Unpaid drivers

[loaders]

There is an interesting and timely article on the CBC website today regarding the large number of unpaid drivers in our industry. It highlights the story of one young man who after driving for weeks, has yet to be paid for his labours. Surprisingly, the investigators were able to find the employer who, even more surprisingly agreed to speak publicly about this case. Lo and behold, this character has a history of failed businesses and is involved in a large bankruptcy. With a high demand for drivers combined with a large number of new immigrants anxious to establish themselves in their new country, unscrupulous operators are having a field day exploiting and taking unfair advantage to the detriment of the entire industry. Some of these businesses not only skimp on vehicle maintenance, they put untrained, or poorly trained drivers on our public highways and also skew freight rates. It is a travesty that successive Federal governments have not properly addressed this growing problem.

 

[MLCAR]

can you drop the link to the article @loaders ?

 

[TO2022]

can you drop the link to the article @loaders ?

https://www.cbc.ca/news/canada/toronto/truckers-wage-theft-problems-1.7266753

The article mentions Navkin Transport and Fastlane Truckers owned by Hardev Taggar (adding those names here so they appear in future searches)

 

[Jim L]

It is a travesty that successive Federal governments have not properly addressed this growing problem.

Federal governments already have laws in place to thwart this activity. The failure is the lack of enforcement of those rules. Over the last 2 decades the enforcement has diminished to near zero and the trucking industry has grown quite significantly creating this mess.
When I first started in this industry, we were always ready for enforcement. We ensured that equipment was in top working order and that we wouldn't be placed OOS. We worked hard on ensuring all documents were acquired and filed in appropriate files ready for someone to come in. We were audited by the CRA, MTO and a number of provincial entities and always passed with only a few things that needed to be tweaked. We investigated what needed to be done to pass because we heard of those individuals who didn't and the pain it took to get compliant. Back then if you were on one CVOR you couldn't get another. If you bankrupted a company you'd never get another. Now it seems like anyone can do anything.

I continue to stay 100% compliant and right now it's tough to compete with guys who are not paying their drivers or fixing their trucks properly or not paying for their equipment. I hope one day soon the enforcement of all laws will come back in play so that those of us willing to be compliant are rewarded for doing what is right - not rewarding those doing it wrong which is happening right now.

 

[Rob]

I am sorry but not sorry as the guys that are getting screwed brought it on themselves by trying to skirt the rules and now it bit them in the ass. I have had quite a few Indian drivers come through the door looking for a job and they ALL want to be paid as a corporation when you tell them no they leave and go work for one their own Indian companies and get screwed. You asked for it live with it. As Jim stated above if the Government would get off their ass and get on these outfits and driver inc drivers we could send more money to JT for him to give away to Ukraine,,

 

[tasuinam]

I am sorry but not sorry as the guys that are getting screwed brought it on themselves by trying to skirt the rules and now it bit them in the ass. I have had quite a few Indian drivers come through the door looking for a job and they ALL want to be paid as a corporation when you tell them no they leave and go work for one their own Indian companies and get screwed. You asked for it live with it. As Jim stated above if the Government would get off their ass and get on these outfits and driver inc drivers we could send more money to JT for him to give away to Ukraine,,

We have been discussing this here and my solution is 'hire the hacker' ... govt needs to hire a few people who know the loopholes and have used them and get them to enforce .. like that move - Catch me If you Can ...

 

[BPOVFB]

Gov't doesn't care, next one won't either. Why go against your voter base. PP will be the same let's not pretend otherwise. something something small government something something red tape! Open for business!

 

[Freight Broker]

If the drivers are setup as Driver, Inc then likely they have very little recourse. Driver, Inc. is responsible for their payment even if Driver, Inc. can't collect from their "customer" the carrier.

 

[vanspek]

Two weeks ago I spoke to one of these drivers. He freely admitted his people were hurting the trucking industry and doing it to themselves. He explained he has friends that come over, sign on with a company that will sponsor them, usually a 2-3 year contract. They work for peanuts often 10-15% lower than anyone else. In turn, that company offers 10-15% lower on rates. He said it's the shortcut to becoming a permanent resident in Canada so they do it but often can't get out of the rut after the 2/3 years.

 

[MLCAR]

He explained he has friends that come over, sign on with a company that will sponsor them, usually a 2-3 year contract. They work for peanuts often 10-15% lower than anyone else. In turn, that company offers 10-15% lower on rates.

this part isnt anything new however, I remember when there were a ton of haitian drivers literally "imported in" to work for Quebec outfits. There were some that followed the rules and paid fair wages which for an immigrant driver is like winning the lottery. But then came the scummy companies that did the same and some of the stories I heard were nuts, one of the drivers housing accommodations was literally their truck. He lived in his truck, and used the company's facilities and truck stops for everything else. Needless to say this formula is done before we'ev just seen it move over to another ethnicity, and then onto the next one rinse and repeat.

