Do you staff your trucking company with owner operators or employees? If you think that you use owner operators, you may be incorrect. Companies across the US are misclassifying their employees and that mistake can cost them.
Owner Operator vs Employee
Independent contractor misclassification is common across all types of businesses, including the trucking industry. Over 30% of companies misclassify employees as independent contractors. Whether the misclassification is accidental or intentional, companies can still face stiff penalties if it is discovered. And with more than 30 states toughening laws against misclassification, the chances are good that it will be discovered.
Signs of Misclassification
Accidental misclassification often occurs when you treat independent contractors in the same way that you treat employees. This can include:
- Demanding an owner operator not work for other companies
- Making an owner operator put your logo on their truck
- Dictating how an owner operator loads, unloads and transports
- If you do performance evaluations on owner operators
- If you control the owner operator’s workload and don’t allow substitute drivers
- If you make them wear your company uniform
- If you give them assigned pick-up and delivery routes they must follow
When you use owner operators for your workloads then you need to understand they are independent and you can’t control certain aspects of their performance. When you try to dictate job performance or make them appear to work for your company alone then they become employees and you are responsible for overtime, holiday pay, certain expenses, disability and worker’s compensation.
Protect Your Business
It is important to protect your business by making sure that you understand the difference between owner operators and employees. You should also have additional insurance policies, such as occupational accident coverage to protect your business and employees who are misclassified as independent contractors.
To learn more about transportation safety, risk reduction, and coverages, contact us.