All That's Trucking

2010 Big Year For Attacks on Independent Contractor Status

December 13, 2010

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If you use owner-operators, you might want to make a resolution for 2011 to take a close look at your practices to try to fend off possible attacks on their independent contractor status.
Companies using owner-operators could face lawsuits or challenges from the IRS or state agencies over the validity of their independent contractors status. (Photo by Jim Park)
Companies using owner-operators could face lawsuits or challenges from the IRS or state agencies over the validity of their independent contractors status. (Photo by Jim Park)


An article in USA Today this morning reports that crackdowns on "misclassification" of employees as independent contractors sharply increased in 2010. The number of worker class-action lawsuits claiming that employers misclassified them as independent contractors rose 50 percent, it reports, and the Department of Labor and state agencies are also increasing enforcement.

Labor estimates misclassification cut federal revenue by $3.4 billion in 2010, USA Today reports, and says "The practice is common in construction, trucking and home health care." It cites Last week's release of a study by the National Employment Law Project that says the typical port truck driver is misclassified as an independent owner-operator.

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The issue of owner-operators and misclassification is one we've covered a lot this year.

Last month, we ran a guest commentary on Truckinginfo.com by George Cunningham, who follows the West Coast Ports in his newsletter, "The Cunningham Report," taking a look at what the carriers are facing at the Port of Los Angeles, which is trying to ban the use of contractors. The American Trucking Associations has been fighting that provision of the port's Clean Truck Program in court, and we've covered the legal battle in news stories throughout the year.

But the issue goes beyond the ports, as we looked at in-depth in our September cover story, How Independent Are Your Owner-Operators?" This feature looked at the issue and also offered carriers some pointers on how to strengthen the independent contractor status of their workers.

We'll keep reporting on the issue. In the meantime, let us know what you think. Are owner-operators true independent businesspeople or little more than indentured servants?


Comments

  1. 1. jimgetten [ December 17, 2010 @ 03:50PM ]

    Those that understand independent contracting and the IRS's definition of it can use the tax code to their advantage IF they sign a good contract AND have enough income from ALL sources to benefit them when they do their taxes.

    Only if there is a solid tax advantage should someone seek an independent contractor relationship. Without the benefit of the increase in income tax deductions, the risk vs reward ratio is just not worth it.

    Find a good, solid company that appreciates your experience and dedication and help them prosper. Being an employee is great IF you choose the right employer and treat them as you want to be treated.

    MERRY CHRISTMAS & KEEP ON TRUCKIN"!!

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Author Bio

Deborah Lockridge

Editor in Chief

All That's Trucking blog is just that – the editor's take on anything and everything related to trucking, with the help of guest posts from other HDT editors. Author Deborah Lockridge's career as an award-winning trucking journalist started in 1990.

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