How Does Employee Misclassification Affect Trucking Independent Contractors?

Companies have been accused of misclassifying workers as independent contractors.

In fact, it is not uncommon for long-haul drivers to be labeled and categorized as trucking independent contractors. Companies may classify drivers this way even if they do not meet the criteria considered reflective of a true independent contractor.

Several trucking companies have been accused of federal labor law violations after allegedly misclassifying their long-haul truckers as independent contractors and exempt from employee legal protections.

What Is the Difference Between an Employee and Independent Contractor?

Whether a worker is an employee or an independent contractor depends in large part on how much control the worker has while on the job and how much of their schedule is dictated by the company. The company’s designation of a worker as an independent contractor doesn’t necessarily make them so.

Generally, independent contractors are mostly free in their schedule and are paid to get their work done by a certain deadline.

However, workers in the long-haul trucking business often have far less control over their work than is typical for a truly independent contractor.

For instance, the trucking company may control the contractor’s work hours, their schedule and load assignments, and mileage rates. The company also may supervise and direct their work, track their location, and more.

This supervision and control over nearly every facet of the work day indicate the truckers lack the sort of control independent contractors generally have.

The Cost of Long-Haul Trucking

Trucking companies allegedly have been misclassifying long-haul truckers in order to cut down on labor costs and to push off business expenses onto the drivers.

As independent contractors, long-haul truckers bear responsibility for any work-related expenses and cannot expect compensation from the companies they drive for.

Long-haul truckers can have various expenses while on the job, including the following, according to Jackson Hewitt:

• Purchase or lease of truck
• Fuel refills
• Fuel taxes
• Auto insurance
• Licensing fees
• Truck maintenance

But the biggest expense they face is the purchase or lease of a long-haul truck.

Like any personal purchase, even if it is made for a sole proprietorship small business, this large expense should come with certain privileges, such as the ability to determine how it is labeled and when and how it is used.

A misclassified independent contractor of any kind is also denied common workplace legal protections and fair and legal wages, according to the U.S. Department of Labor.

The misclassified drivers are not compensated with health insurance benefits, workman’s compensation, or unemployment insurance.

In addition, they must pay self-employment taxes, according to Truckstop.com.

By the time these expenses are subtracted from the wage a driver earns and are averaged over the number of hours a driver spends behind the wheel, take-home pay may be less than minimum wage.

If a driver were categorized as an employee, the company would be required by law to ensure the driver was being paid at least minimum wage.

What Is a 1099 Worker?

Essentially, 1099 workers are self-employed independent contractors. Instead of receiving a W-2 form for their taxes like employee does, these workers receive a Form 1099, according to Fundera.

Truck drivers not directly employed by trucking companies absorb a lot of the business costs the companies should pay, and long-haul truckers misclassified as 1099 independent contractors bear the brunt of many significant costs.

Hundreds of long-haul truckers misclassified as 1099 independent contractors have operated that way for years.

As costs of health care, fuel, maintenance, insurance, and new trucks have increased, the truck drivers’ pay has comparatively decreased.

Certain factors delineate the difference between an employee and an independent contractor.

Truck drivers are unique in that their supervisors can’t look over their shoulders to see what they are doing every day. However, there are other ways to determine how much control an employer exerts over a driver and their schedule.

A worker is considered an employee rather than an independent contractor unless the can meet the following conditions, according to the California Department of Labor:

• The worker’s performance of their duties is free from the control and direction of the company, both under the contract and in fact
• The worker does tasks outside the typical course of the company’s business
• The worker engages in an independently established occupation or business of the same nature as that involved in the work being performed

Independent contractors control how and when they perform their work and are free to ask others for assistance. They also are free to work on assignments for other trucking companies with no impediment.

Worker Misclassification Penalties

Employers may face a number of penalties if they misclassify their workers.

Companies that have long-haul truckers misclassified as 1099 workers could be in violation of the federal Fair Labor Standards Act. They could also be in violation of various state regulations that determine the difference between employee and independent contractor.

Penalties can include the employer having to pay back taxes, cover previously withheld benefits, and face other penalties, according to JustWorks. Criminal penalties could be involved, including a fine and prison time, if it is found the misclassification was done in knowing violation of the law.

Companies may also find themselves facing litigation for worker misclassification.

Trucker Misclassification Cases

Many long-haul truckers misclassified as 1099 workers have filed lawsuits against the trucking companies for which they have driven.

In 2019 Swift Transportation, the nation’s largest trucking carrier, agreed to settle over claims it was responsible for misclassifying workers as trucking independent contractors when they should have been classified as employees.

Five plaintiffs claimed they should have been classified as employees because Swift controlled their work schedules and what routes they should take. They claimed they should be afforded the same benefits and pay as that of employees as required under the Fair Labor Standards Act.

A judge ruled the contractor agreements the workers signed were actually employment contracts, thereby classifying the workers as employees.

A San Diego judge in January 2017 dismissed a lawsuit filed by the California Trucking Association (CTA), according to Trucks.com. The CTA claimed owner-operators of long-haul trucks should be classified as trucking independent contractors rather than employees.

The CTA filed its lawsuit against California Labor Commissioner Julie Su, claiming she misused an employment law to determine if someone was an independent contractor or an employee. The lawsuit attempted to stop Su from using this law.

But U.S. District Judge Cathy Ann Bencivengo disagreed, according to Trucks.com, writing: “CTA members are free to use independent contractors or employees. However, CTA members must do more than simply label a truck driver as an independent contractor; the truck driver must in fact be an independent contractor under California law.”

In California alone, long-haul truck drivers filed about 800 wage claims between 2011 and mid-2017 based on data from the California Labor Commissioner’s office, Trucks.com reported.

These workers claim the trucking companies they work for have not paid them sufficiently for their wages, overtime, unemployment insurance, and workers’ compensation.

Also in California, across 300 cases, drivers have won about $40 million in awards with nearly 200 claims still pending in court, according to Trucks.com.

Filing a Trucking Independent Contractor Misclassification Lawsuit

A growing number of truckers are coming forward with these allegations they were misclassified as independent contractors when they should be considered employees.

If you have worked as a driver for a long-haul trucking company and believe you are a misclassified independent contractor instead of an employee, you may be able to file an individual lawsuit or join a wage and hour class action lawsuit.

Filing a lawsuit can help you recover wages and benefits that would be owed to you as an employee.

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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