Owners of logistic and trucking companies have sometimes played fast and loose with the independent contractor/employee distinction by classifying their employee drivers as independent contractors. By misclassifying their drivers as independent contractors instead of employees the companies can avoid paying taxes, state benefits like workers compensation and unemployment insurance, not follow laws like the Fair Labor Standards Act and the Family Medical Leave Act, and make otherwise improper deductions from the drivers’ paychecks. This last advantage is maybe the most important for the companies.
Some trucking companies force their drivers to pay all kinds of expenses and fees. The deductions can be for necessities like tires, gas, and maintenance even when the driver doesn’t own the truck to penalties for accidents and government fines. Misclassifying employees as independent contractors allow the companies to push the hassles and costs of being an owner to the drivers while retaining the upside for themselves. These deductions can push a driver’s effective hourly rate to well below the federal minimum wage of $7.25 an hour. While interstate truck drivers may be exempt from the overtime requirements of the Fair Labor Standards Act, the exemption does not allow the companies to pay their drivers less than minimum wage.
The Fair Labor Standards Act regulates what an employer can deduct from the employee’s paycheck for and how much they can deduct from the paycheck. The general rule is that an employer can not make a deduction that causes the employee’s paycheck to go below the minimum wage. Making deductions for fuel, repairs, etc. that cause the driver’s pay below minimum wage means could be a violation of the Fair Labor Standards Act. In most states the minimum wage is calculated based on a work week (i.e. divide the pay for the week by the numbers of hours worked that week and the rate needs to be above the minimum). Some states have higher minimum wages than the federal rate and some states like calculate minimum wage on a day by day basis (i.e divide the pay for the day by the number of hours worked that day and the amount has to be above the minimum wage).
The companies argue that the drivers are independent contractors and not employees so the Fair Labor Standards Act does not apply. As discussed in previous articles determining whether a worker is an employee or independent contractor is fact intensive. When a driver doesn’t own the truck classification as an independent contractor is especially circumspect. There have been a number of recent court decisions that found drivers had been improperly classified as independent contractors instead of employees. For instance a court in California ruled drivers at the Port of Long Beach had been improperly classified as independent contractors. State legislatures are also working to tackle the problem of driver misclassification. New Jersey Governor Chris Christie recently vetoed a state bill that would have made it so drivers are presumed to be employees unless the company can prove otherwise.
If you are a truck driver who DOESN’T own their own truck, but is treated as an independent contractor, then you may have been misclassified and you may have been paid improperly. It is important to speak with an attorney on your jurisdiction. In Georgia contact attorney Benjamin Kandy.