They Make You Work As A Contractor

Topic 9918 | Page 1

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Eddie F.'s Comment
member avatar

Hi folks,

I saw a job that I think would be perfect for me (ferrying tractors (no trailers) from point A to point B, and returning to point A in a different tractor). No forced dispatch, work only when you want, etc.

The only problem is that they make you work as a contractor, not as an employee. Which means twice the social security tax, no workers' comp insurance, and worst of all, potential liability - (they require that you post a $1,500 cash bond, but I was unable to find out just yet how much worse it could get).

The big question is: this may not be legal: the IRS has laid out steps to employers to determine if an employee could, or could not, be considered a contractor. The fact that the driver will only work for this carrier, plus the fact that the carrier controls what the driver does, argues that the driver is really an employee rather than a contractor. The IRS could come back on the carrier and demand that they pay employment taxes, etc. (I saw this article on Legal Zoom, which gives additional detail on the subject: https://www.legalzoom.com/articles/employee-vs-independent-contractor-what-employers-need-to-know

The quick and dirty solution is just to find a job with someone else, where the driver is considered an employee. But I was wondering if the contractor status could be challenged somehow, with the State Department of Labor or others.

If any of you have thoughts on this situation, please let me know. Thanks.

TWIC:

Transportation Worker Identification Credential

Truck drivers who regularly pick up from or deliver to the shipping ports will often be required to carry a TWIC card.

Your TWIC is a tamper-resistant biometric card which acts as both your identification in secure areas, as well as an indicator of you having passed the necessary security clearance. TWIC cards are valid for five years. The issuance of TWIC cards is overseen by the Transportation Security Administration and the Department of Homeland Security.

Scott M's Comment
member avatar

The fact that the driver will only work for this carrier, plus the fact that the carrier controls what the driver does, argues that the driver is really an employee rather than a contractor.

A lawyer explained this to me- on a business I started- I believe you are right.

The quick and dirty solution is just to find a job with someone else, where the driver is considered an employee. But I was wondering if the contractor status could be challenged somehow, with the State Department of Labor or others.

Challenged somehow? I understand that these rules you stated are IRS rules. So this would be the IRS's responsibility. I see alot of litigation if the IRS did this- could end up in court.

When I see problems, I get away from bad situations.

Eddie F.'s Comment
member avatar

The fact that the driver will only work for this carrier, plus the fact that the carrier controls what the driver does, argues that the driver is really an employee rather than a contractor.

A lawyer explained this to me- on a business I started- I believe you are right.

The quick and dirty solution is just to find a job with someone else, where the driver is considered an employee. But I was wondering if the contractor status could be challenged somehow, with the State Department of Labor or others.

Challenged somehow? I understand that these rules you stated are IRS rules. So this would be the IRS's responsibility. I see alot of litigation if the IRS did this- could end up in court.

When I see problems, I get away from bad situations.

Thank you, Jetguy. Maybe it's best to let the IRS know about this situation, and see if they later re-post the ad (on Craigslist) as hiring employee drivers.

Scott M's Comment
member avatar

There's a bunch of guys on this website that have knowledge on 1099 situations. Hopefully they will reply. Of course my advise is worth exactly what you paid for it. And I'm not a lawyer.

Eddie F.'s Comment
member avatar

There's a bunch of guys on this website that have knowledge on 1099 situations. Hopefully they will reply. Of course my advise is worth exactly what you paid for it. And I'm not a lawyer.

Thanks again, Jetguy, let's hope that the others who are more familiar with 1099 issues will reply. You're right that it's best to avoid trouble whenever possible. If they hammer the new employee (contractor) with financial liability from the start, my guess is that it won't get any better down the road.

guyjax(Guy Hodges)'s Comment
member avatar

I think you maybe a bit confused about a contractor in the trucking industry.

You can only work for them.... Yep. They want to make sure you are not working for a competitor also while working for them. Makes perfect business sense... Perfectly legal if you sign the contract. It's called a No Compete Clause. People put this in contracts everyday.

No workmans comp insurance and you pay your own social security? Welcome to being a business owner cause that is what a contractor is.

You would be moving someone else's freight (a truck). The bond they ask for in a basic damage coverage in case you damage the truck. Again perfectly legal.

Errol V.'s Comment
member avatar

Just make a search on this web site for "1099". You'll get topics like this: Employee vs Independent Contractor.

I think your post says you want to get the job, then get the state Dept. of Labor involved:

But I was wondering if the contractor status could be challenged somehow, with the State Department of Labor or others.

The best advice is right here:

The quick and dirty solution is just to find a job with someone else, where the driver is considered an employee.

... because you are and employee! Most trucking "1099" jobs are illegal, unless it's your truck you bring to the party.

Eddie F.'s Comment
member avatar

I think you maybe a bit confused about a contractor in the trucking industry.

You can only work for them.... Yep. They want to make sure you are not working for a competitor also while working for them. Makes perfect business sense... Perfectly legal if you sign the contract. It's called a No Compete Clause. People put this in contracts everyday.

No workmans comp insurance and you pay your own social security? Welcome to being a business owner cause that is what a contractor is.

You would be moving someone else's freight (a truck). The bond they ask for in a basic damage coverage in case you damage the truck. Again perfectly legal.

Thanks for the explanation, Guy. It's a sweet deal for the employer, but not so sweet for the employee/contractor.

Ralph G. ( Arejay )'s Comment
member avatar

Also, don't forget as a self-employed contractor, you will need to make quarterly estimated tax payments to Uncle Sam at the IRS.

Eddie F.'s Comment
member avatar

Just make a search on this web site for "1099". You'll get topics like this: Employee vs Independent Contractor.

I think your post says you want to get the job, then get the state Dept. of Labor involved:

double-quotes-start.png

But I was wondering if the contractor status could be challenged somehow, with the State Department of Labor or others.

double-quotes-end.png

The best advice is right here:

double-quotes-start.png

The quick and dirty solution is just to find a job with someone else, where the driver is considered an employee.

double-quotes-end.png

... because you are and employee! Most trucking "1099" jobs are illegal, unless it's your truck you bring to the party.

Thank you, Errol. Unfortunately, illegal 1099 jobs are all too common. Good idea about talking to the State Department of Labor. DOT might also want to know about situations like these. Thanks also for the link to "Employee vs. Independent Contractor" discussions.

DOT:

Department Of Transportation

A department of the federal executive branch responsible for the national highways and for railroad and airline safety. It also manages Amtrak, the national railroad system, and the Coast Guard.

State and Federal DOT Officers are responsible for commercial vehicle enforcement. "The truck police" you could call them.

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