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How the PRO Act Could Affect Owner/Operators

In early February, Democrats in both the House and Senate reintroduced the Protecting the Right to Organize (PRO) Act, an ambitious pro-employee and pro-union bill that could dramatically impact the trucking industry.

In what has been called the most “significant [piece of] labor reform” in the United States since the end of World War II, the PRO Act would, among other provisions, increase the number and size of fines against organizations that violate workers’ rights, give employees more power to strike, weaken right-to-work laws, and offer independent contractors increased protections.

The PRO Act passed the House in 2020 but did not receive a vote in the Senate. While this year’s version is expected to again find success in the House, it is unlikely to get the 60 votes needed to acquire a vote in the Senate. Even though it may not immediately become law in its current form, the PRO Act illustrates the Democratic Party’s renewed emphasis on labor issues.

What Impact Would the PRO Act Have on Truckers?

The Owner-Operator Independent Drivers Association has come out strongly against the PRO Act, arguing that it would force trucking companies to abandon the traditional owner/operator model. The bill, if passed, would implement what is known as the ABC test, which was expanded and codified in California under state law AB5.

The test requires all workers be considered employees of a company unless three factors are established:

  1. That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact.
  2. That the worker performs work that is outside the usual course of the hiring entity’s business.
  3. That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

At odds for owner/operators is section B as they perform the same service as the companies hiring them. OOIDA argues that this broad classification has been created to determine if independent contractors should be classified as employees for the sake of unionization. This law could make it so trucking companies could not hire owner/operators at all.

Looking for a Safe Middle Ground

The trucking industry has fought back against California’s bill, similar state bills in places like New Jersey, New York, Washington State, as well as federal action. Advocacy groups argue that the ABC test unfairly classifies owner/operators who exist in a more nebulous middle ground. While these laws primarily focus on gig economy workers, looking to provide additional workplace rights for independent contractors at companies like Uber and Lyft, they would also impact truckers who operate under a completely different business model.

The California Trucking Association has brought temporary relief, winning an injunction in U.S. District Court in January of 2020—just days after AB5 was enacted—to momentarily stop enforcement of the new California law. The CTA argues that the Federal Aviation Administration Authorization Act prohibits states from passing laws “related to price, route, or service of any motor carrier” and would preempt all state laws.

The organization also argues that the California test would impose a significant burden on interstate commerce as an owner/operator theoretically would not be able to drive through California under this ruling, or any other states that pass similar legislation. This would be in addition to other challenges recently put on truckers and the trucking industry.

What is the Current State of Things?

The injunction has put a momentary hold on the law’s enforcement and is awaiting an appeal in the federal 9th Circuit Court of Appeals. While federal passage of the PRO Act still appears a long shot, these state laws, and in particular the CTA’s appeal, will provide insight into how the legal system views the owner/operator system and how it fits into larger labor disputes.

Numerous groups, including the U.S. Chamber of Commerce, the International Foodservice Distributors Association, and Teamsters General have voiced opposition as well. While not mentioning truckers specifically, these organizations argue the PRO Act could hurt job growth, limit self-employment, and serves and overly empowers unions that do not work in the best interest of workers.

Buying vs. Leasing a Semi-Truck: An Owner Operator’s Guide

Owner/operators are in the position to make important business decisions that impact their future success. Your semi-truck can either be the means to your financial gains or a detriment—which direction you go depends on the choices you make around your truck. When it comes to buying versus leasing, there’s not a clear-cut answer. Your unique situation and goals play a large part in your decision to buy or lease a semi-truck. Ultimately, it comes down to the type of truck you want and how you prefer to spend your money. 

Buying a Semi-Truck as an Owner/Operator

The average price of a new or newer truck is well over $100,000. Do you have the capital to make this purchase? If not, take a look at financing. Either way, you’ll start to accrue equity. The purchase can also be used as a tax write-off; talk to an accountant or tax professional before you make the purchase to understand all the tax considerations. Additionally, you’ll save money on insurance as rates are often cheaper than those for leased vehicles. If you have good credit and the truck is not terribly expensive, you may not have to make a down payment, depending on the company issuing the loan.  

With a new truck, you’ll also get the latest in mechanical technology. This may mean saving money on operating costs and fuel, as many are more energy-efficient than older models. It’ll also come with a factory warranty which covers service issues and any problems that come up during the warranty period. 

If you want to purchase, but a $100,000-plus price tag is outside of your investment range, you can buy a used truck for as low as $15,000. Keep in mind that you may end up paying to keep it up and running. 

