employee vrs. independent contractor

If you DO NOT own the vehicle and have NO Financial stake in it's ability to make a profit, you are an EMPLOYEE.
Even IF you own the vehicle and held a financial stake in assuring it was profitable, if you did not have the ability to make the decisions of "where, when or how" to work you still might be classified as an employee.

 

Are you saying the majority of expediters are wrong ? If they were IRS would have nailed them long ago . You do not have to own a truck to control its profitability .

 

Not exactly true. If you are directed by the company WHERE (to pick-up) WHEN (to pick it up) and HOW, you still may be considered an employee. Simply having the ability to turn down a load doesn't negate this. In order to be a TRUE contractor, you would have to be offered your choice of loads to different destinations.
We went thru this when we owned a truck. The ONLY company we leased to that was classified as an EMPLOYER was MS Carriers (before Swift ate them up)

 

Yes, they are wrong. IRS "nailing" them is meaningless until they are audited.
You MUST have a stake in the profitability of a business to be a Contractor. DRIVERS do not. To simply force the drivers to pay for their own fuel and allow them to keep "the change" and call them "contractors" is not only a scam (that seldom profits the driver and only profits the OWNER), but it is illegal.

 

The way I understand it this is how FedEx Ground got around it . They only allow multiple route contracts . The owners of those contracts are restricted to one particular route they have their choice of routes . I'm sure their attorneys worked hard finding a way around the employee requirement .
Drivers for FedEx Custom Critical fleet owners do have the right to pick and choose their loads . They average about a 75% acceptance rate .

 

They would be employees and not contractors under those terms.
We went thru this.

We had friends who had several trucks leased with a Michigan Regional Carrier (Michigan, Indiana, Illinois and Wisconsin) HE and all his drivers were EMPLOYEES of the Lessor, and were paid BY the Lessor.
Hired HIS TRUCKING CPA for advice before we even bought our truck.
WE had to sign a waiver in Michigan certifying we were CONTRACTORS and NOT "employees" to exempt our Lessor from liability to Federal and State Withholding, State Workers Compensation Insurance and Michigan Unemployment Compensation Insurance.
This actually has been discussed ad nauseam in this forum several times.

If you do not hold an interest in the profitability in the business; if you do not own the tools or equipment, if you are instructed where, when or how to perform your job (even IF you own the tools/equipment), the IRS considers you an employee.

It isn't good enough to "lease" the truck and make the lessee responsible for the fuel or upkeep either. If he has enough, he just walks away....and LOSES no interest in the profitability of the business.

 

Talk to a CPA. There are very specific guidances from the IRS as to whether there is an employer vs employee/contractor relationship. It is very complicated. If you try to use common sense, you will probably only mess yourself up. If you would like to get a feel as to the complicated nature of this discussion, follow this link (http://www.irs.gov/pub/irs-utl/emporind.pdf). It is important to understand that this isn't tax authority. It is guidance provided to IRS agents to help them determine the relationship status as employee or independent contractor. It is NOT authority on tax matters. Again...consult a CPA.