SMART MOVES:Ask those who know-I want to employ O/O's and don't know doodly *h*e*l*p*

i work with cool we are a non profit saftey association and work only with O/Os on all these issues everyday. no obligations i would be happy to awnser any questions no matter where you decide to go or what you decide to do be carful of a few things up front the first is separation between you and your o/os see the employee misclassification prevention act and make sure you keep them separated and require the right coverages.

 

hisghside is mostly right but even though you are not officially liable when your o/o ins't under dispatch its your name on the side of that truck and you will be named on the suit and have to defend youself from public opinion and fron potentioal losses. you can require specific levels of coverage but you cant force them to get coverage from a specific source. you have to watch out for the direct control thing.

 

Medicine man having your ins settlement deducted particularly through the same ins company that the motor carrier has as his primary ins through will violate the new EMPA and also places them at risk for fines most MCs don't know about this yet but it could get them into alot of financial hurt. 16 MCs have shut down in the last 6 months for that kind of stuff 5 in Ca alone. i would change that asap the real deal is that the dept of labor will see that as mingling business relations so then they will label you as an employee. if that happens then the MC is responsible for the last 3 years back payroll taxes unimployment and worker comp on everyone on staff that is doing the same thing.

 

You have a link for the EMPA on this?

 

the ata discusses it in section VI of this http://www.truckline.com/AdvIssues/Litigation/Documents/ATA%20Wage%20and%20Hour%20White%20Paper.pdf

and the pending legislation is here
http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.5107:

i watch this stuff pretty close as if o/o go down my whole business goes down.
most don't know about this yet and are unaware but something of this sort has been being pushed since the mid 80's and they will most likely get this one through.

 

Those links are for the wage and hour side and employee.

I am looking for the information you posted to Medicine Man about the insurance.

 

You CAN legally require your lease operators to pay the liability and cargo in exchange for a higher percentage of the load revenue... that's a deal I'll take anyday as long as the percentages add up...

$6100.00 per truck is cheap... Back in '88 I paid $8800.00... rates have come down....

 

sorry some clerification roadmedic. Case law is showning strongly that co-mingling business by having any costs settlement deducted particulary ins is being used as evidence of an employee relationship by the Dept of Labor. under the fair labor standards act ( economic reality test or the CA expansion of it is being used more often now even outside of CA) they are then using that relationship to say that every person acting under the same capacity for that motor carrier is a violation thus taking away the rights of the o/o and the motor carrier and requireing the motor carrier to pay currently up to the last 3 years unimployment, payroll taxes, and worker comp plus fines. the new law will double the fines and could require ongoing sanctions and allows for the dol to come in anytime they want for no cause instead of now they have to have a valid complaint first. i will try to find some case law exampples and post them.

 

Just some help to OP this is what I require my O/O to pay:

Plates (they can get them from me for $50.00 per week until it is payed for)
Bobtail Insurance (they can get it from me for $8.00 per week)
Workmans Comp (they can get it from me for $50.00 per week)
Medical Card
CDL
Annual Tractor inspection

They use my IFTA, liabilty and cargo insurance, and my numbers and stickers.

Fuel tax I estimate weekly and deduct weekly and put away until it is due for the quarter.

I hope this helps and I can answer any other questions you may have.

 

Also, get a good lawyer or see if OOIDA can direct you to one who can draft a reasonable lease-on contract stipulating the breakdown of each party's responsibilities within the lease. Basically you want a black and white description of what you are covering and what is being charged to the driver through payroll deduction. Then when you get all of this done, you need to make it very, very clear how this all works. Basically, when you get the first paycheck to send him, I would sit down and go through the paycheck line by line to explain every deduction to the driver to make sure it worked out as *he* understood it. This is to head off any disputes down the road and iron out any misunderstandings quickly.

Also consider that you can't force dispatch and to my knowledge, you can't force route the driver. If your current business gives company drivers the route and the fuel stops to use, you can't force it on a contractor. If you "pay the tolls", you have to consider whether you pay the tolls on the suggested routing or pay the tolls regardless of what route the driver chooses. I know a lot of small companies don't do any forcing but it is one of those things that if you some day switch to a forced dispatch/route system, you don't get the same thing with your contractor driver.

Also consider the fuel surcharge - do you give the driver a fuel surcharge or do you just give him a bulk rate that includes a part of the fuel surcharge in the mileage rate? If you go pick up a job rag at a truckstop, you'll notice that some companies "pay 100%" of the fuel surcharge to the owner op while others have a competitive (usually the nationwide average) fuel surcharge paid to the driver. There are upsides and downsides to each method to consider. Even paying percentage rates to the driver - do you include the fuel surcharge percentage before you split or do you split the base rate and give the fuel surcharge to the driver.

Also, it is probably smart to consider a performance bond of sorts to ensure the driver can adequately cover incidentals such as the deductible on the insurance plan. These funds have to be held out separately and are fully returnable to the driver when he/she terminates. You don't want to be in a position with a driver under a load getting into an accident and not having the money to cover the deductible on the policy to get the truck back out the door. You might have to front that money to get the repairs done and then turn around and claim on the bond to ensure you get your money back.

I really wish you well and hope you post back on your progress from time to time. I'm interested to see how things work out for you and hope you might share some of your own insights going through this process.