Driver Inc.

The Real Cost of Non-Compliance

Do you consider your company a law-abiding, responsible corporate citizen? Do you look closely at who’s moving your freight, not just the price of moving freight? And how concerned would you be if the carrier hired to haul and deliver your goods was knowingly scoffing at labour laws, siphoning money into the underground economy, endangering public safety on the highway and polluting the environment?

We don’t think you want to be knowingly part of the problem of fuelling the growth of rogue freight carriers. Join the trucking industry in our fight against the culture of non-compliance in a small, but growing, segment of our sector and let us help you identify the types of carriers that could be exposing you to risks, liability, and run counter to your own mission statements to uphold strong ethical, environmental and social values.

There’s an adage that says if it’s too good to be true, it probably is. As a responsible corporate citizen, have you ever wondered how some trucking companies can offer freight services for a fraction of the true cost? There’s a reason. Driver Inc. is a tax evasion strategy used by some carriers and drivers, whereby truck drivers, who would normally be deemed employees, are purposefully misclassified. This allows drivers to improperly claim small business tax expenses or in some cases simply avoid paying any taxes at all. It also allows the carrier to avoid paying payroll taxes such as CPP and EI. The illegal business model allows these carriers to fund predatory business practices at the expense of responsible companies who take seriously their obligation to comply with all the required labour and safety rules.

The following points could be helpful in doing your due diligence in trying to assess if your carrier is involved in this scheme:
• ESDC, CRA and WSIB have begun to aggressively target Driver Inc companies and have started publishing their names. Is your carrier on the list?
• Ask your carrier about their labour practices. Request information of how they pay their drivers and if they use ‘incorporated drivers’ who operate the carrier’s own equipment? True owner-operators will outrightly own their truck while Driver Inc. drivers will pose as an independent contractor while operating the carrier’s equipment or supposedly ‘lease’ it back from the carrier. It could also be worthwhile to ask the carrier if they are making all appropriate source deductions on their drivers (for example: CPP and EI).
• It usually isn’t difficult to find carrier advertisements for Driver Inc. jobs online or in trade media. Have a look at their pay packages. If the position is a seemingly normal driving position, but indicates they pay “+HST” or they “pay to corporations”, these are indications the carrier may be a Driver Inc. company.
• When drivers who would normally be considered employees incorporate and participate in the Driver Inc., it is highly likely they have no workers compensation coverage. This means when your firm utilizes these drivers and they are on your property, you are putting yourself in a precarious position. It is not unusual for Driver Inc. companies to register a very small percentage of their drivers in order to produce a clearance certificate. To limit your liability exposure, you should ask for proof that the carrier has coverage for all their workers.
• If the company has incorporated drivers, ask if they issue that driver a T4A for tax purposes. They should be doing this if their drivers are incorporated and operating as personal services businesses (PSBs).