1099 Companies

Considering a smaller, private, local company, but just found out today that their drivers are all 1099.

I understand the basics of what this means, but anyone care to elaborate on exactly how this would affect the job on a day-to-day basis & the more long-term effects of it?

Anyone have any experience working for such a company?

Is it a red flag? Should these companies be avoided? Could it have its positive aspects?

I find it suspicious that they didn't reveal this information until after I already put in an app and approached them in person with questions and probably wouldn't have even disclosed it until i accepted the job.

RUN!!! 1099 is O/O, L/O or contract person that is responsible for all taxes, worker's comp, etc.

Company drivers CANNOT be 1099 drivers regardless of what they say.

Laura

Considering a smaller, private, local company, but just found out today that their drivers are all 1099.

I understand the basics of what this means, but anyone care to elaborate on exactly how this would affect the job on a day-to-day basis & the more long-term effects of it?

Anyone have any experience working for such a company?

Is it a red flag? Should these companies be avoided? Could it have its positive aspects?

I find it suspicious that they didn't reveal this information until after I already put in an app and approached them in person with questions and probably wouldn't have even disclosed it until i accepted the job.

That's exactly 'why' they didn't reveal that ... until the end ... sadly. My guy was a 1099 employ driving for a contractor back in the 200'somethings... for a year. I'm not going into all the details, but the contractor he drove for, DID offer him insurance and benefits 'for purchase' of course, unlike many currently do.

Back in the day, it wasn't a 'deal braker,' but then again...Tom was incident, injury, and accident free (thank Gawd!) Pretty sure in 2009 we didn't know the risk to reward ratio; he made good money, and I did our taxes.

Would he / we do'over?!?!? Nope. Not. I see NO positive aspects, especially with the smaller 1099 gigs. (His 1099 was FX/LH..didn't wanna mention that but... it's changed from the past, with them. Huge company, asset backed.)

I'd 'ALMOST' recommend leasing from a mega before going 1099. Then again, I said 'ALMOST.' Neither is a path worth pursuing, IMHO. SO MANY companies offer ALL YOU ARE LOOKING FOR!

What's 'wrong' with the starter companies here, anyway???? Want a 'smaller one?' Look into Dutch Maid logistics here in Ohio.. Reefer company, training company. Small'ish company. Often, 2nd chance company. Two others? Mast & Witte Brothers. Small. Training. Companies.

Wish you well, man!

~ Anne ~

Technically it was and still is not legal to pay a company driver by 1099. He is not a business with assets at risk, nor have choice of loads. There is tons of information on google. Basically as a 1099 employee u will receive no company benefits including your employer will not pay any portion of your taxes, social security, Medicaid, workman compensation.

Hi Garrett,

There is a right way and a wrong way 1099 companies are run. If your going to work as an independent contractor you need to have some kind of risk. What i mean is you need to own or be leasing the truck, paying for fuel, paying for repairs...something. The reason is because of taxes. Your going to be making estimated quarterly tax payments and if you don't know what you're doing your going to end up with a 5 figure tax bill come end of the year. I don't want to get too much into it, but the reason you need some kind of risk is because of write offs, which saves you a ton on taxes.

If your just jumping into a truck that the company pays for, you don't pay for fuel, all you do is drive the truck then the company is basically paying you employee wages while not giving you employee benefits, it's just that simple.

Technically it was and still is not legal to pay a company driver by 1099. He is not a business with assets at risk, nor have choice of loads. There is tons of information on google. Basically as a 1099 employee u will receive no company benefits including your employer will not pay any portion of your taxes, social security, Medicaid, workman compensation.

Donna,

It was a year, went quick; wrong choice...paid well. He hated the teaming, ergo the jump.

Indeed. We were VERY green, and didn't know. Mr. Clemmons, the owner of the rig Tom drove, did in fact...set up some benefit package through Chubb that Tom had to pay partially for (of course.)

I'm in NO way endorsing what he/we did in '09 (perhaps?) was right.. it just wasn't made 'known' how wrong it was, back then.

Well said, ma'am.

~ Anne ~

Hi Garrett,

There is a right way and a wrong way 1099 companies are run. If your going to work as an independent contractor you need to have some kind of risk. What i mean is you need to own or be leasing the truck, paying for fuel, paying for repairs...something. The reason is because of taxes. Your going to be making estimated quarterly tax payments and if you don't know what you're doing your going to end up with a 5 figure tax bill come end of the year. I don't want to get too much into it, but the reason you need some kind of risk is because of write offs, which saves you a ton on taxes.

If your just jumping into a truck that the company pays for, you don't pay for fuel, all you do is drive the truck then the company is basically paying you employee wages while not giving you employee benefits, it's just that simple.

Somehow, the FX guy Tom drove for...covered his buttoire ~ LoL. We knew not. Do now, also! Very correct, Sid. Very. Thanks.

