The potential effects of “The Employee Misclassification Prevention Act”

This year, Senator Sherrod Brown of Ohio introduced legislation aimed at getting more companies to classify workers as employes that are now classified as independent contractors.  The idea is that as employees they receive benefits and legal protections that contractors do not.  Also, they would be on the payrolls of the companies allowing the state and federal governments to collect millions of dollars in FICA and unemployment that goes unreported and likely unpaid each year.  Also, these workers would be subject to workers compensation insurance in the event of a workplace injury.  All of these things add significant costs to a trucking company that uses drivers that will now be treated as employees but were treated as owner-operators.

For trucking particularly this division of contractor vs. employee gets to be very real when we talk about owner-operators.  Some will suggest that owner-operators should already be employees since they can only work for one trucking company at a time and as such cannot seek work from other trucking companies while under contract with their current lessor.  In most other industries, that might be enough.  Trucking companies will cite the fact the Department of Transportation requires the owner-operators to run under the trucking company’s authority and so it is the DOT that won’t allow the owner-operators to move, not the trucking co.  This defense holds up most of the time. 

From everything I’ve read so far, if the owner-operator owns his own truck or leases it from someone other than the trucking company, things shouldn’t change if this bill becomes law.  For owner-operators that drive company-owned or leased trucks, that practice will now be illegal and those drivers will have to be considered employees.  The IRS and many states have already been looking into this with companies like FedEx Ground.  Since the bill isn’t finalized, many things could change though so we’ll all need to keep an eye on this bill as it progresses.

We all know of a trucking company or ten that has OTR drivers classified as owner-operators even though the company buys the fuel and maintains the truck.  Those companies will be the target of this bill.  For the companies that have been paying similar drivers as employees, you should find that the playing field on the cost side will now be more fair. 

Some suggest that this bill will make all owner-operators into employees.  I haven’t seen that yet but again since the bill isn’t out of committee yet none of us know all the ramifications.  Turning all the owner-operators into employees would end owner-operators as we know it.

I welcome your comments below, try to be civil   I’ll have more on this in future posts including my thoughts on what if owner-operators had to be treated as employees.

Mike Ritzema

www.truckingpayroll.com

Other uses for payroll data part III – Driver recognition

Here’s one more use for payroll data, besides paying people of course…

Does your trucking company recognize drivers that reach certain mileage milestones?  If you are tracking it each pay period, you can having a running total at your fingertips.  Congratulating a driver for topping a million miles in the company newsletter or meeting makes everyone feel good.  It’s pretty easy to know exactly when he or she gets to that mark if you are keeping track the whole way.  If you’re not keeping track of the miles driven, the driver will probably think they gets there sooner than they do.  You can also post a miles driven leaderboard to everyone can see who is getting close to another milestone.

I know this doesn’t save a comapny from financial ruin but it’s a really easy way to recognize a driver for a well-earned achievement.

Do you have any other non-payroll uses for your payroll data?  Please comment on them below.

I am also looking for webinar ideas that I can present in late August.  We covered the HIRE Act in June and Health Care in July.  Please email me at mritzema@truckingpayroll.com with any suggestions for a webinar or a guest speaker.  Thanks!

Mike

www.truckingpayroll.com

Other Uses of Payroll Data, Part II. Are your drivers taking detours?

Besides paying your drivers, there are many other operational uses for the data you collect.  In the last post I talked about deadhead miles by run.  In this post we’ll cover detoured drivers.

By detoured, I don’t mean construction detours.  If you can record hub miles, whether you pay them or not, try sending two different teams or drivers on the same roundtrip and check the hub miles on the trip reports when they get back.  It’s not unusual to see as much as a five percent difference if you picked the right drivers to sample.  That five  percent on a 5,000 mile roundtrip is 250 miles of extra diesel and maintenance for your equipment.  That’s a lot to be giving away even if you only pay PC Miler miles so the driver isn’t getting paid any extra! 

A truck with team drivers could do this every week putting 13,000 unnecessary miles per year on your truck and using over 2,000 gallons of diesel for no reason that benefits the company.  When you ask them about the higher miles, they’ll say something like their route has better roads or less traffic.  Those may be good reasons to the driver but as long as it is you money to pay for the truck, that’s your decision to make.

