Driver Inc. employers face $250K fines, labor minister warns

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Trucking companies that use the Driver Inc. business model to misclassify employed truck drivers as independent contractors will face federal fines of up to $250,000, Labour Minister Seamus O’Regan, Jr. announced in Toronto on Nov. 7. Workers pay for social programs and businesses benefit from it, the minister said in Ontario Trucking Association offices, adding […]

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[shintop]

Great..employees won't be targeted. Almost 99% of the employees that apply for work, their first condition is that they do not want to go on payroll and be paid on their company. Every time we say no, they disconnect the call. I think the target should be employees and not employers, as employers are willing to put the drivers on payroll, but it's the employees that refuse.

 

[JACKBURTON]

Great..employees won't be targeted. Almost 99% of the employees that apply for work, their first condition is that they do not want to go on payroll and be paid on their company. Every time we say no, they disconnect the call. I think the target should be employees and not employers, as employers are willing to put the drivers on payroll, but it's the employees that refuse.

If nobody will hire them then they will have to change tactics. If companies that will hire them get bit to the tune of a quarter million for every violation, they will close down fast I think.

 

[Mario]

I still don't get it. If your an owner operator and your truck plates and Insurance are under the company you work for your company will not let you work for someone else. If your Driver Inc you have the option to work for 1 company on Monday another on Tuesday another on Wednesday and so on. So who more falls under the questions of who is an employee????? Also would Lawyers, Accountants, Load Brokers and any other profession not also be considered Driver Inc as they are not asset based? Just my 2.714% cent fuel surcharge charge opinion.

 

[JACKBURTON]

I still don't get it. If your an owner operator and your truck plates and Insurance are under the company you work for your company will not let you work for someone else. If your Driver Inc you have the option to work for 1 company on Monday another on Tuesday another on Wednesday and so on. So who more falls under the questions of who is an employee????? Also would Lawyers, Accountants, Load Brokers and any other profession not also be considered Driver Inc as they are not asset based? Just my 2.714% cent fuel surcharge charge opinion.

So from what I understand these drivers consider themselves a "corporation" to avoid paying certain taxes/getting corporation tax breaks. Most times they do not have their own equipment. Ultimately they work for Company X but are not subject to the benefits of being an employee (sick leave, overtime etc) and the company does not have to pay taxes and fees that other companies do. (payroll, unemployment, perhaps WSIB?)

CRA describes it thusly--"If an individual incorporates but has labour characteristics virtually indistinguishable from an employee – for example, working exclusively for one employer or not owning/having registered any equipment assets – you will be deemed a PSB (personal service business) and will need to file with the CRA as such."

So, ultimately, they are pretty much working "under the table". Company gives them equipment, pays them xx$ a mile, and have to pay nothing further. The driver gets xx a mile, which the Driver Inc carrier may or may not choose not to pay income tax on.

Carrier can then undercut other carriers on rates also, as they do not have the additional expense of having an actual employee on the books.

 

[Mario]

Still seems like a double standard whether you own a truck or you don"t. I always wondered about mechanics that own a tool box ( and you ask mechanics most say they spent $20-$30000on it ) and work for one company should they not be deemed as an owner operator?
The reasoning of being able to charge cheaper rates and a level playing field seems also fishy. The bigger companies promoting this idea seem to be the same ones that get bulk fuel, Insurance and trucks and trailers cheaper with their buying power. The same was done with speed limiters and E-Logs. Keep a level playing field. Just my 3.125% fuel surcharge opinion

 

[JACKBURTON]

Still seems like a double standard whether you own a truck or you don"t. I always wondered about mechanics that own a tool box ( and you ask mechanics most say they spent $20-$30000on it ) and work for one company should they not be deemed as an owner operator?
The reasoning of being able to charge cheaper rates and a level playing field seems also fishy. The bigger companies promoting this idea seem to be the same ones that get bulk fuel, Insurance and trucks and trailers cheaper with their buying power. The same was done with speed limiters and E-Logs. Keep a level playing field. Just my 3.125% fuel surcharge opinion

Well by that logic where does it end?
I own my own pizza cook hat so I can go work at Jimmy's Pizza full time but not actually be an employee? I can enjoy the perks of the tax breaks of being my own small incorporated business and Jimmy doesn't have to pay any payroll taxes. Sounds good I guess?