Know Your Drivers: Employees or Owner Operators?

High-visibility suits in recent weeks against FedEx Ground and Amazon underscore the importance of properly classifying drivers as owner operators or employees. With more than 30 states now toughening their laws, the costs and risks of misclassification are mounting. Whether your firm does it intentionally or accidentally makes little difference; you’re likely to face a stiff fine in either case.

Accidental misclassification is likeliest to occur when you treat independent contractors in the same way that you treat employees. If your firm does any of the following, you may be at risk:

  • Demanding a driver not work for other companies;
  • Making a driver put your logo on his truck;
  • Dictating how a driver loads, unloads and transports;
  • Giving a driver a performance review;
  • Controlling a driver’s workload and not allowing substitute drivers;
  • Making a driver wear your company uniform;
  • Assigning required pick-up and delivery routes.

When you give an assignment to a driver who is classified as an owner operator, you must understand he’s independent and that you can’t control certain aspects of his performance. If you try to dictate job performance or make a driver appear to work for your company alone, he becomes an employee and you are responsible for overtime, holiday pay, certain expenses, disability and worker’s compensation.

To ensure you don’t misclassify your drivers, be sure you understand the distinction that laws in your state make between owner operators and employees. Also, to protect your business, be sure to have additional insurance policies, such as occupational accident coverage. Contact us to learn more about transportation safety, risk reduction, and coverages.

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