Leasing a Semi-Truck as an Owner/Operator


If you’re not able to buy your truck or you want to limit your financial risks, leasing may be the best option. A lease contract usually lasts anywhere from three to five years. Once your agreement is over, you’ll return the truck, and you can start another lease on a new truck. If you choose to break your lease before it ends, you’ll pay a penalty; the amount of the penalty is a lump sign that’s stated in the contract. 

Make sure you read the fine print on your lease agreement. Often, there are rules and requirements you must follow while you have the truck. Like a personal vehicle, you may have a limit on your mileage. When you turn the truck in at the end of the lease, you’ll have to pay for each mile you go over it. 

Lease Types

There are two types of lease: conventional or lease-to-own. With either, you don’t need to put down a large amount of money upfront. Oftentimes, you don’t need good credit; some leases don’t even require a credit check.  

A conventional lease has a set period of time in which you make monthly payments. You’ll have the freedom to walk away from your truck when your contract is over. Another benefit is gaining insight into the real-life costs of owning a truck without some of the hassles. Many conventional leases come with a servicing agreement for any maintenance or service needs that the vehicle needs during the extent of the contract. 

A lease-to-own agreement means you have the option to purchase the semi-truck at the end of the agreement. There will be a buy-out price set in the contract which may be negotiated before you sign the lease. With this type of lease, you’ll need to haul enough merchandise or goods to pay the monthly payment. If you don’t, the leasing company can repossess your truck.

What Should I do?

Commitment is the biggest difference between the two options to purchase or lease a semi-truck. A conventional lease can be a short-term commitment that may provide the freedom to walk away from your truck. Though you’ll spend less money upfront, you won’t build any equity. Overall, you may pay more money than if you were to buy it outright. Insurance is typically higher on a leased semi-truck than one that you’ve purchased. You also can’t make it your own by modifying or updating it the way you would if you owned it. 

Buying or leasing a semi-truck is ultimately a financial endeavor. But it doesn’t end there; it also comes down to your goals and long-term vision for yourself as an owner/operator.

Looking Ahead: The Possible Changes in 2021 Resting Hour Requirements

It’s looking like 2021 could be a year of significant change for the trucking industry. New presidential leadership, advancements in technology, and a shortage of drivers create a unique landscape conducive to exciting industry updates. The start of these changes began in early January, when the Federal Motor Carrier Safety Administration launched a pilot program to study the impact of new updates to long-haul driver resting hour requirements. Not sure what this means for you as an owner/operator? Find out below.

What is a Sleeper Berth?

For drivers who are new to the industry, “sleeper berth” refers to the amount of time a driver must be off-duty or not driving within a specific work period. Simply put, sleeper berths are the mandatory daily rest periods for long-haul drivers. Currently, truckers can drive for 11 consecutive hours during a 14-hour working period. Once drivers have reached their 14-hour working limit, they are required to take a mandatory 10-hour break. To increase flexibility, the Federal Motor Carrier Safety Administration (FMCSA) allows drivers to break up their sleeper berths into two parts, providing drivers with various options for scheduling their required rest breaks:

  • 10-Hour Sleeper Berth: Following 14 consecutive hours working, drivers must have a 10-hour rest period.
  • 8/2 Sleeper Berth Split: Drivers can rest for eight hours during a 14-hour working shift and two additional hours at the end of the shift for a cumulative total of 10 resting hours. 
  • 7/3 Sleeper Berth Split: Drivers can rest for seven hours during a 14-hour working shift and three additional hours at the end of the shift for a cumulative total of 10 resting hours. 

The added flexibility gives drivers the ability to better plan and schedule their time on the road to meet their individual needs. 

Proposed Changes to Rest Requirements

The FMCSA recently proposed a pilot program to study the impact of new sleeper berth scheduling. The proposal will allow drivers to split their resting periods up, requiring both rest periods to be a minimum of four hours long. This means drivers will have the ability to break their resting hours up into either 6/4 or 5/5 split segments. Former Deputy Administrator of the FMCSA Wiley Deck stated the proposed pilot program is designed “to explore ways to provide flexibility for drivers while maintaining safety on our roadways.” 

Not everyone is on board with the proposed changes, though. The Advocates for Highway and Auto Safety expressed concern that reducing the mandatory number of consecutive rest hours would lead to increased driver fatigue. Cathy Chase, president of the advocacy group, asserted the pilot program is a “continuous effort to cripple minimal safety measures [and] is antithetical to FMCSA’s mission of implementing countermeasures that will reduce truck crashes and fatalities.” The FMCSA disputes this idea, citing research that suggests “the total amount of sleep in a 24-hour period is more important than accumulating sleep in just one period for mitigating fatigue.”

