Are Truck Drivers Independent Contractors or Employees?

Truck drivers’ employment status is classified based on a variety of factors. Generally speaking, companies can only classify truck drivers as independent contractors if the truckers have control over how and when they perform their duties.

A trucker may be misclassified as an independent contractor if the company sets the driver’s hours, controls mileage rates and/or load assignments, or if the company uses a GPS or another satellite system to track the trucker’s location. The same goes if the trucking company restricts the trucker from working for other carriers.

Since many states have their own employment laws and classifications regarding independent contractors, a truck driver’s employment status may vary between states.

Challenging Misclassification Pays Off

A federal judge in Arkansas ruled Tontitown, Arkansas-based PAM Transport must compensate its truck drivers for the time drivers spend in a rig’s sleeper berth, Business Insider reported.

In 2016, three truckers filed a class action lawsuit against PAM Transport, alleging the trucking company did not pay them at least minimum wage. The truck drivers’ argued that even though they may have been “off duty,” they still had job-related responsibilities.

In denying PAM Transport’s motion to dismiss the case, U.S. District Court Judge Timothy Brooks wrote that any time spent in the truck, other than for eating and sleeping, should be counted as hours worked, according to Truckers Report.

The underlying argument of the truck drivers’ lawsuit was that PAM Transport’s employment practices violated the federal Fair Labor Standards Act (FLSA), which requires employers to pay truck drivers at least minimum wage.

Nearly 3,000 truck drivers joined the FLSA lawsuit. The victory has reportedly influenced several similar cases seeking to clarify if truck drivers are independent contractors or employees.

Are Truck Drivers Eligible for Minimum Wage Benefits?

If a truck driver is classified as an employee, the law requires they be paid at least the hourly minimum wage rate plus 1.5 times the rate if they work more than 40 hours a week or eight hours in a single workday.

The U.S. Department of Labor states any work the employee is required to perform while traveling must be considered on the clock. In the case of truck drivers, they may be out a maximum of 14 hours per day, with a maximum of 11 hours behind the wheel.

What Are the Differences Between Independent Contractors and Employees?

In terms of truck driving, independent contractors and employees have the same skill set, but those classified as employees are entitled to substantially greater benefits and protections.

Independent contractors are people or firms hired on a nonpermanent basis for a specific project or job. They can typically complete the work during hours they choose, so long as they meet the client’s deadline.

The U.S. Department of Health and Human Services explains a company has limited control in how an independent contractor performs the job, so long as it is completed on time. Independent contractors are typically paid by the job as opposed to on an hourly basis.

Employees don’t typically have the same have flexibility as independent contractors, but are paid a set hourly rate and receive various other benefits such as 401(k), truck maintenance, and overtime.

What Are the Differences Between Owner Operator and Company Truck Drivers?

There are a few significant differences between owner operators and company truck drivers, according to Smart-Trucking.com. Typically, company drivers:

• Don’t have control over their own schedule
• Don’t have to pay for truck maintenance costs
• Receive steady paychecks
• Have job security
• Do not have to worry about startup costs

However, company drivers may earn less money because driving jobs are typically paid based on a set mileage rate, with some pay increases over time, but will eventually be capped. In addition, truck drivers classified as employees have less time at home and are often stuck with commuter costs.

Benefits for owner operator drivers include:

• Potential higher pay rate (including certain tax advantages)
• Choosing their own equipment
• Setting their own schedule
• Having a greater safety element

However, there are startup costs associated with buying a truck and spending one’s own money to take care of it. There is also greater stress due to the financial risks and pressures associated with truck maintenance, along with the complete dependency on the carrier with whom they are contracted. Owner operators do not receive benefits like health insurance and more through a company, and must pay for these things themselves, nor are they guaranteed minimum wage.

Preliminary Approval Given to Settlement in Misclassification Suit

Misclassification suits have been on the rise as more truck drivers realized that they should have been treated and paid as employees. Many of them choose to band together and file class action litigation against the trucking company in question.

When the truckers can show that misclassification has occurred, this can lead to substantial monetary costs for the trucking companies. In one case, the California federal judge presiding over the matter gave initial approval for a multimillion-dollar settlement for 847 plaintiffs who filed against XPO Logistics.

Those drivers had accused the company of misclassifying them in a lawsuit that began back in 2016. The plaintiffs will be entitled to receive $70 for every day they worked for the company as part of the settlement.

The truck drivers originally brought that lawsuit because they claimed that the misclassification blocked them from getting the legal protections they were entitled to, according to Suppychaindrive.com. Payments for overtime, minimum wages, meal break provisions, and compensation for employment expenses were a few examples named by the drivers as obligations the company had failed to meet because of misclassification.

The workers alleged the company was in the practice of saying drivers were contractors in order to avoid these requirements, when in fact the working environments of the truckers actually showed the workers met the definitions for employees.

XPO continues to dispute the allegations made by the truckers even in light of the settlement approval.

Join a Free Trucker Overtime Class Action Lawsuit Investigation

If you have worked as a contract truck driver and believe your carrier has failed to pay you minimum wage or overtime, or otherwise might not have honored a contract with you, you may qualify to file a truck driver lawsuit or class action lawsuit.

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