Insurance on Driver? with 1099

Wow only if people would learn how to run a business this wouldn't be an issue.

I have 1099 drivers, I am legal and everyone - INCLUDING THE IRS - is happy. My drivers (as I call them because they get more than just pay) don't leave unless they get a better deal that I can't match or beat (I have fired two drivers in the past and that is for reasons of stupidity).

SO here is how it is in the real 1099 world, they are responsible for driving the truck, they have to tell me when they go in for PM and oil changes which I pay for, so I don't tell them how to route, I don't tell them what loads to pick and I don't screw them out of money. When they have a hand in much of the decision making, they are happy and making money. When they want to go home, they figure it out, NOT ME. When they want to do a Disney thing with their family, they get a load going toward there and I foot the plane fare for the family.

That said, there are performance markers that have to be met, there has to be X revenue each month and these drivers know what that is and how to exceed it every month.

NOW here is the other side of the coin.

IF they were employees, they can't make many decisions, including where they have to go, what time they have to deliver and what loads they take. I can run them as hard as I want because they are employees and that's legal - remember our limits are 11 hours per day drive time, 14 hours per day total on duty/drive time and if I wanted to be cheap, I could just pay them mileage - just mileage states on the loads with no DH.

SO here is the thing, I know two other fleet owners like me and a couple who have employees. The people like me make a little less money up front then those others who have retention issues while making a lot more money. We all assumed that they are not in it for the long haul, but rather as our world has evolved into a quick money making scheme world (thanks to the FMCSA, deregulation, etc. ...) they make their money and drive everything down. I hate hiring, I hate recruiting, I hate road tests but I also don't like to lose money and when you can't retain a driver, you lose money.

I concluded that I will do what makes the money long term, 1099 ICs work for me as they do for many many others despite the complaining that it is a scam.

As one of my drivers said to me when I asked him why he had 10 driving jobs in the last 18 months, he said that the fleet owners/managers were cheap and stupid so he didn't want to work for any cheap or stupid people so because no one forces anyone to take a job, he left those jobs until he found one he liked.

 

I'm not defending 1099'ers, but WC costs vary dramatically state to state.

California is the worst -- the quotes I got were roughly 10% of the salary ($6,000 for a trucker employee making $60,000). Typical W.C. costs are $2-$3 per $100 for other states and other professions...

Add in the employer portion of FICA (~$4,000), basic health care (~$5,000), employee match retirement (~$3,000) and other misc accounting and employee reimbursement costs ($2,000) & that $60,000/year wage will cost you $80,000...

No wonder none of the big boys have HQ in Cali... And no wonder so many shady companies pay their employees $65k on 1099 and pretend they're doing you a favor...

 

Do your "drivers" have any insurance to protect them and their family if they get hurt?

 

Yes of course, they have workmans comp which is a group policy that they pay for and I provide other extended insurance that is part of the truck, and includes passengers plus personal items. The workmans comp is paid for by them - $125 a month.

 

It's not that people don't know how to run a business, it's some people - not all - want to exploit others. It happens in trucking and 100 other industries. It's cheaper and easier to misclassify a worker as an independent contractor. Some are running things fairly, most are scamming people. Congrats to the one guy out of 100 who is a decent human being.