Benefits of Breaking Up Rest Periods

While the industry may be divided on split sleeper berths, the ability for long-haul truckers to break up their mandatory resting period provides many benefits. Drivers can avoid wasting valuable driving time and paid working hours by using a sleeper berth break during long delays at shipping and receiving locations. During inclement weather, long-haul drivers can pull into a safe location and use part of their rest period to wait for safer driving conditions. Drivers can also use the split to circumvent peak traffic hours, avoiding sitting in traffic or creating traffic in already congested areas. 

One of the most beneficial aspects of the proposed sleeper berth split is drivers can use the splits to plan out safer routes. For example, if a driver’s receiving destination is 10 hours away but a preferred rest stop is six hours into their route, they can plan their journey using one of their sleeper berths to stop at their preferred location. Under existing regulations, the driver would have to either stop eight hours into their route in an unfamiliar location or push through the fatigue for two more hours to reach their destination. 

Changes in sleeper berth schedules are certain to have an impact on the trucking industry. Although the long-term effects of splitting mandatory rest periods have yet to be fully studied, proponents of the FMCSA pilot program believe the increased flexibility and control over driving schedules can be incredibly beneficial for long-haul drivers. Make sure to check back here for updates on the results of the pilot program and the future expectations of sleeper berth regulations.

Are Truckers Included in the Third Vaccination Group?

covid 19 vaccine

We have officially passed the grim one-year mark since the first COVID-19 case was diagnosed in the United States. Since then, the trucking industry faced massive unemployment for a period of time and now faces a shortage of drivers due to several pandemic-related factors. With the global health crisis still in full-force, long-haul drivers must still be vigilant about protecting their health while on the road. The good news is, the United States is currently distributing multiple vaccines, meaning the country is on its way to returning to some semblance of normalcy. But when will long-haul truck drivers be eligible to receive the vaccine?

What are the Vaccination Phases?

The Advisory Committee of Immunization Practices (ACIP) and the Centers for Disease Control and Prevention (CDC) established a recommended vaccination schedule detailing when specific population segments should be vaccinated. The proposed vaccination schedule was designed to find a balance between prevention of morbidity and mortality and preservation of societal functioning—in other words, preventing as many unnecessary deaths as possible while protecting the economy. 

The first round of vaccinations has been broken up into three phases:

  • Phase 1a – Includes residents of long-term care facilities and healthcare personnel
  • Phase 1b – Includes persons 75 years of age or older and frontline essential workers
  • Phase 1c – Includes persons 65-74 years of age, persons 16-64 years of age with high-risk medical conditions, and other essential workers 

You may be asking yourself, “Where do truckers fit into this plan?” That’s a great question. Since early December, the American Trucking Association (ATA) has been pushing the federal government to include truckers in phase 1b as frontline essential workers due to the massive role truckers play in the distribution of vaccines. Originally, transportation industry workers were included in Phase 1b because of the risks posed to the health of unvaccinated truckers while on the road. The CDC has since updated its vaccination plan, moving the transportation and logistics sector to Phase 1c. 

States Control Vaccine Distribution

Here’s where things get tricky. Neither the CDC nor ACIP has the power to enforce who receives a vaccine in each phase or the vaccination schedule; these decisions are ultimately left up to the discretion of state governments. According to data from the Kaiser Family Foundation (KFF), only 33 states have adjusted their Phase 1c groups to reflect CDC and ACIP updates; of these states, only 17 follow ACIP recommendations. Many states have expanded the age range compared to the recommendations while some states have implemented even stricter requirements for the essential worker designation. 

Further complicating the issue is the fact that states are moving at very different paces to try and vaccinate all of their residents. The majority of states are in Phase 1a of the vaccination process while 10 states and the District of Columbia have moved on to Phase 1b. Very few states, like Michigan, have begun Phase 1c of vaccination. Stay up to date on Phase 1 vaccination roll-out by checking with your state and local governments for their specific vaccination schedule. 

Some Drivers Need the Vaccine More Than Others

Even within the transportation industry, there are specific groups of truckers who face a much higher risk of infection than others. For example, package delivery drivers often interact with the general public in their day-to-day routine, making it important for them to get vaccinated as soon as possible.

