You don’t often hear about high profile trucking cases gracing the supreme court. But that changed this fall with New Prime v. Oliveira, which could influence hundreds of thousands of American truck drivers and even consumers. Why is this case important, and what do truck drivers all over the country need to know about this case? Learn more about the scope and impact of New Prime v. Oliveira.
Dominic Oliveira filed suit three years ago against New Prime trucking company, a commercial transportation company that specializes in flatbed, refrigerated, tanker and intermodal divisions. Dominic Oliveira claimed that the company neglected to pay him even minimum wage and charged him for working. An incomplete panel of Supreme Court justices heard the case on Wednesday, October 3rd and considered the arguments.
Oliveira claimed that New Prime violated the Fair Labor Standards Act (FLSA) and that the company did not treat him as an owner-operator but rather as an employee. Oliveira claimed in the suit that New Prime controlled his work schedule and dictated him as an employee. According to the United States Department of Labor, the consequences of independent contractor misclassification include missing benefits like overtime, medical leave, unemployment insurance and a safe workplace.
If you’re new or unfamiliar with the trucking industry, there are two types of drivers on the road. Company drivers are usually employed by a company and paid cents on the mile. This might vary depending on the type of route you drive, as well as the division. Independent contractors, also known as owner-operators, usually make a percentage of their bill for each freight load. Independent contracting has several coveted advantages. As an independent contractor, drivers get to choose and finance their own semi truck or commercial vehicle. Owner operators are also posited for tax advantages and get to be their own boss. This means choosing your own hours, choosing your own holidays, and potentially building your own business.
Driving as an independent contractor has higher earning potential that employment as a company driver, but that doesn’t always ensure it will deliver that potential. The arrangement between owner operator and businesses should be mutually beneficial because companies can shell out less for labor while drivers take a percentage for their work. Independent contractors can cost companies up to 20% less than other employees according to CNBC. Trouble arises when it’s unclear if a driver is properly categorized as an independent contractor. Were Dominic Oliveira an employee of the company rather than an independent contractor, he would be owed compensation for any miles or hours spent driving.
This widely publicized case holds companies accountable for dodging lawsuits. According to the National Employment Law Project, the risk in these cases is that companies will lean on the Federal Arbitration Act to sidestep responsibility for underpaying workers. While it’s true that some trucking companies offer higher wages, bonuses and benefits to incentivize workers to sign up amongst a driver shortage, this isn’t universal. This case could be a breakthrough for American commercial vehicle drivers by forcing higher wages. This debate isn’t new, either: Fedex, Uber, and Amazon have all been in the hot seat for independent contractor related misclassification.
Higher Wages Mean Higher Prices for Consumers
Thanks to external concerns like capacity shortage and a looming trade war, some experts are concerned about the effect of this supreme court decision on consumer prices. According to CNBC, consumers could wind up seeing an increase in prices between 10 and 20 percent. This could have lasting effects on the commercial transportation industry and semi truck drivers everywhere.
Oliveira’s case rested on the claim that his job, schedule and responsibilities were dictated by New Prime just as any other company employee. This would defeat the purpose and entire benefit associated with working as an owner-operator. Some state reforms have taken on this debacle, and the federal department of labor is intended to prevent unfair treatment of workers. Incorrect worker classification even impacts the government’s revenue due to taxes, workers compensation funds and unemployment insurance. Ultimately, the district called for further investigation to determine if Oliveira should rightfully be classified an employee or an independent contractor.
Positives On the Horizon For Truckers
Ultimately, pursuing your CDL and managing your own LLC as an owner operator is an empowering and lucrative opportunity. Cases like New Prime vs. Oliveira encourage companies to value the needs and rights of their employees. This case could be a turning point for semi truck owner operators everywhere by driving wages. New Prime vs. Oliveira has the potential to strengthen the integrity of the bond between commercial vehicle drivers and trucking companies. To learn more your options for financing your commercial vehicle directly or through a dealership, visit https://www.missionfinancialservices.net today.