Mike Ritzema

Superior Trucking  Payroll Service

www.truckingpayroll.com

Free webinar on Health Care Reform and Trucking Payroll today!

The Health Care Reform Bills have created new reporting requirements and new opportunities for trucking companies. Payroll personnel will need to comply with updated regulations, and be prepared to take advantage of changing credits and deductions. Transportation industry payroll expert Mike Ritzema explain the new procedures and available tax credits. Mike has more than a decade of experience focusing exclusively on payroll for the trucking industry, and has generously offered to participate in this complimentary web seminar. Topics include:

- Healthcare Reform Bills 4872 and 3590
- Updated reporting requirements & procedures
- New opportunities and advantages of reform bills
- Savings methodologies through payroll mechanisms

Register here

https://www1.gotomeeting.com/register/269576240

Are you maximizing the use of your payroll data?

Do you archive your payroll raw data?  Here’s one reason why you should.  If the right data is collected you can learn more about your business and make better decisions.

For example, what mileage information do you collect?  Some companies pay all miles and some pay loaded miles and there are many other ways to do it.  If you can collect the hub miles whether you pay them or not, you can compare the hub miles to your billed miles and get a better idea of which runs have your deadhead miles.

Many trucking companies look at total deadhead miles but looking at them by run or by round trip will provide you with the extra information to make a better, more informed decision about that lane’s profitability.

There are many other non-payroll related reasons to mine this data.  I’ll share some more in a future post.

Mike Ritzema

Superior Trucking Payroll Service

www.truckingpayroll.com

Is Your Payroll Service Double Billing You?

Many of you will receive your quarterly tax forms from your payroll service this week.  You’ll get your IRS Form 941, state umemployment forms and local tax forms if that applies to you.  If your payroll service doesn’t insist on making pay your taxes to them months early, they may have instructions on who to pay and where to mail them.  For most of you, there will be something else in there too…an invoice from your payroll service.

You might grumble but you’ll pay it anyway figuring that this is standard operating procedure in the industry.  It is standard but it doesn’t have to be.  You’ve already paid them to compute these now you have to pay them again?  It’s wrong.  Demand that your payroll service include all your quarterly reports for free!  W-2′s included!  They’ll charge you as much as $6.00 per W-2.  When they quoted their price to you how many W-2′s did they estimate you’d print?  I’ll guess it was as many as your number of employees.  How many 100 employee companies have zero percent turnover?  They knew the answer to and tried to trick you with a deceptively low number.  You can be treated better than that.  Call Superior Trucking Payroll Service and find out how.  (866) 296-5911.

Thanks for reading

Free Trucking Payroll Webinar on the Health Care reform!

Hi everybody,

On July 22 at 1:00 PM Eastern, I’ll be presenting our next free trucking payroll webinar.  It will be about the new requirements that affect payroll, specifically trucking payroll, from all the new laws dealing with health care reform.  Don’t worry, we won’t get into the politics of it all.  It will be about 20-30 minutes you can click here to register.

Thanks

Mike

Superior Trucking Payroll Service

www.truckingpayroll.com

How I Chose a Vendor

I need a new PC.  My desktop is from 2006 and while it still performs well, Windows-XP may not be supported soon so I’ll need to make the leap to Windows 7 and I’d rather do it in the summer than around W-2 time.

When I purchase the new PC, I’ll get it from my local Office Depot.  Why there?  Why not at any of the other fine stores that sell them or even more webisites that sell computers and maybe for $20 less?  Well, I’ll tell you.  The staff at my local OD has a couple guys that are really good at figuring out what problem I am trying to solve and then helping find the best solution.  I don’t find this kind of help every day.  For example, I went in there about a month ago to find a way to get remote desktop for my PC.  Isntead of telling me that I had to get a new computer or some really expensive setup, he showed me an external hard drive that can be accessed anywhere as long as it is connected to the internet.  Now, I can get my files anywhere.  Problem solved.  This isn’t the first time they’ve helped me either.

Because of the service I’ve received over the years, not only do I go there but I’ve sent many other people there also.  I want my friends and clients to receive the same great service that I do.

What’s the point of my commercial for OD?  Superior service and problem solving is out there if you just go look for it.  It’s not hard to find either.

