Employee or independent contractor? For many heavy-duty trucking companies that use leased owner-operator truck drivers, the final answer might require a coin toss.

On Jan. 10, the Labor Department updated a simple Fair Labor Standards Act definition for determining whether a worker is an independent contractor or an employee. The department now uses a complex balancing test based on six economic factors.

The factors are weighted equally. That means predicting how the scale will tip became more difficult.

Fleets must clearly define IC relationships to withstand the mounting legal risks of employee misclassification.

To help ensure the relationships function as planned, fleets can use digital tools to automate workflows and avoid overstepping control boundaries.

This article explains how custom mobile apps help fleets maintain a proper distance from their independent contractor drivers while connecting IC drivers with best-in-class tools to do their jobs.

The Shift in Owner-Operator Leasing

Doing business with IC drivers at arm’s length while ensuring they meet safety and compliance policies is a formidable challenge.

The new rule states any actions that companies take with IC drivers beyond FMCSA compliance — actions serving the company’s own methods or standards for safety, quality, or customer service — may indicate employee control.

According to the Owner-Operator Independent Drivers Association, approximately 45% of ICs have lease arrangements with motor carriers where they operate under their carriers’ DOT authority.

Forty-four percent of ICs drive under their own DOT authority. Most owner-operators enter the industry today with DOT authority, according to OOIDA, and the trend has accelerated since 2019.

Giving Truck Drivers Power to Choose

One way to make a clear separation between employee drivers and IC drivers is to create workflows and features tailored to each group's operating procedures.

USA Truck got a head start in 2018 by using a custom app platform to adapt to changing labor laws. The Van Buren, Arkansas-based fleet rolled out an internal load board to ensure its leased and independent owner-operators had total freedom to choose loads. Drivers access the cloud-based load board through a dashboard in the fleet’s driver app built on Eleos Technologies’ custom app platform.

The load board helps drivers maximize revenue by planning their way into and out of freight markets. IC drivers can view each load's origin, destination, rate per mile, empty miles, and other details before choosing loads from USAT’s asset and brokerage divisions.

USA Truck expanded its load board in July 2020 to launch a “Drive Your Plan” program for company drivers. Drivers access the application through the fleet’s custom app to see all available loads in a specific market and use that detail to pre-plan their week.

The tools also keep drivers on schedule by ensuring any load they choose will fit within their hours-of-service limits.

The main difference between the two versions of load boards is that employee drivers do not see rates. USA Truck also controls how far in advance drivers can schedule themselves, and to prevent deadheading, they don’t generally let employee drivers change geography without a load.

Since rolling out the Drive Your Plan program, USA Truck has significantly increased its conversion rate from company drivers to owner-operators. The custom app platform and load board technology provide a foundation for employee drivers to test and evaluate their readiness to become an IC with full access to the company’s freight network.

Independent Contractors and Drivers: Staying in Separate Lanes

With a custom app platform, fleets do not need to start from ground zero to create tools for both sets of drivers. Instead, they can select from pre-built components and system integrations to efficiently develop an app that meets their business and workforce needs.

A custom app platform allows fleets to create a distinct experience for IC versus company drivers and other defined groups, such as:

• Separate message channels for ICs to ensure communications are consistent with the nature of the relationships. For example, communications can be limited to selecting available loads with optional channels to share weather and traffic information or relevant company news.

• Custom workflows that give IC drivers access to helpful tools from the main dashboard of their app. Whereas a fleet might give employee drivers access to an entire library of safety and training content, it can use its custom app to provide IC with drivers access only to relevant documents and data they need to comply with federal and state regulations.

• Some app-based features can be made available to both driver types, such as image capture for submitting proof-of-delivery receipts to get paid and time-saving tools for locating trailers at customer facilities and fleet terminals.

In addition to gaining communication advantages, fleets can use custom apps to significantly reduce the time and effort it takes for IC drivers to manage trip expenses, plan their trips, and more — without “exerting control,” a key factor that often comes up in trucking employee misclassification cases.

For example, when drivers choose a load, they can use the fleet’s custom app to receive turn-by-turn navigation, plan fuel stops at locations where the fleet has fuel discounts, and view the real-time estimated arrival time at pickup and delivery locations. The motor carrier contracting with that owner-operator does not dictate routes, fuel stops, etc.

With these and other modern tools, fleets can help ICs function as part of the team while maintaining their independence.

Empowering Choice for Truck Drivers

The changing landscape of regulations for contractor status in trucking creates a need for effective technology solutions to manage control and autonomy properly. Custom app platforms can offer a powerful means to navigate the rule changes by empowering owner-operators and employees with all the necessary tools to do the job and ensure compliance within control boundaries.

Jim Field is president of Eleos Technologies, a company that helps trucking fleets create custom driver apps. Field previously served as vice president of mobilecomm technologies for Knight-Swift Transportation.

This contributed guest article was authored and edited according to Heavy Duty Trucking’s editorial standards and style to provide useful information to our readers. Opinions expressed may not reflect those of HDT.