AB5. Will it be enforced? What do you think?

As I stated, this was my opinion on the subject. You’re free to disagree as my opinion is one in a million others out there. I stand by my opinion that if anyone holds themselves out to be an O/O that he or she should have to abide by the same regulations as everyone else whom are O/O’ers.

I’ll clarify myself again. If someone is working as 1099 (Classified as an Independent Contractor filing a 1040 Sch C) that individual is for all practical matters operating as a legal business owner. These individuals should be required to obtain and have all necessary proper licenses including that which is required by the FMCSA.

I for one, am a employee of my own company. My company is licensed by the state from which it operates. My company is authorized by the FMCSA to operate as a motor carrier. The carrier’s that I have a contract with are not my employers but have hired my company to perform a specific tasks. My company (Not the carrier’s my company has a contract with) has hired me to fulfill those tasks.

Many independent contractors classified by these mega carrier’s aren’t even setup legally to operate not only as a business but as a motor carrier. They are brought in and immediately hired as 1099 classified as independent contractors but most have no legal business entity at all. Some stop short at the formation of a corporation. How can you have a corporation that operates as a trucking company with or without drivers that is not authorized by the FMCSA? You cannot, legally that is. But it’s being done. How many lease operators are driving down the road that have legitimate businesses? Stop one and ask what’s the name of their company is or simply google the name on the sides of the truck if it’s listed. Then look up that company’s state business privilege license information. Follow that up with a company snapshot off the FMCSA website.

This isn’t about me throwing a wrench into a system that has been operating for years. This is about legality. Plain and simple.

 

My CA operation is in that model. But not all operators want to be an employee and have all the deductions on employee's benefits. They want full access to what they earn for each job.

If everyone in the market is doing the same, I am cool, but there are carriers are taking whatever, even individuals.

Are you simply classify your operators as employees, but use them as O/OP or they are truly an employee with benefits like a company driver or office people?

 

If I am back to where I first started in trucking, I would have agreed.

 

AB-5 for the trucking side will not happen in CA.

 

Full bennies just like the office people and other non-contractors.

Most didn't like it but I told them once there is a complete picture of this crap, they can return back to a contractor position, but until then, they are employees with the same freedom.

 

Again, what regulations are being skirted? Running a business as a sole proprietorship is perfectly legal. I’m not required to have a business name or a corporation even if I were to reactivate our old authority. My dad and grandpa ran that company as a simple partnership, no fancy corporation name or none of that, and had authority back when it was next to impossible to get. So I will sit back and wait for you to tell me exactly what I’m skirting. My truck is licensed and insured, I follow the same FMCSA regulations you do, I’m drug tested, I pay taxes. Seems the only thing you’re hung up on is authority and I suspect your high insurance cost is why you feel that way. You’re living in a fantasy world if you think it will come down to everyone having to get authority. All that will happen will be a two check system like back when you could lease on to a union company. One check for the equipment, driver gets paid on another check as a company employee.

My equipment has no financial ties to the owner of the authority I use. You keep throwing mega L/P drivers all in the same category as those of us that own the equipment. I’m not an employee of the company on the side of my truck. I work when I want, I cut a check to him once a month for tractor and trailer insurance plus 2%. The only people I have to keep happy are myself and the guy that I get my loads from.

 

Please go back and read what the original poster who started this thread asked. He or she asked for opinions. My opinion is my opinion. Your free to agree or disagree with my opinion. I stand by my opinion and have given detailed explanation of the reasoning behind my opinion. Some will agree and some will disagree.

My opinion has nothing to do with cost of insurance, cost of owning a truck, or anything from fantasy island. My opinion is based solely upon what the law states.

Perhaps I did not make myself clear that my opinion is based upon the definition of what an independent contractor is according to what the IRS defines as an independent contractor, the term commonly used by carrier’s who are not employees.

The term independent contractor and the misclassification of the term as it applies is what is in question here. This is the entire basis for AB5.

Thus, again, I state my opinion that any entity (or person) that is hired as an independent contractor should be required to follow the same regulations that all carriers must follow and abide by.

 

One last point and I’m done with this.

I believe, me, myself, and only I believe, that anyone that is leased onto a carrier and is classified as an independent contractor should be required to have FMCSA operating authority.

This is my opinion. It is not law. It’s only my opinion. You may disagree and that is OK.

My reasoning for this opinion is because an independent contractor is operating as its own separate entity from the carrier he or she leases unto. The independent contractor is basically stating that he or she is not an employee of a hiring carrier but is available for hire to any carrier that desires to hire them to pull their loads.

No broker/Agent would hire an independent contractor with a truck/trailer that doesn’t have operating authority. If I’m wrong, someone please correct me. This type of relationship only happens between carriers and drivers. Again, if I’m wrong, someone please correct me.

My belief why such relationships doesn’t happen is because it’s illegal. The FMCSA would not stand for it. But any person can go and lease a truck/trailer and put it on with a carrier and be classified as an independent contractor. Yet such person is classified as a non-employee. If they aren’t employee’s, then what are they? If they’re separate entities from the carrier’s that hire them, then why aren’t they required to have operating authority?

 

The way I look at it, I used to be a mechanic for 15yrs. An owner operator leased to a company isn't any different than a mechanic, they own their tools they take from job to job and they're employees not 1099 contractors. Owner operators truck (and trailer) is their tool(as much I hate calling it that), they are employees.

 

So you’re not going to say what regulations I’m not following by paying to use someone’s authority vs having my own? Please point out exactly what FMCSA regulation disallows leasing on to a motor carrier.

It seems like you want everyone to do it the way you did it even if it doesn’t make sense financially. You started out in this thread saying if everyone that owned a truck had to get authority then everyone could get a fair rate. Rates wouldn’t change because people would go to a two check system before getting authority. Then you start saying we’re skirting regulations yet can’t say exactly what regulations are being skirted. Then one post you’re talking about forming a corporation and getting a business license, neither of which are required by FMCSA to get operating authority. Then it’s back to your opinion that guys like me are skirting regulations. I’m not going to pay my $300 and then have to pay out the nose for insurance when my insurance is only about $6k a year now. That wouldn’t make much sense to me financially. So maybe don’t make accusations based on your opinion without an actual regulation to back it up.