Driver Inc. truckers can’t have their cake and eat it too
“Stop wage theft!” “I am owed $10,000!” “Enforce payment orders!” “End misidentification!”
Another weekend brought another protest to Ontario’s trucking heartland – Brampton. The placards have become a familiar sight and so have the numerous wage theft protests by truck drivers.
Digging deeper into the issue it becomes clear the situation is complicated. Like an onion, there are layers. And as they are peeled, eyes will sting.
These unpaid truckers claim carriers are misclassifying them as independent contractors when they are really employees.
In a recent letter to federal lawmakers, they called for an increase in proactive enforcement and penalties for companies that misclassify workers as independent contractors by using the Driver Inc. model.
But hold on a minute.
I chatted with some of the drivers protesting wage theft during a recent protest. All of them were incorporated. Some admitted they chose Driver Inc. because their earnings would be higher.
Keep that in mind.
Fleet recruitment officials I have spoken with over the years have said that many truckers refuse to work as company drivers. They actively seek employment only at carriers that follow the Driver Inc. model.
Writing off business expenses
Why? Because these drivers take home more money and write off business expenses for tax purposes.
For example, the latest leased luxury vehicle that is replaced every three years. Fuel purchases for the four-wheeler and meals at restaurants become business expenses. Or a family member who is paid a salary for being a “vice-president” or “director” of the incorporated company. Creative accounting gets into high gear.
Carriers can pay these incorporated drivers at a more competitive rate because there are no source deductions such as WCB, overtime, vacation pay, or other costs. The carriers can bid for freight at lower rates placing them at a competitive advantage.
Compelled to incorporate
Other drivers I spoke to claimed they were compelled by carriers to choose the incorporated model. This could be the case if the driver is joined at the hip to the company due to a work permit.
“Truck drivers, particularly those hired under the Temporary Foreign Worker program, face significant abuses,” the letter to 40 members of parliament states. And yes, this has been happening.
It seems to boil down to the fact that the drivers did not complain as long as they were reaping the benefits of the Driver Inc. model.
Burden on taxpayers
Now that the shoe is on the other foot, they are demanding action from the federal government. What about their tax obligations? Lawmakers might be more sympathetic if taxes were not skirted.
Why should trucking companies that follow the rules operate at a disadvantage? Why should Canadian taxpayers bear the burden when these drivers and their dependants access our universal health care, free education system and welfare programs?
Workers must be paid and company owners who disregard the rules must not go unpunished. The drivers have families to feed and mortgages and loans to pay.
They have my sympathy, but not my respect. They can’t have their cake and eat it too.
Have your say
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Well said we need to not allow any company to have any foreign T F Ws or get gov truck insurance in certain parts of Canada if the drivers are not get paid ( if not being paid on payroll) at least 75% of the gross have their truck pay their own insurance directly or by deduction own fuel and repairs and own tolls in my opinion. I have no problem with a farmer or a contractor have owner ops pulling company or farmer owned trailers if it is seasonal and they are only allowed the same deduction as a over the driver for light vehicle I think the Trucking industry is missing a chance to work with non profits that provide services to driver inc when get sick or injury to change the industry.
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Driver INC is illegal.
been going on since forever. not just brampton either prominent companies have skirted the employee model. bot driving and with the temp agency model.
if wages were better i doubt this would be a thing in trucking . it is also the biggest wage gap in all industries . one driver could be getting 15 per hour while another 25 per hour
essentially tho the new drivers depending on status as canadian citizens are working afraid of having to go back so they dont complain. these new companies burn the drivers any way they can no pay to drivers owing money
taking trucks away from so called lease operators that dont perform high mileages. the system is broken .
Right on – these incorporated drivers will do anything not to pay taxes. Their demands that governments owe them money or assistance is unfounded.
I have been telling this side of the story for years. When I was a recruiter for a very large Canadian carrier, almost all immigrant applicants would ask if we would pay their corporation. Of course we did not, and they were not hired. The CRA should audit everyone one of these drivers claiming they are owed money as well as the companies they work for. That news will spread like wildfire and force at least some change. No sympathy here. It’s self inflicted.
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Agreed, I work for a great company.
If a driver has started a corporation and becomes a contract driver what is the big deal? There are subcontractors in any other trade why should trucking be different? The political wing nuts do their best to skirt taxes and frankly our whole tax system turns everyone into a criminal as we all try to keep more of the pennies we earn, why should contract truck drivers be different? Yes if a company is abusing the worker and the worker isn’t acting as a good contractor paying his bills then they should be held accountable. But if the driving contractor operates his business like a corporation and pays all wcb, insurance and business taxes why is it such a big deal?
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This is a big deal because it puts all trucking at risk. It drives wages down, it pushes freight rate lower and it causes many companies to go out of business. Many of these Drivers are not paying taxes, the don’t get the security of EI or WCB and most companies that do Driver inc model end up owing Drivers money.
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Your right its not a big deal. I was a owner opperator for a long time. Essentially the driver inc model but I paid everything above board. So if they are getting screwed and not paying its on them.
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Unfortunately the Cinderella scenario you describe is not indicative of the majority of TFW/Driver Inc. business models.
