trucking business

Employees, Independent Contractors and Owner Operators: What to Know

In this post, we are exploring the changing landscape of trucking in Canada and North America, specifically the push toward classifying independent contractors as employees.

There are several ways to make a career in the trucking business. Each has distinct benefits, and the type of employment a driver chooses ultimately depends on what they want from their job. Do they value set hours or higher pay? Do they prioritize flexibility or set benefits?

One way to make a career in truck driving is to be an employee, driving trucks for a company. Another way is to be an independent contractor – free to move from job to job. Thirdly, a driver can be an owner operator, meaning (as the name suggests) that they own and operate the truck they drive.

In this post, we are exploring the changing landscape of trucking in Canada and North America, specifically the push toward classifying independent contractors as employees. Will this push more independent contractors into becoming owner operators? What does that transition entail for drivers, and how can Capital Hands help?

Defining the Terms

Before we move any further, perhaps it is wise to define each of the categories mentioned above. How do employees, independent contractors and owner operators differ?

The categories can overlap, and occasionally designations get murky. For instance, the Ontario Ministry of Finance released a bulletin entitled “Truck Owner-Operator: How to Identify an Employer/Employee Relationship.” In it, they list determinants for understanding if an employer-employee relationship exists between an owner operator and hirer.  Further, trucking companies are being pushed to designate independent contractors as their employees if they don’t maintain the thresholds established by the CRA.

Still, some basic categorical definitions exist. They are as follows:

  • Employee: An employee works for a company. Often, they do not have control over their schedule and are paid by the hour. They receive steady paycheques and are granted job security and benefits. They do not have to worry about vehicle costs, including financing and maintenance.
  • Independent Contractor: An independent contractor provides a service, though not necessarily equipment. They are often paid more than employees, but (usually) do not receive overtime, EI, Workers Comp or disability income. They must charge GST/HST for their services (if they exceed $30,000 annually as a contractor). They are responsible for vehicle maintenance.
  • Owner Operator: Some observers maintain that owner operators and independent contractors are too similar to classify as separate entities. However, differences exist. Per Keep Truckin magazine, owner operators have businesses attached to their names, operate under their own authority and can deliver goods without being hired by a company. The main difference, in many cases, is that owner operators possess their own commercial vehicle.

With terms defined, let’s explore the ramifications for drivers and companies.

commercial truck financing

Credit: cottonbro Via Pexels

What This Means for Drivers

As mentioned in the previous section, trucking companies are being pushed to make independent contractors their employees if they don’t maintain the thresholds established by the CRA. However, some contracted drivers want to keep the benefits of being a contract employee. This is pushing them to obtain their own truck and become an owner operator. They want to preserve a climate of genuine autonomy.

If you are in such a situation, and want to become an owner operator, you need affordable access to equipment. That’s where we can help.

The commercial equipment financing experts at Capital Hands can help you secure commercial truck loans or leases to ensure that you get a truck of your own without breaking the bank on costly upstart costs. We also offer major repairs financing in the event your vehicle needs expensive repairs.

Our equipment financing experts come from various industries, but we share one thing in common: we are entrepreneurs, business owners and independents, like you. We understand what it’s like to remain competitive in an industry, and we want to help you be a competitive owner operator.

We also understand the challenges for trucking companies this past year – companies who want to keep their employees but face cash flow problems or other financing issues. If you own a trucking company in need of financing help, please feel free to reach out to Capital Hands.

In Summary

The trucking landscape in Canada is shifting, and will continue to shift. Our aim here at Capital Hands is to keep you as informed as possible about those shifts, whether you are a driver or trucking company.

For further reading, please refer to the Ontario Ministry of Finance bulletin linked above. We also encourage you to read this Canada Revenue Agency overview on determining trucking employment status. If you choose to be a self-employed owner operator and need support, please reach out to the financing experts here at Capital Hands.

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