What about long-haul truck drivers? While they may not have as much public interaction as delivery drivers, truckers do face an increased risk of infection while on the road. The average long-haul driver spends 300 days each year on the road. That means for 300 days, truckers use public facilities for bathrooms and showers, eat at public restaurants, and interact with officials at truck stops and weigh stations. The ATA has tried multiple times to get long-haul drivers designated as Phase 1b frontline essential workers, noting that more than 80% of U.S. communities rely exclusively on trucks to receive necessary goods. 

As previously stated, individual states have the ability to make their own vaccination schedule, depending on their needs. For example, both Georgia and Massachusetts expanded their Phase 1b to cover all essential workers, long-haul drivers included. Navigate to your state’s website to find more information on its vaccination roll-out schedule.

How Owner/Operators Can Prepare for Tax Season

After a very long year, the 2021 tax season is upon us. As an owner/operator, properly filing your tax return is crucial to the success of your operation. Navigating the increasingly complex tax code can be arduous, though. Multiple deadlines, numerous deductions, and various available exemptions and credits… filing your taxes can feel nigh on impossible. Those in the industry, however, know preparation is key. Plan ahead to ensure you have all the necessary documentation you need to properly file your taxes by the expected deadlines. 

Here’s how owner/operators can prepare for the 2021 tax season.

Which Tax Forms Do Owner/Operators Need?

Let’s begin by answering the most basic question: Which tax forms am I expected to file? This depends entirely on your specific employment status—are you an employee of a trucking company, an independent contractor, or an owner/operator?

If you are employed as a driver for a carrier company or similar, you should receive a standard W-2 form for filing your taxes. The W-2 details the amount of wages you were paid during the previous fiscal year of employment. This form is the most straightforward filing procedure since there are no job-related expenses. 

If you are an independent contractor or owner/operator, however, you will receive two tax filing forms: a 1099-MISC and a 1099-NEC. What’s the difference between the two? The 1099-MISC is an information return form (similar to a W-2) used to report payments made from a business to an independent contractor. Any independent driver who makes more than $600 from one particular source will be expected to complete a 1099-MISC from that source. The 1099-NEC, on the other hand, is used for independent contractors to report payments received from businesses for work performed. Independent contractors and owner/operators are required to complete and file both the 1099-MISC and 1099-NEC forms with the IRS.

When are the Filing Deadlines?

Don’t get slapped with a hefty penalty by missing the appropriate filing deadlines. The IRS penalizes workers for multiple reasons, including failure to file taxes and failure to pay taxes. Penalties include steep fines, seizure of property, and even jail time. Protect yourself by knowing the important filing and extension dates. 

  • February 12: The IRS begins accepting and processing individual tax returns.
  • April 15: The date for employees to file their returns or request a deadline extension.
  • April 15: Any unpaid taxes must be paid in full to avoid owing interest and penalties. 
  • October 15: Final date to file for those who requested a deadline extension. 

Notice that April 15 is an especially important date as it is the deadline to file your returns, request an extension on filing, or pay any unpaid taxes to the IRS. 

What’s the Recovery Rebate Credit?

This year, many working individuals will have the ability to receive a tax credit if they did not receive a stimulus check. If you received the maximum amount of payment from both federal stimulus checks, then there is no impact on your taxes and you do not need to report the stimulus payment as income. If you are one of the many owner/operators who did not receive the full stimulus payment amount from one or both stimulus packages due to your level of income, you may be eligible for the Recovery Rebate Credit. The Recovery Rebate Credit is designed to either increase tax refund amounts or decrease the amount of taxes owed for workers who did not receive the full economic relief payments from the federal government. 

To be eligible for the Recovery Rebate, you must be a U.S. citizen or U.S. resident alien, cannot be claimed as a dependent for tax year 2020, and you must have a Social Security number valid for employment. To determine whether or not you are eligible for the Recover Rebate, fill out the Recovery Rebate Credit Worksheet in the Instructions for Form 1040 and Form 1040-SR.

Filing your taxes can be intimidating, as the United States tax code becomes increasingly complicated each year. Rest assured, you don’t have to go at it alone. If you are concerned with your ability to file your taxes correctly and on-time, hire a professional tax preparer to help guide you step-by-step through the filing process. Protect yourself and avoid making common mistakes by filing the correct forms by the appropriate deadline.

