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.
An article in USA Today
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)
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.
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?