Lawyer: Consequences Coming for Driver Inc. Players

Carriers that are using the Driver Inc. business model should proceed with caution, warns another transportation lawyer.

Reports Truck News:

“The consequences to the carrier of engaging Driver Inc. are significant,” said Carole McAfee Wallace of Toronto-based Fernandes Hearn, during a presentation at the firm’s annual conference in Toronto.

Driver Inc. is a structure that attempts to misclassify drivers as independent contractors.

McAfee Wallace said that Drivers working under this business model are under the misconception that the structure will leave more money in their pockets, she said. “They’re not a corporation with the expenses as write-offs.” Instead, the Canada Revenue Agency would define them as personal service businesses and will tax accordingly.

The Canadian Trucking Alliance and provincial trucking associations have been working vigorously with federal and provincial authorities to enforce against the fraudulent  practice, which avoids paying employee benefits or vacation pay, funnels at least $1 Billion dollars out of the tax system, leaves drivers exposed to vulnerable to tax penalties, manipulates new immigrants and endangers public safety.

CTA recently launched a political action campaign urging law abiding carriers and drivers to ask Ottawa to crack down on Driver Inc.

McAfee Wallace noted that some operations feel they are “held hostage” as valuable recruits ask for the pay structure.

Full story here.

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