It’s far more likely to represent ‘operators’ skirting laws and regulations, avoiding insurance & tax obligations, declining necessary maintenance and in some cases driving without a commercial driver’s license!
All so the rest of us can take up the slack & pay more.
I can think of another well known company based out of southern lake erie produce area that has been getting away with phoney lease to own non sense for years, just another name for driver inc. They have bankrupted drivers for as long as I can remember. This practice needs to be stopped by revenue Canada.
The problem with tank Kelly’s theory is the fact that lot’s of these drivers aren’t paying WSIB, and in many situations aren’t even paying their taxes. All the while others are charging HST and not remitting what they owe on that side of the ledger. The contractor model puts the responsibility on the driver so enjoy your independence you’re on your own
“It seems to boil down to the fact that the drivers did not complain as long as they were reaping the benefits of the Driver Inc. model.” Another glaring example of privatizing winnings and socializing losses.
Thank you, Leo Burros, your courageous leadership is defending our industry by calling out this egregious abuse.
Driver Inc. is raising costs for good industry practitioners, those performing a valuable service, contributing to safer roads and most importantly, paying a fair share!
In fact, these drivers who incorporate in order to have write-off benefits, actually don’t have those legitimate write-offs. Assuming these drivers are tied only to one customer, they are really a Personal Service Business (PSB). PSBs are not entitled to business write-offs, however, many either unknowingly or unwillingly subscribe to this business arrangement after being encouraged of these “advantages” by the Driver Inc. companies. Of course, there are likely also those who know all-to-well what they are doing and who are knowingly taking business write-offs illegally.
Either way, Driver Inc. companies are commonly taking advantage of unsophisticated or uninformed/misinformed drivers and competing against legitimate, law-abiding and tax and wage-paying trucking companies at a huge competitive advantage. The complexity exists because it is not illegal to be a PSB.
No matter the circumstances, Driver Inc. companies taking advantage of drivers, including drivers they hold extra leverage over under a Temporary Foreign Worker, must be stopped and held accountable for unpaid wages, benefits and taxes. Drivers who are taking illegitimate write-offs under their PSBs must also be held accountable.
Do you want Job Security guaranteed by Ontario Labour Regulations??
Stay on Payroll.
Problem Solved.
When they do not pay you, you send them an official letter/email or whatever.
For 90 days, if you do not get paid, you call the Ministry of Labour of Ontario.
Being a Subcontractor, you have ZERO protection because you are in a Business-to-business relationship.
The Truth is brutal to hear, but that’s how it is.
Interesting article, but lacks clarity on the real issues, I’m retiring from the industry because of those issues .
Firstly the issue with being a contract driver is that it makes it easier to not pay you if you don’t play ball, not all but a large number want you contractor because they can push breaking rules/laws, all liability is on the driver and if you quit and they can not easily replace you they make up excuses and don’t pay , leaving them in a had situation, this also brings up the issue of using foreign workers to keep the rates down. You state a burden on tax payers to enforce laws in trucking, what about the burden of only seeing your family a few days a month? Or all the unpaid waiting time away from home due to shipper/receivers lack of desire to be efficient, what about the stress of being the first person fined if something is not up to standard even if not truckers fault,
Are. You fined if you make a mistake.
There is NO reason for foreign worker program to be in trucking , it’s not seasonal except for farm work ,
So if we are going down this road let’s bring out the white elephant, society wants trucking rates low so that masses can have cheap shipping and company’s can make huge profits, not pay overtime even if employees as trucking OT hours are different then everyone elses .
The lack of enforcement of companies and maximum enforcement to drivers is what is the problem, and why the good truckers have left and can’t be replaced.
Thanks
They played the game and lost…looks good on all of them.. they cheated and now they’re the losers..
Those guys should not get a free ride I pay taxes and deductions am a company driver
It’s unreal that the driver inc. scam has been allowed to continue as long as it has, you have to ask yourself –why?
If this was anyone else cheating on their taxes by playing with their eligible deductions, the CRA would bring the hammer down – no questions asked!
I guess the the real question here is, has anyone at truck news thought about blaming private fleets?
100% agree! Well written.
I think that there is lots of blame to go around. Our government which chooses votes over law. Carriers who use this model to create an unfair pricing advantage. Drivers who don’t contribute their fair share to our tax system and put the burden on tax paying citizens and let’s not forget shippers who also turn a blind eye to carriers with rates that are knowingly low, and not sustainable, in turn putting unreasonable pressures on those whom do it right!
40 years ago drivers were paid 25 cents per mile, at a measly 3% increase per year that should mean today’s wages should be 82 cents per mile. Yet we have TFW’s working for 28 cents. We don’t have a driver shortage, we have a shortage of drivers willing to work for crappy wages. Stop the TFW program and start paying drivers a respectable wage.
I have no sympathy for those who willingly chose this pay method. There MUST be accountability for your choices. The carriers should be audited, fined and shut down. If the carriers are willing to skirt the labour laws, any bets they are skirting operating laws, including SAFETY!! Do we really want them operating trucks beside our families?