Warning all leased O/O

Because the government says so. Lol. That’s really all this amounts to is control and tax revenue. The example that @TheLoadOut used above would basically be like a shipper calling a broker to find a motor carrier to move a load. That would be legal under the new scenario because the middle man isn’t in the business of hauling freight (or painting houses like in the example), they exist only to make the transaction easier. The issue for trucking is the wording of question B and that’s what kills the owner operator leased to a carrier business model. It’s one simple part.

 

Part of it is a tax revenue grab I would imagine. The govt/IRS wants everybody that's not an actual business entity on a W2 so the taxes are automatically withheld from settlement instead of a bunch of 1099'ers they have to keep an eye on and often have to go audit and chase for money. TBH a lot of 1099'ers abuse the system even when they are properly classified as independent contractors.

 

What if a carrier also has brokeragage and contract it out.

 

Someone gave a example of a traveling nurse. Does she have a doctors office, lab, or own hospital? She a independent nurse and has all say and rights? That nurse is taking orders from someone. She is a employee period. But while she may be intelligent in her field, someone has convinced her "subcontractor" is better without full understanding. They are taking advantage of alot of people, who don't know better. Responsibly falls on both parties.

Subcontracting is fitting in some situations, but not many. Big business is simply removing expenses.

 

read post 130 what you suggest is how we are doing it in commifornia

 

your right big business taking advantage and the 1099 guy avoiding as much tax’s as he can the government wants its share it does not have enough yet and never will

 

And they buy both side of the aisle! Not just one.

 

It's pretty hard to guess what the actual outcome of all this would be. Theoretically companies like Landstar, Mercer, or all of the towaway/driveaway outfits could pay out settlements on a W2 without drastically changing their business model. You can be certain they themselves wouldn't like this, since they would have to pay for workman's comp and their half of the payroll tax and it would complicate their bookkeeping to the point where many of them would likely have to outsource the accounting to payroll companies like ADP or Paychex. But I don't know what that would mean for a guy running his own truck. Typically 1099 guys fill out a Schedule C "Statement of Profit and Loss" on their tax return, but W2 employees don't do that so there would be no way to write off operating expenses.