Workers comp

Comp is so expensive because so many drivers get hurt. Down here in FL its 18% of wages, because we are full of scammers as well. FL has a law that if you are a non-construction business and have less than 4 employees, you don't have to have it. That is how I got out of it. However, I did have an Occupational Accident policy on my drivers. I also fully explained the difference, and had them sign a statement they understood they were not covered by Workers Comp, just Occ/Acc.

Many o/o illegally pay drivers on a 1099, eliminating the need to match withholding, pay for WC, Unemployment, etc. They are just one phone call from the IRS from going out of business. As an employer in this industry, total cost for a driver, if you have a health insurance policy as well, is easily 50% more than the actual wages the employee "sees" on their check.

 

The IRS has a simple test, and while some leeway is given for trucking, especially leased o/o and company l/p, if they are company drivers and don't share in expense and have complete control over where and what they do, the IRS will come in and make them pay all back employment taxes, fines and interest which usually bankrupts an outfit.

 

I like asking those payed on a 1099 and those that pay by 1099 what would happen if they went going from FL to IL via NJ. Sort of eliminates the sub contractor bs.

 

Ah... but the difference is that the O/O have "skin in the game". They have put their own money into the game by buying a truck, maintaining it, and fueling it. They have implied risk. A company driver only has the risk of whether he has a job. And a company driver can't just drive all over the country side anytime and anywhere he wants with a company truck. There will always be some form of limitation. An O/O can take his equipment anywhere he wants. Of course, he is paying the bills, so it's his call.

It is those differences whether IRS wants to agree if a person is actually a contractor or employee. When the carrier I am with wanted to limit off duty driving because they put in elogs, I brought this up and said I would have a talk with my son, an IRS field agent, about whether the O/O are really employees. The carrier reversed its position and now allows all o/o to drive wherever they want off duty, as long as it meets the FMCSA regs for off duty driving.

Just putting someone in a seat, having them supply a pair of pliers, does not qualify for contractor status. It may be a while before they get caught doing the 1099 on drivers, but when they do, it will not be pretty. And no one has the funds on hand to pay for enough legal to get them out of that mess. Why bother? Just hire as employees and be done with it.

 

Very well explained Cowpie1>"skin in the game" is the best analogy. Company drivers seldon if ever have any "skin in the game".

 

I'm in Florida too. If you don't mind giving me some advice from the employers perspective down here I'd appreciate it. I was told that because I make them bring their own tools, maps, gps, and CB that I can 1099 them. I don't lie to my guys either. They average 50cpm.