavy Trucks. This is an issue FMCSA has been trying to tackle for several years, and progress has been slow. In the middle of last year, the administration postponed setting a deadline for implementation once again, but 2016 may be the year it finally happens. The rule is simple: FMCSA wants carriers to install speed limiters on heavy trucks defined as vehicles with a GVWR of 26,000 pounds or more. in an effort to reduce the number of fatal crashes. According to the administration, the measure will not prove be costly, as most of these trucks already have speed limiters installed but have not set limiting parameters. 6. A CDL Testing Database to be Established. In the first half of 2016, we are expecting to see the publication of the final rule of the drug and alcohol testing clearinghouse, a requirement of the Moving Ahead for Progress in the 21st Century highway funding act. When implemented, the rule will establish a database of drivers who have refused to submit to or have failed a drug and alcohol test. Carriers will be required to query the database before hiring a new driver. They would also have to report all incidents in which one of their drivers was cited for driving under the influence. Appendix H - New Regulations for 2018. 1. Nationwide Speed Limit. 65mph may be the new limit on Freight Trucks since the FMCSA is working on speed limiters on vehicles over 26,000 lbs, but they have not said yet what that limit would be. 2. Suspension of HOS. A study was done by Virginia Tech University along with the FMCSA that will decide whether or not the suspension will be permanent or not. 3. Overtime Rules Lawsuit. An updated to overtime rules was stopped from taking effect this year because of a lawsuit from 21 states. The new law was going to increase overtime pay exemption up from $23,660 to $47,476.  They would also be able to include 10% of commission or bonus pay to someone total compensation if it is paid quarterly. This would primarily affect dispatchers, salespeople and other salaried personnel since drivers are usually paid by the mile. 4. Updating of FMCSA’s Registration System. Instead of having an MC, FF and MX number for operating an authority there will now be a Unified Registration System URS. which was supposed to be in use by January 14 but the FMCSA just announced that it will be delayed again. 5. ELD Mandate. As of December 16th all truck drivers who are required to track Hours of Service will required to use an Electronic Logging Device ELD. to do so. One of the few exemptions is any drivers of vehicles manufactured before 2000. Appendix I. New Regulations for 2020. 1. ELD Mandate. The ELD mandate went into full effect on December 17, 2017. However, some commercial vehicles that were still using the Automatic On-Board Recording Devices AOBRDs were excluded from this new ELD rule. However, those fleets still using AOBRDs were expected to switch to the new ELDs by December 17, 2020. 2. Hours of Service Reform. All of the controversies around the ELD mandate shed some light on something the trucking industry has known for a long time: the current hours of service regulations are outdated – and don’t give drivers the flexibility they need to do their jobs well. New guidance expected early this year around four specific hours of service areas: Expanding the on-duty time for drivers who use the 100 air-mile exemption. Extending the on-duty limitation for the adverse conditions exemption. Revising the current 30-minute break requirement. Providing more flexibility around sleeper berth time . More than 5,100 comments were received this fall when the agency asked for public feedback on the suggested changes– confirmation of the industry’s passion for hours of service reform. To give them more time to focus on this issue and review all of the comments more quickly, the agency recently canceled the split-sleeper berth study that was supposed to kick off this year. The goal of the study was to evaluate whether giving drivers more flexibility in managing their sleeper berth time impacted their overall safety on the road. The agency felt that continuing this study was moot, as sleeper berth time is one of the hours of service areas being considered for reform. 3. DOT Drug and Alcohol Clearinghouse. The clearinghouse rule was approved but is in a holding pattern, since the Department of Health and Human Services must develop guidelines for hair testing before DOT can change the rule. Federal Bill HR 6 was signed into law October 24, 2018, which reaffirms that the FMCSA Commercial Driver’s License Drug and Alcohol Clearinghouse will go into effect January 6, 2020 and that within 60 days, the FMCSA administrator must submit a status report to Congress the Clearinghouse status. The Act mandates HHS to update Congress on implementing the process of publishing hair testing guidelines for DOT-mandated testing within 60 days of enactment of the Act, and every 180 days until guidelines are published. Until guidelines published, hair testing is not allowed for DOT-tests. 4. Minimum Wage. With the new minimum wage raising, the Truckload Carriers Association TCA is telling truckers to be mindful of the new requirements that have taken place in many states in 2020. The legal counsel from TCA states, Employers with operations in different states must take care to monitor these various state law requirements, and when they change. This is significant for the trucking industry because carriers are often targeted with wage and hour lawsuits brought by drivers and other employees. 5. DOT Hair Testing. A recent legislative package that was signed into law is holding the Department of Health and Human Services responsible for finishing the hair testing guidelines that were due by December 2016. These guidelines are the first step in making hair follicle drug testing a DOT-approved drug testing method. Although many trucking companies already use hair testing as part of their pre-hire process, urine must still be collected for all DOT-regulated tests. 