Mike

Is your payroll service too big to care about you?

This morning, I was looking around at reviews of some of the national payroll service providers that are online.  I wasn’t suprised to find some good and some bad.  What did suprise me was the common theme that said the national company failed to listen to them and failed to do what they said they would.  I kept on asking myself, “How can they get away with that?”.

Well, one reason they can get away with that and they do get away with such poor service because many payroll service buyers do not know what they should expect from their payroll service.  See the link at the end of the post to learn what to expect from your payroll service.  They also don’t know that they can have a better option.

Another reason that the big players in the industry get to act this way is the enormity of their size.  Let’s look at an example.  Let’s say you have 125 employees at your company.  The revenue that you provide does not change anyone’s life at a multi-million dollar enterprise.  And so, they will not go out of their way for you because you’re just not that important to them.  With a specialty shop like us, the revenue from your comapny could be the difference between raises for the employees or not so we are clearly going to do whatever it takes to keep you happy.  Every client is huge to us.

Now I expect that some of you will come back with the idea that we don’t have the the expertise because we have less people here.  That’s not true!  Ok, it  is true that we have less people than the biggest players but the trucking expertise is here.  We know trucking.  You’ll never have to explain per diem to us or trip expenses or why so many employees get advances.  We already know it because we come from the same industry.  In fact, we may be able to pass on some ideas to you that we’ve learned over the years.  Will your national provider do that?  Probably not, they’re too busy not listening to you.

The next objection is usually price.  Well, that one is false too.  We take pride in pricing our services as a one price for everything model.  We won’t nickel and dime you to death.  Many of you that use national payroll providers will be getting your 2nd quarter IRS Form 941′s soon.  You’ll also get an invoice for generating it.  You’ll get another one for the W-2′s in January.  Remeber way back when they gave you a quote.  Take a look at it if you still have it.  Look at the numebr of employees for each pay period.  Now look at the number of W-2′s they projected for you.  It’s the same number right?  Did any companies over 50 people have zero turnover last year?  Exactly.  They purposefully did that estimate to make the price look lower.  At Superior Trucking Payroll Service we believe that practice is dishonest.  We don’t charge our clients for tax forms.  Once you pay for the payroll, the reports come along free.  If you ask for a proposal from us, you’ll see the annualized cost is probably less that what you’re paying.

There are many other things that you should expect from your payroll service.  We’ve developed a “Client’s Bill of Rights” and you can find it here.  If your current provider can’t live up to these simple things, maybe it’s time to give us a call.

Thanks for reading

Mike Ritzema

Superior Trucking Payroll Service

(866) 296-5911

mritzema@truckingpayroll.com

HIRE Act Webinar Q & A

Last week, we had a great webinar on the HIRE Act and how trucking companies can benefit.  I thought I’d share some of the questions that people asked.  If you haven’t seen it yet, it is at www.truckingpayroll.com and it’s free!

Q: Can I take the credit retroactively?

A:  Yes you can.  Especially while were still in the second quarter since the first quarter HIRE Act wages are reported with the second quarter’s.  After that, you can but it may involve an amended IRS Form 941.

Q: We have more than one driving company, if a driver quits one company and transfers to the other one would we still be eligible for the credits from company?

A: The second company would not be able to take the credit as the driver had worked more than 40 hours in the 60 days prior to starting with that company.  What I would do is have the first company keep the driver and bill out the wages to the second company.  If you are operating more than one company there are probably already shared expenses being billed anyway, this would just be one more.

Q: What are requirements to get tax credits?  How long do they have to be retained? 

A: The requirements are as listed in the webinar.  There is no length of employment requirement to get the credit for the Social Security Match.  The retention credit of up to $1000 requires 52 consecutive weeks of employment.

Q: If an employee terminates before 52 weeks do you have to pay back the tax credit?

A: No.  The Social Security Match Credit has no requirement for length of employment.  The retention credit has the 52 consecutive weeks of employment but you can’t take it until you do your 2011 company taxes so the 52 weeks should have come and gone by the time you file that return.

If anyone else has a question, please email me at mritzema@truckingpayroll.com or post it in the comments and I’ll do my best to answer it as quickly as possible.