 

[Michael Ludwig]

Actually, it turns out there is a relatively simple solution to the Driver Inc. problem that already fits within the CRA's available auditing staff ... A requirement to issue T4A's. Currently it is recommended that employers issue them, but it is not a requirement.

 

[JN1981]

Actually, it turns out there is a relatively simple solution to the Driver Inc. problem that already fits within the CRA's available auditing staff ... A requirement to issue T4A's. Currently it is recommended that employers issue them, but it is not a requirement.

This is the solution. It not only gives a paper trail on the income that is currently going unreported. It gives the government recourse against the employer if they don't issue and the employee doesn't report and pay. There is currently a campaign from OTA/CTA to push the government into action on this T4A issue. You take away the advantage of not reporting your income and thus not paying taxes, there are no other advantages to Driver Inc and it dies.

CTA - Stop Tax and Labour Abuse

www.stoptaxandlabourabuse.ca

It is working, the government is slowly taking action on T4A despite opposition from other groups.

Reporting fees for service - Canada.ca

www.canada.ca

If you think this is a solution and you want it implemented, contact your MP and let them know!

 

[tasuinam]

This is the solution. It not only gives a paper trail on the income that is currently going unreported. It gives the government recourse against the employer if they don't issue and the employee doesn't report and pay. There is currently a campaign from OTA/CTA to push the government into action on this T4A issue. You take away the advantage of not reporting your income and thus not paying taxes, there are no other advantages to Driver Inc and it dies.

CTA - Stop Tax and Labour Abuse

www.stoptaxandlabourabuse.ca

It is working, the government is slowly taking action on T4A despite opposition from other groups.

Reporting fees for service - Canada.ca

www.canada.ca

If you think this is a solution and you want it implemented, contact your MP and let them know!

problem with this is - per my accountant who also works with some driver inc.
The company pays them a min amount - eg. $36K and that's on the T4A - the driver inc. files taxtes based on this - mostly written off due to meals etc...

The rest of the money is paid by eft direct to the personal account as 'misc' expenses - and justified by maintenance receipts...

Advantage to trucking company - almost 70% less in source deductions
Advantage to Driver Inc. - no taxes still - but on paper legit

Only way to get everyone legit is hire the crooks to police the industry

 

[Michael Ludwig]

problem with this is - per my accountant who also works with some driver inc.
The company pays them a min amount - eg. $36K and that's on the T4A - the driver inc. files taxtes based on this - mostly written off due to meals etc...

The rest of the money is paid by eft direct to the personal account as 'misc' expenses - and justified by maintenance receipts...

Advantage to trucking company - almost 70% less in source deductions
Advantage to Driver Inc. - no taxes still - but on paper legit

Only way to get everyone legit is hire the crooks to police the industry

Enforcement has to start somewhere, and although it's not a perfect solution, it is a start.

 

[Jim L]

I'm not a big fan of more bureaucracy and making the operators who do everything right do more. Issuing T4As will be another headache that we will have to deal with.

Take for example a blown tire on the side of the road. I may use a guy I find on the internet and replace a blown tire. Now I just send the payment - everyone is happy and my driver is on the way. If the T4A system comes in place I have to ensure I get addresses so I can send a T4A later. And what happens if I spell the name wrong or didn't get the legal name. What a mess.

Nope! The CRA can do their enforcement. Have them come and check my reported expenses on by tax returns to my invoices that I have on file. If I don't have an invoice, then make me adjust my tax return to have those missing invoices removed which will in turn make me pay the taxes for it. If I have 10K of expenses I should have 10K of invoices. A little more enforcement would ensure that the accountant is reporting it under the correct GIFI code which will further define where people are trying to hide expenses - for example, putting Driver Inc under fuel. Then with the information gleaned from my audit go and check a company that we have done business with to see if the invoices match.

More enforcement will ensure that the flow of information is proper as well. I spoke to one Driver Inc who told me he doesn't supply invoices or confirms the amounts owed by signing a prepared document. The money just shows up in his account. That is not how business to business (B2B) is supposed to work. Customers never choose how much money they're going to pay to a vendor - why does this happen in the trucking industry?

Finally, if they move ahead with a T4A requirement, they will need to enforce that too. They don't do enough enforcement as it is. The crooks getting away with the process now will continue to get away with it and find ways to thwart any new process they throw at it.

More enforcement and more audits are the way to go - not more bureaucracy and expecting lawful abiding companies to do more work. The systems are there and in place but not checked. Start with enforcing the current systems before trying to amend them.

 

[YYZRIDER]

problem with this is - per my accountant who also works with some driver inc.
The company pays them a min amount - eg. $36K and that's on the T4A - the driver inc. files taxtes based on this - mostly written off due to meals etc...

