The IRS recently reminded motor carriers using owner-operators to include fuel surcharge payments in the Form 1099 report of compensation paid to the owner-operator. Correspondingly, the IRS urged owner-operators to confirm with the motor carriers that the compensation being reported in Form 1099 includes the fuel charge and to include any non-reported fuel surcharges in the income reported on their returns. Additional information is available at http://www.irs.gov/businesses/small/article/.
Wage and Hour Class Actions - Not Just For Drivers Anymore
Thursday, March 11, 2010 by
Transportation Lawyer
The recent request filed by attorneys for DHL Express and a class of its employees to approve a $740,000 settlement in Hom v. DHL Express (USA) Inc., an overtime class action, serves as a reminder to carriers that truck drivers are not the only instigators of wage and hour class actions. The past several years have seen a flood of wage and hour class action lawsuits filed by employee and owner-operator truck drivers against motor carriers. While this trend is expected to continue, the DHL settlement shows that carriers can be on the receiving end of class action claims filed by non-driving workers also. In Hom, the plaintiffs were DHL field supervisors who managed various hourly employees, including courier drivers, dockworkers, and agents. The supervisors were classified as exempt from overtime as executives but challenged this designation, claiming that they did not qualify for the executive exemption and were therefore entitled to overtime pay. DHL maintained that the designation of the supervisors as executives was appropriate given the nature of the supervisors’ work. The court is expected to approve the parties’ settlement. Carriers, who have been watching their backs as more and more driver-initiated wage and hour class actions are filed, should be on the lookout for, and take steps to avoid, claims by non-driving personnel.
9th Circuit Issues Ruling in ATA Port Litigation
Friday, February 26, 2010 by
Transportation Lawyer
On Wednesday, February 24th, the Ninth Circuit issued an opinion declining to direct the District Court to issue an injunction against 8 aspects of the Port of Los Angeles concession agreement implemented as part of its Clean Truck Program. The expansion of the previously issued injunction was requested by the American Trucking Associations and challenged those elements of the concession agreement not previously enjoined by the District Court; it did not challenge those aspects of the Clean Truck Program that are intended to improve air quality. This Ninth Circuit opinion did not involve the previously issued injunction that prohibits the Port of Los Angeles from enforcing an owner-operator ban, meaning that Los Angeles remains prohibited from enforcing the owner-operator ban. This most recent decision does vacate the District Court order which had allowed enforcement of a placarding requirement that was contained in the concession agreement, but otherwise, the ruling had little impact on drayage operations at the port. The District Court conducted its hearing on the parties’ summary judgment motions on Thursday, February 25th, and an order on those motions is expected shortly. In is anticipated, however, that the order will preserve most issues for trial on the merits which is set to commence April 20th.
Broker Group Proposes Increase to Bond Requirement
Friday, February 12, 2010 by
Transportation Lawyer
Trucking (common carrier ) groups have recently pushed Congress to impose tougher financial rules on transportation brokers. In order to appease groups like the Owner-Operator Independent Drivers Association who want to require brokers open their financial records to scrutiny so that companies using the brokers can determine their financial health, the Transportation Intermediaries Association (“TIA”) is proposing that the freight broker regulations increase the bond requirement from $10,000 to $100,000. In addition, TIA seeks tougher overall regulations for bonding companies, including the way they collect/pay out claims. TIA has taken its plan to Rep. Peter DeFazio, D-Ore., chairman of the House Highways and Transit Subcommittee, along with a request that the bonding process be more tightly regulated, - from the way funds are posted through bonding companies to the way payments are actually made. They also want the regulations to clarify that motor carriers cannot broker freight to other carriers without themselves posting the $100,000 bond.
2011 Administration Budget Targets Misclassification
Wednesday, February 3, 2010 by
Transportation Lawyer
The fiscal year 2011 budget continues President Obama's efforts to target alleged employer misclassification of employees as independent contractors by characterizing misclassification as an issue that has a budgetary impact as a result of decreased tax collections. As part of the budget, the Departments of Treasury and Labor are pursuing a joint proposal to enhance the ability of both agencies to penalize employers who misclassify, eliminates legal incentives for employers to misclassify, and restores employee protections lost due to alleged misclassification. The budget also includes an additional $25 million for the Department of Labor to hire additional enforcement personnel and to encourage state action regarding the issue.
In addition to the budget proposals, two bills are pending in Congress that would seek to limit misclassification by changing the application of the IRS Section 530 safe harbor provisions and making it more difficult to establish a reasonable justification for using independent contractors. It remains to be seen what impact these proposals will have on the well established use of owner-operators in the trucking industry.
In addition to the budget proposals, two bills are pending in Congress that would seek to limit misclassification by changing the application of the IRS Section 530 safe harbor provisions and making it more difficult to establish a reasonable justification for using independent contractors. It remains to be seen what impact these proposals will have on the well established use of owner-operators in the trucking industry.
FMCSA Announces Meeting and Other Plans on New Hours of Service Regulations
Tuesday, December 1, 2009 by
Transportation Lawyer
The FMCSA has announced that its Motor Carrier Safety Advisory Committee (MCSAC) will hold a committee meeting via conference call on December 7, 2009. The conference call is open to the public, and the FMCSA is seeking participation by “safety advocacy groups, State safety agencies, motor carriers, motor carrier associations, owner-operators, drivers, and labor unions.”
The MCSAC will be requested to provide advice and recommendations on the hours of service requirements for drivers of property-carrying vehicles following the FMCSA settlement agreement with the group Public Citizen and others. That agreement requires the FMCSA to submit a Proposed Rule within 9 months, and publish a Final Rule within 21 months, after the October 26, 2009 settlement date. The FMCSA said other steps will include public listening sessions across the country and the opportunity for public comment on the forthcoming proposed rule.
The deadline for written comments on this topic is December 3, 2009. For more information, see Motor Carrier Safety Advisory Committee Public Meeting, 74 Fed. Reg. 62882 (Dec. 1, 2009).
Succession planning
Friday, November 20, 2009 by
Transportation Lawyer
A good first step in succession planning for any size business is evaluating the usefulness of a power of attorney in the operation of your company. Who will sign checks? Who can deal with other banking, regulatory or legal issues? For many small single-owner businesses, the owner’s inability to attend to the day-to-day mechanics of running the company can be satisfied with the execution of a power of attorney naming a trusted employee or family member. In larger companies, where equity ownership includes multiple persons, it isn’t necessarily the day-to-day operations that present problems. However, both the company and other equity owners will need assurance they can deal with a legally appointed personal representative, and the existence of a power of attorney can eliminate the need for a court proceeding.
The time is now to consider these issues – unique to every business – and plan ahead.
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