~ Anne ~

Yes, it's a HUGE red flag. It's illegal. The problem is that by the time the IRS sends a demand letter to the company they've already moved, changed their name and gotten a new DOT#. What it means for you is that the company treats you like an independent business person who is performing a service for them - like a locksmith or a painter. Workers Comp Insurance? Only if you buy it for yourself. Benefits? Only if you provide them. Tax withholding? Nope. Liability insurance to drive their truck? No, that's usually on your dime too.

1099 companies do have one unique feature - they will, "hire" drivers legitimate companies won't touch. Fail a drug screen? No problem. Speeding tickets? Yep. Accidents? Sure. A lot of their drivers shouldn't be driving a Big Wheel BUT if you have no other options, have learned your lesson and want a path to redemption as the months and years roll by until a 3rd chance company will touch you they will pay you to drive their trucks while you maintain your proficiency as a driver.

As a new driver with a clean record you shouldn't even be slowing down when you drive past them.

Thanks for the input and advice everyone. Really good stuff. I'm learning a lot.

Hi Garrett,

There is a right way and a wrong way 1099 companies are run. If your going to work as an independent contractor you need to have some kind of risk. What i mean is you need to own or be leasing the truck, paying for fuel, paying for repairs...something. The reason is because of taxes. Your going to be making estimated quarterly tax payments and if you don't know what you're doing your going to end up with a 5 figure tax bill come end of the year. I don't want to get too much into it, but the reason you need some kind of risk is because of write offs, which saves you a ton on taxes.

If your just jumping into a truck that the company pays for, you don't pay for fuel, all you do is drive the truck then the company is basically paying you employee wages while not giving you employee benefits, it's just that simple.

One of the dispatchers did say "You get to write everything off though." ...so would you say this company is doing things more the right way?

Regardless, I shall call them tomorrow and get all the details.

I'll most likely just go with Prime though. I was only considering this company since what I've been reading about trying to find a good, wholesome, driver-friendly small to medium sized carrier that's doing it all the right way to work for- if you can... but apparently this company is not doing it all the right way and is in fact doing something illegal.

I have noticed they've switch insurance companies a lot in a short amount of time, used to go by a different name until recently, and seem to have several different addresses. They're just all over the place.

One of the dispatchers did say "You get to write everything off though." ...so would you say this company is doing things more the right way?

Regardless, I shall call them tomorrow and get all the details.

I'll most likely just go with Prime though. I was only considering this company since what I've been reading about trying to find a good, wholesome, driver-friendly small to medium sized carrier that's doing it all the right way to work for- if you can... but apparently this company is not doing it all the right way and is in fact doing something illegal.

I have noticed they've switch insurance companies a lot in a short amount of time, used to go by a different name until recently, and seem to have several different addresses. They're just all over the place.

Write WHAT off?!?!? Hubby is home .. and reading this with me..and said he 'skimmed' with FX/LH back in the day, knowing now what he didn't then. Do you know how MUCH an accountant will/would cost, to write this 'xxxt' off????

I had 2 years of that in school; not quite a degree, as I switched to journalism...and still ended up a waitress, haha.

Good gosh;

Say THANKS MUCHO to the great peeps on here, and MOVE on.

Please.

~ Anne AND Tom! ~

ps: Here's the 'fun' part ... when you 'call' them tomorrow to get 'all' the details, GET THE # OF AN ATTY IN YOUR AREA... and tell them HE (OR SHE) wants the details. They'll tuck & run!!! LoL!!

Best wishes, Carry on with Prime. Please....or something!

There’s your red flags.

Thanks for the input and advice everyone. Really good stuff. I'm learning a lot.

Hi Garrett,

There is a right way and a wrong way 1099 companies are run. If your going to work as an independent contractor you need to have some kind of risk. What i mean is you need to own or be leasing the truck, paying for fuel, paying for repairs...something. The reason is because of taxes. Your going to be making estimated quarterly tax payments and if you don't know what you're doing your going to end up with a 5 figure tax bill come end of the year. I don't want to get too much into it, but the reason you need some kind of risk is because of write offs, which saves you a ton on taxes.

If your just jumping into a truck that the company pays for, you don't pay for fuel, all you do is drive the truck then the company is basically paying you employee wages while not giving you employee benefits, it's just that simple.

One of the dispatchers did say "You get to write everything off though." ...so would you say this company is doing things more the right way?

Regardless, I shall call them tomorrow and get all the details.

I'll most likely just go with Prime though. I was only considering this company since what I've been reading about trying to find a good, wholesome, driver-friendly small to medium sized carrier that's doing it all the right way to work for- if you can... but apparently this company is not doing it all the right way and is in fact doing something illegal.

I have noticed they've switch insurance companies a lot in a short amount of time, used to go by a different name until recently, and seem to have several different addresses. They're just all over the place.