The biggest differentiator between the two is who owns the authority of the operator. Authority is a designation that every airline needs to transport goods to the United States. Owner-operators have their own authority, so anyone in their business can successfully and legally transport goods. Not all independent contractors have their own authority, so they look for other companies to work with. With the hours of service that truckers must meet, this can lead to an independent business that is unable to meet the customer`s needs, so the customer can turn to a larger transportation company with team service. In some cases, companies may intentionally misclassify employees as independent contractors to avoid paying certain benefits, such as Social Security and unemployment insurance taxes. In some recent cases of payroll and hourly lawsuits, freight forwarders have paid millions of dollars to drivers to reimburse them after misclassifying them as independent contractors to avoid taxes. Different insurance benefits: Employed truck drivers are usually eligible for different types of insurance benefits, so this employment status may be more advantageous for you if you want your business to offset insurance costs. While the cost may come from your paycheck depending on the type of insurance, it may be lower than the one you bought yourself. Let`s take a common scenario in the freight forwarding industry: ABC Trucking works as a motor carrier and classifies all of its drivers as independent contractors (ICs): Things that may indicate whether a trucker is wrongly classified as an independent contractor rather than an actual employee are when they need to do the following: Freedom to choose how you work: For many people, freedom in a job is a huge advantage, because much of the day is spent on the tasks of your job. Since as an independent truck driver, you can often choose your own vehicle, jobs, and routes, you have a lot of freedom to create a work environment that will help you succeed. A little money can be earned by the independent truck driver if you find a good niche market.
Customers can be notoriously slow payers, especially for a truck operation. Slow accounts receivable can be devastating for a single-truck operation. As an owner-operator, you have full autonomy to find your own cargo, earn 100% of the income, be your own boss and determine your destiny in the world of truck transport. Contact Prime today to speak to a recruiter. We will answer your questions and help you start your own exciting career in the freight forwarding industry. Take advantage of the following benefits of being a salaried truck driver to help you compare and choose your preferred job status: A truck driver can and often works as an independent contractor. Although this is usually the case, many truck drivers who work today may be wrongly classified as independent contractors instead of company employees – and therefore deprived of their legal social benefits for the work they do, including decent wages, overtime, breaks, etc. If the client`s habits are predictable, the freelancer can do the same and take a break at the same time. Otherwise, it can cause problems. Choosing your own equipment: Although equipment costs are important to consider, you can enjoy owning or renting your own truck as it allows you to choose a vehicle that is comfortable and works well for you. It also makes it easier if you drive for multiple companies or want to park your vehicle near you at the end of your working hours.
A truck driver can and will often work as an independent contractor. However, while this is generally true, many truck drivers working today can be mistakenly classified as. Read More An owner-operator is an independent contractor who can choose who they want to work with, get the W-9 from all the companies they work with, own their own equipment, etc. Basically, an owner-operator is an independent contractor with a business associated with his name. Depending on your state, truck drivers may be independent contractors, also known as owner-operators, or employees of a freight transportation company. A truck driver`s employment status may change over the course of their career if they decide to work for another company or move to a state where all truck drivers must be considered employees. Working as an independent contractor or employee in the freight forwarding industry offers different benefits, but people in both classifications usually do similar work. Ownership of equipment. The drivers did not own the trucks. They did not have valid and enforceable hire-purchase agreements. In recent years, many freight forwarding companies, just like ABC Trucking, have been reviewed by state and federal agencies. Agencies like the IRS or your state Workers` Compensation Board can and will challenge the classification of independent contractors.
Once a driver is classified as an employee, the transportation company would be responsible for the employer`s share of payroll taxes (6.2% of Social Security, 1.45% of Health Insurance), paid holidays, disability, and the cost of employee compensation. According to Investopedia, an independent contractor is a person or company that is under contract to work for another company, but is not considered an employee. Independent entrepreneurs pay their own social security and health insurance taxes and do not receive social security benefits. Independent entrepreneurs are often referred to as “freelancers.” More stable salary: A stable salary allows you to plan for each paycheck and budget the money you spend, which can help you make sure you have enough money to meet the needs. Employed truck drivers typically receive a constant salary or hourly wage, sometimes with overtime opportunities, on a bi-weekly or monthly basis. Instead, thousands of workers who have been classified as truck drivers are entitled to the benefits and protection afforded to workers. Many types of workers will be covered by the new classifications, including all employees who provide services in the same industry as their employer. Once you start your career as a truck driver, you should decide whether you want to become a business driver or an independent contractor.
Customers often have high expectations of freelancers, sometimes impossible to meet, such as.B. accelerated delivery times. Control. ABC Trucking had full control over the work of its drivers. Drivers only determine their routes. Companies that hire employees often have to offer their employees benefits such as health insurance and workers` compensation, and the same goes for truck drivers. .