There are many gray areas surrounding when a driver is “under dispatch” or not, and an experienced truck accident attorney can help determine whether this exception applies in a particular case. Starr Austen and Miller focuses on representing individuals and their family members in serious personal injury and wrongful death cases, such as those often involved in trucking accidents.
If you or a loved one has been in a truck accident you can contact us for a free consultation to discuss your case. According to Investopedia, an independent contractor is a person or company that is under contract to work for another entity, but is not considered an employee.
Independent contractors pay their own Social Security and Medicare taxes and do not receive employee benefits. Many companies prefer to hire independent contractors rather than employees, due to the difference in cost.
It generally costs around 30% more for a company to hire an employee compared to an independent contractor, due to the additional benefits that they must provide. In June 2019, the California Assembly passed a bill aiming to make it difficult for companies to classify workers as independent contractors rather than employees, and in Sept. 2019, the governor signed it into law.
The Assembly member who introduced the bill, Lorena Gonzalez Fletcher, stated that the legislation “offers a quicker resolution than fighting in court for years over its implications for issues like workers’ compensation and unemployment insurance.” Under the law’s new “ABC” test, there are three criteria that must be met in order for a worker to be classified as an independent contractor.
One of these three criteria is that a worker cannot be classified as an independent contractor if their services are being used by an employer in the same line of business. Instead, thousands of workers who had been classified as an owner operator truck driver are entitled to the benefits and protections afforded to employees.
However, exceptions have been written into the bill excluding architects, accountants, barbers, engineers, hair stylists, insurance agents, investment advisers, real estate agents, physicians, dentists, and lawyers. Although Proposition 22 does not directly affect truckers, many workers in the trucking industry are wondering whether the new law will lead to additional changes to who is covered by AB5.
Drivers who work for Uber or Lyft were previously covered by AB5 and were subject to the three prong ABC test. While Proposition 22 does not currently change the way that truckers are classified, the new law may play a role in future decisions regarding AB5 and truck driver classification.
Additionally, an injunction preventing the state from enforcing the law has been in effect since late 2019, leaving many truckers unsure of their classification or rights. For one thing, a non-employee such as a contractor is responsible for the entire portion of their own Social Security and Medicare taxes.
Things that can indicate if a trucker is misclassified as an independent contractor instead of an actual employee include if they are required to: Trucker misclassification lawsuits have been successful in the past in collecting compensation for consumers.
$3.7 million in joint liability was assigned to employer California Cartage Express and general manager Jim Deg raw. If you work as a truck driver and have been misclassified as an independent contractor instead of an employee, you may be able to file a lawsuit and pursue compensation.
Top Class Actions has done the work of connecting you with an experienced labor law attorney. An attorney can help determine if you have a claim, navigate the complexities of litigation, and maximize your potential compensation.
Top Class Actions is a Proud Member of the American Bar Association Generally speaking, companies can only classify truck drivers as independent contractors if the truckers have control over how and when they perform their duties.
In 2016, three truckers filed a class action lawsuit against PAM Transport, alleging that the trucking company did not pay them at least minimum wage. 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.
The victory has reportedly influenced several similar cases seeking to clarify if truck drivers are independent contractors or employees. The U.S. Department of Labor states that any work the employee is required to perform while traveling must be considered on the clock.
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 401k, truck maintenance, and overtime. 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.
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. When the truckers can show that misclassification has occurred, this can lead to substantial monetary costs for the trucking companies.
In one recent case, the California federal judge presiding over the matter gave initial approval for a multi-million dollar settlement for 847 different plaintiffs who filed against IPO Logistics. According to Suppychaindrive.com, the truck drivers originally brought that lawsuit because they claimed that the misclassification blocked them from getting the legal protections they were entitled to.
Payments for overtime, minimum wages, meal break provisions, and compensation for employment expenses were a few examples named by the drivers as obligations that the company had failed to meet because of misclassification. Whether truck drivers are classified as employees or independent contractors is becoming an increasingly difficult challenge for many motor carriers when it comes to workers’ compensation and other insurance coverages, industry experts said.
