Use Care with
Although most regulations governing motor carriers have been significantly streamlined in the past decade, the leasing regulations (49 C.F.R. 376) that apply to the contracts between carriers and their owner-operators remain formidable and confusing. Any owner-operator agreement must contain more than two dozen specific requirements designed to protect the owner-operator against abuse.
Unfortunately, drafting an owner-operator agreement isnt as simple as borrowing someone elses lease as a template and modifying it to meet your needs. Its too easy to inadvertently omit or delete required provisions. Some of the more onerous provisions of the lease regulations require you to:
in writing responsibility for permits, tolls, fines, base plates, fuel
Recent decisions and revenue rulings seem to be more favorable to a finding of independent contractor status, but you still must be careful. Owner-operators provide services under contract. Although you are fully responsible under the safety regulations for the operation of their equipment, they are free to succeed or fail as business owners. A final major pitfall in dealing with owner-operators is workmans compensation, which is governed by state law. By statute, some states have created an exemption for owner-operators. Pennsylvania, however, recently held that owner-operators are employees for workmans compensation purposes. Most states dont require carriers to include owner-operators in their workmans compensation program. But states have different standards, so check your states workmans compensation laws to know your obligations. In most cases, the safest policy is to require that owner-operators maintain their own coverage and provide a certificate of insurance as proof of coverage for any drivers they hire.
can help a small fleet adjust quickly to market conditions and compete
for new business. But be sure to comply with the leasing regulations
and both federal and state employment law to avoid nasty surprises.