Owner Operator Contract Agreement

Candy_7777

Candy_7777

Member
Sep 28, 2011
31
3
8
5
Can anyone help here!

Is an owner operator contract without stating remuneration of the owner operator a valid contract? How does this contract differentiate the owner operator from being an employee (short of making the OO responsible for fuel, maintenance of the truck and insurance)?

I'm at a lost here... Was looking for a new freight company to work for... sounded very interesting until contract negotiation... were told then... no negotiation, this is the contract, sign it or forget it
 
Candy_777 - I know that most established carriers all have legitimate O/O contracts in place. What is it specifically that set you off from this one? From your 3 points above, at our company the O/O is responsible to ensure his/her truck is properly maintained, we issue fuel cards and we have a very reasonable fuel cap program and we pay 100% insurance. Not all carriers may operate this way, I guess it's what makes sense to you to operate your truck.
 
Thanks for your reply Maggs; what really set me off is the contract has no compensation. It lists everything the O/O is responsible for but not what the company is willing to pay. It states when it will pay but not what it will pay. Is this the standard out there?
 
Every contract I have written or seen stipulates remuneration and accessorials are contained in a separate attached Schedule "for services". Very few contracts I have ever seen contain actual rates in the main contract.
As far as separating an o/o from an employee, there are generally definitive statements indicating the separation of the two entities, and a paragraph specifically states "not an employee". That is also part of the reason the O/O obligations are stated in the main body of the contract, not a separate schedule, and the opening preamble generally states "the company may offer freight from time to time".
To answer your specific question, so long as there is a paragraph that mentions remuneration "as per..." you should be fine.
Finally, there has never been, to my knowledge, "contract negotiation". The deal is what the deal is. The chaos created with 100 owner ops with 100 different deals is painful to think about.
 
Is there a standard?

Candy_7777 said:
Thanks for your reply Maggs; what really set me off is the contract has no compensation. It lists everything the O/O is responsible for but not what the company is willing to pay. It states when it will pay but not what it will pay. Is this the standard out there?
Click to expand...

Hi Candy, yes every trucking firm has their own standard on what per mile rate, what pick & drop rate, what waiting time rate & FSC rate is and is should be listed on a "schedule A" as what we call it. Also it should indicate when you are paid. Our O/O are bi-weekly and direct deposit. The company should also be clear on who pays for tolls, licensing & border crossing fees etc....
 
The contract should state HOW their pay system works, WHEN you can expect payment and what you need to do in the way of submitting paperwork to ensure that you are paid on time.

Governments have been cracking down on carriers who take liberties with the "independent contractor" definition. So a carrier needs to be careful if they pay for things like tolls, fuel cards, insurance...an independent contractor is supposed to pay for those himself. A carrier who does too much of that runs the risk of having its owner-operators deemed employees of the carrier...and they get wacked with all the payroll tax deductions and oher costs that normally accrue to having employees.

The best way to go (as a carrier) is to pay percentage... 72% to 85% is most common depending on whether or not the operator provides his/her own trailer. Mileage is cumbersome to calculate and there's no provision for the other stuff the driver does that is normally considered in the rate..this is especially true if you're moving flatbed or over dimensional freight that requires alot work apart from just driving.

If the carrier you lease on to runs into the US, the carrier contract must also abide by the "Truth in Leasing" regulations. Some highlights..any holdback taken by the carrier must be paid back with interest, less any amounts legitimately deducted upon contract termination. You must be paid every two weeks at a minumim...not twice monthly, monthly..etc

You would be well advised to have a lawyer look over any contract prior to signing.
 
Yes, seperate schedule for compensation which is noted in contract. Important to state "subject to change with written notice" will cover you if you need to make changes.
 
Thank you

I want to say thank you to everyone who replied to my post although it has been quite a while. I can now say that the company we were trying to go work for at the time, was really not interested in sharing all the required information for us to actually make this contractual agreement truly a contractor vs employer relationship... They preferred to keep everything in the dark and assume that all OO are dumb and would do whatever they decide they need; more or less like an employee /employer relationship which is really not what we were looking for. The last comment from the hiring individual when we tried to get answers (prior to sign the contract and before I could even take it to our lawyer) was: " Obviously you are not interested to work here" which was far from the truth, we were actually quite interested to go work for them but we needed some answers to make sure we understood what we were getting into, but we never got a chance. As it seems, from this hiring individual, questions weren't necessary, clarifications on the contract were unwarranted. Who goes sign a contract blindfolded? If you do you are simply stupid.

So if you are an OO or thinking of getting into that seat, remember the contract is an important part of the agreement and it should not be brushed off because you "need" to work or you may be very unhappy of the end result.

We have chosen a different path and we have been completely independent forthe last 5 months. Yes it is tough out there being a newbie but we are making it. We have made some contacts and people are very satisfied with what we do. We run mainly TEAM from Toronto/Montreal to the West Coast but we also do single loads to keep us moving.

We're hoping to grow our business but in the mean time we will continue to provide a service of excellence and reliability.

Candy
 
You must log in or register to reply here.
Top Bottom