At stake here is your ability as an owner-operator to run a business as you choose, and to pick your carrier business partners on the basis of offers and arrangements that work for you and the carrier.
The IRS and other federal and state agencies with a little skin in this game have traditionally imposed various means tests to determine the validity of independent status claims. Some of the caveats in those tests don't quite work for trucking -- mostly because of the degree of control and oversight required of motor carriers over drivers of all descriptions by the federal safety regulations. Historically, this industry has fallen back on the so-called Safe Harbor provision (Section 530 of the of the Revenue Act of 1978), which defaults to established custom and practice in proving a claim. In other words, if it has always been thus, so it should remain.
Plans to change that provision would require individual claimants to prove they are independent, rather than referring back to the way things have always been. That could get hugely expensive, and if you fail to prove your claim, well ... your formerly deductible business expenses would disappear, and your big truck could become nothing more than a very expensive lunch box.
You can draw your own picture from there, but any way you look at it, trucking would change dramatically -- and not for the better in my opinion. I believe that most of the men and women who call themselves owner-operators are quite happy with that designation. They see themselves as independent small businesses and aren't overly hard-done-by by their carrier partners.
Read The Fine Print
However, some of the people calling themselves owner-operators are so in name only. Truly, they are company drivers working for a finance company. What I mean is they still think like company drivers -- some even expect paid vacations and many of the benefits traditionally the domain of company drivers.
What that crowd needs is a darned good talking to. They can't have it both ways. What the rest of the industry does not need is the heavy hand of government sweeping across the land stripping business operators of their livelihoods in order to protect a handful of ill-informed Billy Big-Riggers. Still, it looks like we may be drifting that way.
There are owner-operators out there who are unmercifully screwed by their carriers, but it's not so much because those carriers are intrinsically evil, but because the drivers just aren't smart enough to see the curves coming. Some lease-to-purchase plans fit that description. And while I hate to see anyone screwed out of their dreams, I have to ask why in the heck someone who wants to be their own small business would ever willingly sign up for what are, in some cases, very one-sided business relationships?
Those people do need saving, but more from themselves than the companies they work for. Last time I checked, nobody puts a gun to your head and makes you sign those contracts. Come on people, take a little responsibility for your fate and read the fine print. If you can't, have someone read it for you. If the carrier won't let you have the contract reviewed, run. Don't just sign it and hope for the best.
I think it's a darned shame that some people fail in their chosen endeavor, but nobody ever guaranteed me a pot of gold just for showing up.
Dark Days Ahead?
If the government agencies and interests pushing the independent contractor "misclassification" issue are successful in removing or altering certain portions of the Revenue Code, or if they are successful in redefining what it means to be an independent contractor, a lot more people will be hurt than saved by the measure. It'll be a dark day indeed for trucking, and for the hopes and dreams of the people who put their all into running successful small businesses.
Check out September's Heavy Duty Trucking to find out what's going on behind your backs with this heavy-handed agenda. (You can access the digital version here.) And remember what you read when you vote in November.