Employment Challenges Facing the Trucking Industry in 2021

Employment Challenges Facing the Trucking Industry in 2021

The COVID-19 pandemic continues to highlight the sheer importance of long-haul drivers in the United States as record unemployment in the trucking industry leads to disruptions in supply chains nationwide. Namely, these unemployment rates resulted in a critical driver shortage in the industry, forcing carriers to increase their spot rates. According to Business Insider, when carrier rates increase, retailers tend to pass the transportation costs down to consumers. During the last driver shortage, Amazon raised their Prime membership price by $20. Clearly, a driver shortage affects more than just the trucking industry. 

As we move forward in 2021, the trucking industry needs to address the long-lasting challenges presented by the COVID-19 pandemic in order to improve driver employment levels and avoid further turmoil. 

Where did all of the Truck Drivers go?

One of the main factors leading to the shortage of long-haul truck drivers is the global economic recession. At the height of the COVID-19 pandemic, the trucking industry saw record unemployment rates, with over 88,000 jobs lost in April alone, according to the Bureau of Labor Statistics. While unemployment rates have improved since April, the U.S. unemployment rate currently hovers around 6.7%—the highest it’s been in years. 

Some carrier companies have since closed down their operations permanently due to decreased demand and increased driver costs. Government-mandated social distancing measures imposed on those remaining carrier companies negatively impacted productivity and further limited the need for truck drivers. 

Increase in Unemployment Benefits

Due to the drastic increase in unemployment, the United States government passed legislation that increased unemployment benefits and provided stimulus payments for Americans. Many older drivers decided to protect their health by accepting the unemployment benefits, rather than travel the country and put themselves at risk of infection. 

For a while, the increased benefits actually provided unemployed drivers with nearly comparable salaries to what they would be making while fully employed, disincentivizing them from returning to the workforce right away. Hundreds of owner/operators even received federal PPP loans to keep them afloat without having to work during the pandemic. As for what’s next, President-elect Joe Biden has his own plans for economic relief packages, including a boost in unemployment benefits that will certainly impact the trucking industry. 

Early Retirement

Not only is the pandemic responsible for widespread unemployment throughout the trucking industry, it also pushes many older drivers to cash in on their retirement early. According to a study published by the National Center for Biotechnology Information, long-haul drivers are an especially high-risk population, stating, “The unique co‐occurrence of pronounced health disparities and known COVID‐19 infection, morbidity, and mortality risks suggest the possibility of a novel COVID‐19 based truck driver syndemic due to advanced driver age and endemic health issues.” Many older truckers decided to protect their health and retire early amid pandemic fears, and it will take a new incoming group of truck drivers to fill the vacancies. 

CDL School & DMV Closures

COVID-19 forced many small businesses to shut down, both permanently and temporarily. CDL schools across the country have had to close their doors, significantly impacting the ability of prospective new drivers to obtain their CDL. Further complicating matters is the fact that at the height of the pandemic, over half (27) of states closed their State Driver Licensing Agencies (SDLA) while the remaining 23 states operated at limited capacity, severely slowing down processes. 

The pandemic has had such a great impact that the Commercial Vehicle Training Association (CVTA) proposed governors “enact executive orders to recognize CDL training schools and SDLAs as ‘essential services’ while also granting the Secretary of Transportation temporary authority to also administer CLP or CDL testing due to SDLA closure.” CDL school and SDLA closures also put a pause on the training and licensing of an estimated 25,000 to 40,000 new drivers. Many states and localities continue to impose their own restrictions and lockdowns, making it difficult for new drivers to obtain their CDLs and join the depleted workforce. 

The Drug and Alcohol Clearinghouse

In January 2020, the government made it mandatory for all long-haul drivers to report to the Drug and Alcohol Clearinghouse for centralized management of driver substance abuse records. Any drivers violating the DAC’s substance abuse policies are immediately removed from the road, and their infractions are documented for five years for current and future employers to access. Drivers can return to the road upon completion of proper DAC return-to-duty protocol, including meeting with a substance abuse professional. 

In 2020, the DAC removed more than 50,000 drivers for substance abuse infractions; less than 10% of “early violators” have returned to the workforce. This means the trucking industry can expect to lose around 50,000 jobs annually due to substance abuse, which would be a huge burden on supply chains across the country. 

The trucking industry has been hit hard by COVID-19, experiencing record unemployment rates and a driver shortage across the industry. Along with other repercussions, carrier companies now face difficulties finding and retaining high-quality drivers, leading to disruptions in supply chains. In order to minimize costs and keep the industry afloat, there will have to be new, innovative ways to attract quality drivers and meet the growing transportation demand.

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