6. Sleep Apnea Update. With 28% of commercial truck drivers likely suffering from mild to severe sleep apnea, these drivers are five times more likely to be involved in a crash, and the total cost of collisions related to apnea is estimated at $15.9 billion a year, according to research from the National Safety Council. In March 2016, FMCSA and FRA published their proposed rule for Sleep Apnea. NTSB recommended a higher degree of sleep apnea testing. However, there was lots of industry push-back. 7. Speed Limiter Rule. National Highway Traffic Safety Administration NHTSA and FMCSA in August 2016 issued a rule regarding speed limiters for commercial trucks. The rule was to require that all commercial trucks have a speed limiter device. Even though the rule has been outlined, but the top speed has not been decided on. The following speeds have, however, been discussed – 60, 65, and 68. 8. CME Registry Hack. Back in December 2017, the CME Registry was hacked. Since then, they have been trying to fix the website. The ability to search for examiners was restored first. Then the ability to add new examiners was created in a new process. The examiner portal is partially restored and examiners and MEAA can upload determinations, though glitches still exist in the system. Expect more updates as they push to fully restore the CME Registration website. 9. Minimum Wage. With the new minimum wage raising, the Truckload Carriers Association TCA is telling truckers to be mindful of the new requirements that have taken place in many states in 2020. The legal counsel from TCA states, Employers with operations in different states must take care to monitor these various state law requirements, and when they change. Appendix J. New Regulations for 2020. 1. Drug and Alcohol Clearinghouse. All parties involved in the drug and alcohol testing process for CDL holders will be required to register, including motor carriers employers, consortiums, TPAs, service agents, medical review officers, substance abuse professionals, and drivers – at least most of them over time. Not every driver will have to register those who are long-time employees and who have never failed a drug and alcohol test probably won’t be required to register. Beginning Jan. 6, carriers will be required to query the system when hiring and annually for all current CDL holders in their employ. Carriers will conduct a limited query first, which only tells them if there is a record in the database on that driver. If the query comes back ‘yes, there’s info, ’then a full query is required. Driver consent is required to query the database. That can be a consent form included in the application packet for limited queries, but for full queries, drivers must give their consent through the clearinghouse. Queries are $1.25 each – there are bundles offered, but there is no price break. Carriers have to have money in their account before they can query. There is a no-limit annual fee of $24,500, but only a few carriers in the country would need the unlimited plan. Carriers have three business days to report violations, including refusals to be tested. A record of each query and information obtained from the clearinghouse must be kept for three years. For the first three years, employers must both query the clearinghouse and conduct manual queries an applicant’s former employee, since it will take some time for the database to be populated with data. After Jan. 6, 2023, employers must only use the clearinghouse. 2. Entry-Level Driver Training. Entry-level driver training rule is slated to take effect in February 2020 and requires new training rules applicable to those applying for a CDL, CDL upgrades from Class B to Class A, or instance or for S/P/H endorsements. Those seeking a CDL are required to obtain training from a certified provider in order to take a CDL skills test. This rule also requires CDL training providers to register with the FMCSA’s training provider registry TPR. Training providers registered must deliver FMCSA’s required curriculum. It is believed that this rule was created to raise the entry bar for new drivers, which could affect the supply of drivers. The training is likely to be more expensive as well. 3. Hours of Service Rule Changes. Among the changes are adjustments to the 30-minute rest break rule, changes to the sleeper berth rule, a change to the 14-hour running clock rule that would allow it to pause, or stop, between 30 minutes and 3 hours for break time, a change in the short haul-driver exception to 150 air miles and 14 consecutive hours versus the current 100 air miles and 12 consecutive house. There is a belief that this change could allow more drivers to be exempt from the EDL rule. Also, among the changes is proposal to extend the 14-hour on-duty window by two hours due to adverse driving conditions. Many of these changes could end up being part of the HOS rule, but a few may not make the cut. 4. CSA Changes. The CSA has been around for some time and has been plagued by problems from the beginning. An independent study in 2017 recommended wholesale changes with a new scoring model needed. A revised model may have fewer BASICS and predicted that the industry probably would see a new CSA that focuses on violations that matter in terms of safety as opposed to those that don’t, such as paperwork violations. While such violations could still result in a citation, they would be included in the CSA score. 5. Under 21 Driver Initiatives. There is a pilot program that allows 18- to 20-year-old drivers with military driving experience to obtain CDLs. A better solution would be a graduated CDL that has limitations and restrictions, as those imposed in some states on auto drivers between 16 and 18 years old, with the limits gradually increased as the drivers gain experience.