The rest of the money is paid by eft direct to the personal account as 'misc' expenses - and justified by maintenance receipts...

Advantage to trucking company - almost 70% less in source deductions
Advantage to Driver Inc. - no taxes still - but on paper legit

Only way to get everyone legit is hire the crooks to police the industry

Paying to any Personal account from Business account without an Invoice is a red flag, Any transactions out of business must have proofs backed up. It may look easier now but once this gets caught then you are in a deep trouble. T4a is safest for employer right now, liabilities are off your back. Right the now issue what I see is. Income Generated is not being reported so less tax income for government.

 

[JN1981]

I'm not a big fan of more bureaucracy and making the operators who do everything right do more. Issuing T4As will be another headache that we will have to deal with.

Take for example a blown tire on the side of the road. I may use a guy I find on the internet and replace a blown tire. Now I just send the payment - everyone is happy and my driver is on the way. If the T4A system comes in place I have to ensure I get addresses so I can send a T4A later. And what happens if I spell the name wrong or didn't get the legal name. What a mess.

Nope! The CRA can do their enforcement. Have them come and check my reported expenses on by tax returns to my invoices that I have on file. If I don't have an invoice, then make me adjust my tax return to have those missing invoices removed which will in turn make me pay the taxes for it. If I have 10K of expenses I should have 10K of invoices. A little more enforcement would ensure that the accountant is reporting it under the correct GIFI code which will further define where people are trying to hide expenses - for example, putting Driver Inc under fuel. Then with the information gleaned from my audit go and check a company that we have done business with to see if the invoices match.

More enforcement will ensure that the flow of information is proper as well. I spoke to one Driver Inc who told me he doesn't supply invoices or confirms the amounts owed by signing a prepared document. The money just shows up in his account. That is not how business to business (B2B) is supposed to work. Customers never choose how much money they're going to pay to a vendor - why does this happen in the trucking industry?

Finally, if they move ahead with a T4A requirement, they will need to enforce that too. They don't do enough enforcement as it is. The crooks getting away with the process now will continue to get away with it and find ways to thwart any new process they throw at it.

More enforcement and more audits are the way to go - not more bureaucracy and expecting lawful abiding companies to do more work. The systems are there and in place but not checked. Start with enforcing the current systems before trying to amend them.

The current threshold for T4A is $500, anyone you pay more than $500 would need a T4A. This is burdensome for the one off repair on the side of the road. But if it’s going to be a tool to combat the underground economy and Driver Inc. raise the threshold to $15000 or $25000. That will capture any Driver Inc driver and eliminate the requirement for the small suppliers. Any supplier you are paying that much to, you will have all their address and contact info wouldn’t be a problem to issue the T4A. Even the most basic accounting packages have a fairly easy to use T4A function (QuickBooks for example)

 

[artmax]

Only way to get everyone legit is hire the crooks to police the industry

home sweet home Moldova

 

[Jim L]

The current threshold for T4A is $500, anyone you pay more than $500 would need a T4A. This is burdensome for the one off repair on the side of the road. But if it’s going to be a tool to combat the underground economy and Driver Inc. raise the threshold to $15000 or $25000. That will capture any Driver Inc driver and eliminate the requirement for the small suppliers. Any supplier you are paying that much to, you will have all their address and contact info wouldn’t be a problem to issue the T4A. Even the most basic accounting packages have a fairly easy to use T4A function (QuickBooks for example)

I get it, it can be done, and if necessary and forced to do it I will comply because that is the kind of company that I run.
My issue is that it is more work for guys that comply with the rules. This tool only works if there is more enforcement. Those who currently skirt the systems in place will also do the same for this process and make it pointless. Those carriers will just increase their T4A amount to their fuel supplier or their repair facility to cover the amount for the ones they don't want to remit for. If you raise the threshold amounts a smart Driver Inc guy will just have 12 companies - one for each month and stay under the threshold. It will be a cold, cold day if someone ever catches those scenarios and that is just a 15 second quick example that I can come up with.
The real issue is a lack of enforcement. The systems are in place to deal with the underground economy, but it requires someone to decide what enforcement to focus on. Currently the powers to be do not believe that it is worth the work. The OTA and the CTA need to show the government how much they're losing in tax dollars by allowing these underground systems to work.
The solution is simple. Take any carrier, even take mine, and look at their total expenses reported on their TL2 GIFI schedule. Ensure that for each GIFI code that there are valid and corresponding invoices to sum up to that number. This process will identify any invoices that are in the wrong GIFI code and ensure that the numbers are not made up. Very quickly you should be able to identify individuals and small companies that were paid money for something. Audit those companies that are in the first audits invoice list and ensure that they reported the income properly.