Owner-Operators: Employees or Contractors?

When your freight is shipped by truck, the truck driver is usually classified as an employee or an owner-operator. The difference is simple: employees work for and get paid by a trucking carrier, and the owner-operator is an independent contractor who is their own boss and owner as a truck driver. Most of the time as a shipper you may not even notice the difference between the two. Many brokers and freight forwarders across the United States work with both carriers and owner-operators to give you the best possible price and service depending on your shipment.

However, there seems to be a growing concern in the trucking industry among owner-operators. State legislatures, like in New Jersey, are passing bills that will label all freight delivery drivers, including at the port, as employees instead of contractors. The reason behind the new legislation is because owner-operators are being classified as independent contractors instead of employees. If labeled as contractors, companies can save money by dodging fees for Social Security, health care, unemployment requirements and insurance. Companies argue that the new bill hurts their businesses, which they say would be impossible to hire new drivers who are not part of the union for truckers.

Further, companies are concerned that if all owner-operators are employees, this could raise expenses and possibly impact freight shipping rates. While this bill is not even signed into law yet, it is worth keeping a close eye on. The potential impact on shippers is yet to be seen, as the debate continues as to whether owner-operators are employees or contractors.