“This means if the owner of a small trucking company does not require the driver to have occupational hazard insurance, they’re opening themselves up to a possible workers’ compensation claim, and possible fines.” Here are some of the criteria used by the California Labor Commissioner to assess whether a truck driver has been misclassified as an independent contractor.
These factors were taken directly out of a Labor Commissioner decision finding that a driver was an employee, not an independent contractor. This particular employee was awarded well over $100,000 in his claim for reimbursed business expenses against the trucking company he worked for.
Below are the factors that must be used by a court or Labor Commissioner to figure out whether an owner-operator is an employee or a true independent contractor. The “principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” Tie berg v. Unemployment Insurance Appeals Board (1970) 2 Cal.3d 943.
Analysis: In other words, the most important question is how much control a trucking company has over the owner-operator. Example of Facts Tending to Show an Employment Relationship: Company owns Driver’s truck, tells him where he has to go for maintenance.
Example of Facts Tending to Show an Independent Contractor Relationship: Driver works under minimal supervision of Company. Another factor is independent contractor vs. employee test is “whether the work is part of the regular business of the principal.” Analysis: If the driving is something that is part and parcel of what the alleged employer does as a business, then there would be a higher likelihood that the driver is an employee.
Another factor in the independent contractor vs. employee test is “whether the principle or the worker supplies the instrumentalizes, tools, and the place for the person doing the work. Analysis: Example of Facts Tending to Show an Employment Relationship: Company supplies Driver with a truck and a place to park it.
Example of Facts Tending to Show an Independent Contractor Relationship: Driver has his own truck and parks it anywhere he pleases. Another factor in the independent contractor vs. employee test is “the alleged employee’s investment in the equipment or materials required by his task.” Analysis: An independent contractor usually has his or her own equipment.
Example of Facts Tending to Show an Employment Relationship: Company owns the truck Driver uses. Example of Facts Tending to Show an Independent Contractor Relationship: Driver owns the truck that he uses to haul for Company.
Another factor in the independent contractor vs. employee test is “the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision.” Analysis: An independent contractor usually works with little supervision, only periodic progress checks, and delivers a final product or service. Example of Facts Tending to Show an Employment Relationship: Driver has to ask his supervisor for approval before taking any time off.
Example of Facts Tending to Show an Independent Contractor Relationship: Driver does not have a supervisor at Company. Another factor in the independent contractor vs. employee test is “the alleged employee’s opportunity for profit or loss depending on his managerial skills.” Analysis: An independent contractor is basically his/her own business.
If the independent contractor thinks that he/she can make more money by, for example, hiring more employees or changing routes or using cheaper mechanics, then it is within his/her discretion to do so. Example of Facts Tending to Show an Employment Relationship: Driver cannot choose his/her own mechanics, tires, fuel, or insurance.
Example of Facts Tending to Show an Independent Contractor Relationship: Driver chooses his/her own mechanics, tires, fuel, and insurance. Example of Facts Tending to Show an Employment Relationship: Driver is hired without any set end date for his services.
Example of Facts Tending to Show an Independent Contractor Relationship: Driver is hired on a project-by-project basis. If so, then he/she is likely an “at will employee.” If, however, the driver works on a project-by-project basis and may not be hired back at the conclusion of the project, he/she is more likely to be an independent contractor.
This issue frequently comes up in trucker misclassification cases, because most are paid by the mile or by the job. If the answer to only a few of these factors points to an independent contractor relationship, the worker can still be an employee.
Example of Facts Tending to Show an Employment Relationship: Driver is paid by the hour. Example of Facts Tending to Show an Independent Contractor Relationship: Driver is paid by the mile.
Example of Facts Tending to Show an Employment Relationship: Driver was an employee and Company switched him to an owner-operator, but his duties and job did not change. IF YOU ARE AN OWNER-OPERATOR AND BELIEVE YOU HAVE BEEN MISCLASSIFIED AS AN INDEPENDENT CONTRACTOR, YOU MAY BE OWED A SUBSTANTIAL AMOUNT OF MONEY.