Independent Contractor vs. Employee

LisaLouHoo · Feb 1, 2011

Has anyone with "independent contractors" under their wing (O/Os with fleet drivers) had any issues with the federales stating they can no longer be such, but rather they have to be deemed "employees"?

usafk9 · Feb 1, 2011

Interesting question. I've always done our own taxes, but after we acquired our second truck and knew we'd be hiring someone, we sought advice from a family friend who's a CPA. He told me the new guy's an employee, period. I realize that things would be much easier (and certainly cheaper) if he were an IC, but I'd prefer to err on the side of caution. I also realize that we're a very small minority in this business doing it this way.

If it helps, we use Quickbooks Payroll.

LisaLouHoo · Feb 1, 2011

The CPAs that my boyfriend uses say they are independents...but there has been some rumblings through the industry that this practice will no longer be accepted, that the "contracted drivers" will HAVE to be labeled as "employees". Just wonder if this is a fact or a rumor...thank you for the tip though, for if they have to become "employees", we now know a bit more on how to handle some things!

ATeam · Feb 1, 2011

LisaLouHoo said:
The CPAs that my boyfriend uses say they are independents...but there has been some rumblings through the industry that this practice will no longer be accepted, that the "contracted drivers" will HAVE to be labeled as "employees". Just wonder if this is a fact or a rumor...

This article from Heavy Duty Trucking magazine (reprinted by truckinginfo.com) will give you some insight into the rumblings.

davekc · Feb 1, 2011

Most of it is how you are set up. If the ground folks at the Fed can and are considered independent contractors, I wouldn't worry too much comparing expediters. But if you do, you can lease your equipment to the driver and have them incorporate and not even worry about it. Then it is a company to company transaction.

nightcreacher · Feb 2, 2011

Contract labor is playing in the grey area.If your drivers are on the 60 40 pay scale,they are independent contractors,as long as you don't tell them what to do.THe real grey are is a co driver,Ive been audited a few times,and havent had a problem,knock on wood,yet.But you have to make sure he pays his taxes,or they will come back on you.If your worried about a co driver,the safe way is to lease him the truck,and not show you as driving for him.

zero3nine · Feb 2, 2011

My California drivers are required to have their own operating authority. In Georgia they only need an EIN number. 10-99's all around and they operate under the company's umbrella cargo policy while carrying their own vehicular liability.

fired at you from my Droideka

greg334 · Feb 2, 2011

As a general rule, if you 'hire' a driver and let them loose without direction or make decisions for them, they are sub-contractors within all 50 states. If you direct them how to do the job, what route to take, what loads to take and so on, they are employees.

FedEx's cases are based on how the company treats the people, telling them how to driver, what they can do and how they operate.

BillChaffey · Feb 2, 2011

When I was Framing. If you had your own tools and worked with out supervision you could be considered a Sub with proof of Insurance. Common sense says consult your Accountant.

usafk9 · Feb 2, 2011

I'm a tad disturbed by your, um, strategy, Steve.

Using your logbooks as proof for your per diem, how would you survive an audit when you say your truck is leased to your co-driver, and contend that you don't drive?

Please help me understand how that's not cheating.