What Is an Independent Truck Driver?

If you work for a trucking company and have been classified as an truck driver independent contractor, you may have been misclassified by your employer unless you meet several specific criteria.

Truck drivers can be employees or independent truck drivers, and for both types of workers, the gist of the job is the same: driving a truck on behalf of a company to transport goods and materials over land. However, independent truck drivers have additional responsibilities as owner-operators, and may be covered under different labor laws than workers who drive for a specific company.

What is the Difference Between an Independent Truck Driver and an Employee?

There are several key differences between workers who are classified as independent contractors versus employees.

Independent contractor truck drivers, also known as owner-operators, are truck drivers that are not classified as employees of the trucking company that they drive for. Workers who are classified as independent contractors rather than employees are subject to a variety of responsibilities and are not entitled to the rights and privileges afforded to workers classified as employees.

Independent contractor drivers are able to set their own schedules, choose the type of work they want to do, and choose their own equipment. However, this classification means that truckers are often responsible for expenses that would be covered by their company if they were classified as an employee.

True independent contractor drivers are not under the company’s control regarding what hours they work, what routes they follow, and whether they work for other trucking companies as well.

Several factors must be considered when determining whether a worker is an independent contractor or an employee. These factors can be broken down into three categories: behavioral control, financial control, and the relationship between the employer and worker.

Workers who are under the behavioral control of their employer are likely to be employees, rather than independent contractors. Types of behavioral control may include instructions on when or where to work, what tools to use, and where to purchase supplies.

Workers who are subject to financial control from their employers may also be employees. Financial control may include the employer owning or putting significant investment into the equipment used by the worker, the worker being prohibited from working for other companies, and the employer neglecting to reimburse the worker for business-related expenses.

The relationship between the employer and worker may also be useful in determining whether the worker is an employee or independent contractor. If this relationship is expected by both parties to continue indefinitely, rather than for a set period of time, the worker may be an employee. Additionally, workers who perform job duties that are integral to the employer’s line of business may be employees rather than independent contractors.

How Much Do Owner-Operators Make?

An independent owner-operator’s annual gross revenue can dwarf the salary or wages paid to an employee driver. Truck Driver Salary reports that the average annual salary for a driver working for a company as an OTR (over-the-road) driver is $59,600, compared to an average annual salary of $220,591 reported by a survey of more than 100,000 owner-operators.

The bad news is that the costs of operation substantially cut into the amount of compensation an independent driver can take home. After those costs are deducted from annual revenue, the average first-year driver takes home only $52,500, with a typical range after that first year of between $45,000–$80,000.

These costs include the registration, filing and payment of fuel tax and road tax. Independent drivers are also responsible for obtaining state permits, equipment and load insurance, and purchasing license plates. Additional expenses include the costs of owning, operating, and maintaining their own trucks.

Workers who are classified as independent truck drivers are responsible for paying their own Medicare and Social Security taxes, rather than having their employer pay it for them. These workers are also exempt from being covered by workers’ compensation and may not be subject to regulations regarding minimum wage and overtime pay.

Truckers who are classified as employees rather than independent contractors are afforded many more privileges and protections. Employers are required to pay their share of Social Security and Medicare taxes, as well as providing workers with paid time off, overtime pay, and workers’ compensation, and cover costs for the vehicle.

Some independent contractors claim that due to the high cost of these responsibilities, their companies have purposefully misclassified them in order to shift the financial burden to the contract truck drivers.

What is AB 5?

Under a recent California law known as California Assembly Bill 5, it has become much harder for employers to classify workers as independent contractors unless they meet several requirements.

Assembly Bill 5 was passed by the California State Assembly in May 2019, and was passed in September 2019 by the state Senate. The California bill set in place several regulations for employers to follow when determining employee classifications. Under AB 5, workers who are classified as independent contractors must meet several requirements. These requirements are known as the ABC test, and all parts must apply in order for a worker to be an independent contractor.

• The worker must be free from the control and direction of the employer. This means that the employer cannot dictate how or when the employee works.
• The worker must perform work that is outside of the usual course of business for the employer.
• The employer must be engaged in an independently established occupation doing the same type of work they are completing for the employer.
• Under the ABC test, trucking companies whose main course of business is trucking and delivery may not hire and classify workers as independent truck drivers. While some truck drivers worry that the new law will disrupt the long haul trucking industry, many gig workers, such as Uber and Lyft drivers, believe that the changes will provide them with benefits and job security.

On Jan. 16, 2020, a judge from the U.S. District Court for the Southern District of California ruled that AB 5 cannot be enforced in the trucking industry while a lawsuit from the California Trucking Association is being litigated. This decision puts the law on hold until the courts make a decision on whether or not the act is preempted by the Federal Motor Carrier Safety Act and the Federal Aviation Administration Authorization Act. Although this restraining order is only temporary, the ruling may be made permanent later on.

“There is little question that the state of California has encroached on Congress’ territory by eliminating motor carriers’ choice to use independent contractor drivers, a choice at the very heart of interstate trucking,” the court ruled. “In so doing, California disregards Congress’ intent to deregulate interstate trucking, instead adopting a law that produces the patchwork of state regulations Congress sought to prevent.”

More recently, the applicability of AB5 to truckers has become an even larger question mark in the legal field. California recently passed Proposition 22 – a ballot measure which exempts Uber and Lyft drivers from the requirements for independent contractor classification. Companies like Uber and Lyft, who currently face independent contractor lawsuits in California, heavily lobbied for the ballot measure. As a result, the measure passed in the 2020 general election.

Although Proposition 22 is supported by some industries, others including the trucking industry have criticized the measure. According to a letter to the court from the California Trucking Association (CTA), Proposition 22 hinders AB5’s “general applicability.” Originally, the law included exemptions for various industries. However, with further exemptions granted by Proposition 22, the CTA argues that AB5 has become even more targeted at industries such as trucking.

“Now AB5 has been amended yet again and once again rendered even less generally applicable than before,” the court letter contends. “After passage of Proposition 22, AB5 is not a generally applicable law — not even in the transportation industry, much less more broadly.”

With these additions and other barriers, AB5’s applicability to the trucking industry have been called into question. If AB5 can be applied to truckers, pending truck driver misclassification lawsuits could have an easy path to victory. However, if the opposite is held as true in court, truckers seeking employee classification and its associated benefits could face an uphill climb.

Filing an Employee Misclassification Lawsuit

While some independent truck drivers like the freedom and flexibility being an independent truck driver can provide, other contract workers believe they have been purposefully misclassified by their employers in order to secure profits and skimp on benefits. Due to the cost of classifying a worker as an employee rather than an independent contractor, many workers in various industries have reported their employers misclassifying them on purpose to avoid paying benefits.

If you are an independent contractor trucker and believe that you have been misclassified by your employer, you may be able to hire an attorney and file a class action lawsuit against your current or former employer for this wage and hour violation. Victims who file wage and hour lawsuits may be able to collect financial damages for these violations, including backpay on wages and other benefits.

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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