Post by HardTimeTrucker on Nov 27, 2008 14:04:17 GMT -5
Truckers Vulnerable to State Governments Seeking Owner/Operator Revenue
Sun City, AZ
November 26 2008
Change May Force Truckers to Seek Federal Protection
California has won its court claim that FedEx owner/operators are indeed employees -- and not independent contractors. Other state governments are reviewing their employing status of trucking companies which hire owner/operators. States that also determine their owner/operators to be employees can subject the 1.2 million estimated owner/operator settlements and their estimated $240 billions in revenue to be subject to employment security and workers’ compensation premiums, industry experts argue. That new status could yield an estimated tax windfall in the billions of dollars for the governments.
“At the very least, owner/operators would be found to be ‘franchisees’ of the hiring trucking companies,” says David G. Dwinell, an expert in the trucking industry. Most of the hiring trucking companies control the funds of the owner/operator, while providing little in the way of real independence, he contends. “The owner/operators’ only business choice is to drive or sit.”
Most states regulate franchises but won’t touch the companies hiring owner/operators because of the “pre-emption” issue, where only the Federal government regulates commerce. Nevertheless, the State of California has barred owner/operators from entering the Port of Los Angeles. It has instead offered the “Port of Entry” as a concession to a select, few large companies which can guarantee the port use of only late-model (non-polluting) tractors. States do have the police power and thus the ability to regulate the franchisor/franchisee relationship.
“If states decide to go after the owner/operator revenue, they would be able to access that revenue through the franchisor/franchisee regulations,” Dwinell says. “Should the governments succeed in their quest, then owner/operators will be forced to get Federal Authority and comply directly for trucking public safety requirements rather than vicariously as they are now.”
“This change would essentially end the current 19th century labor exploitation practice, called owner/operation,” Dwinell continues. “Federal regulators and the public would benefit from the end of owner/operation -- in public safety as well as in the increase in trucking revenue to those who actually drive the tractors that deliver the American way of life.”
Sun City, AZ
November 26 2008
Change May Force Truckers to Seek Federal Protection
California has won its court claim that FedEx owner/operators are indeed employees -- and not independent contractors. Other state governments are reviewing their employing status of trucking companies which hire owner/operators. States that also determine their owner/operators to be employees can subject the 1.2 million estimated owner/operator settlements and their estimated $240 billions in revenue to be subject to employment security and workers’ compensation premiums, industry experts argue. That new status could yield an estimated tax windfall in the billions of dollars for the governments.
“At the very least, owner/operators would be found to be ‘franchisees’ of the hiring trucking companies,” says David G. Dwinell, an expert in the trucking industry. Most of the hiring trucking companies control the funds of the owner/operator, while providing little in the way of real independence, he contends. “The owner/operators’ only business choice is to drive or sit.”
Most states regulate franchises but won’t touch the companies hiring owner/operators because of the “pre-emption” issue, where only the Federal government regulates commerce. Nevertheless, the State of California has barred owner/operators from entering the Port of Los Angeles. It has instead offered the “Port of Entry” as a concession to a select, few large companies which can guarantee the port use of only late-model (non-polluting) tractors. States do have the police power and thus the ability to regulate the franchisor/franchisee relationship.
“If states decide to go after the owner/operator revenue, they would be able to access that revenue through the franchisor/franchisee regulations,” Dwinell says. “Should the governments succeed in their quest, then owner/operators will be forced to get Federal Authority and comply directly for trucking public safety requirements rather than vicariously as they are now.”
“This change would essentially end the current 19th century labor exploitation practice, called owner/operation,” Dwinell continues. “Federal regulators and the public would benefit from the end of owner/operation -- in public safety as well as in the increase in trucking revenue to those who actually drive the tractors that deliver the American way of life.”