Carriers have options
Carriers can plan to convert owner-operators to employees, Kirsanow pointed out, but doing it successfully will depend on the individual company’s business model. “I don’t know if it’s going to be feasible or desirable for many,” he said.
They can also move to a so-called “two-check” option, which, according Kirsanow’s colleague, Benesch partner David Ferris, involves treating the “services end” of a carrier’s operations as a W-2 payment, and treating the trailer-leasing side as a lease payment. “This has been reviewed at the federal level – the Social Security Administration has looked at it and recognizes it as valid,” Ferris said.
But the option that seems to be getting the most scrutiny from carriers, and which some already are using, is letting a broker handle the relationship with the owner-operator. “This will satisfy the “B” part of the ABC test,” Kirsanow said, because brokers won’t be in the same business as either the owner operator or the carrier.
“But you have to have a separate company, and it would have to comply with the National Labor Relations Act, which dictates what constitutes a separate employer versus a joint employer. That could be a logistical nightmare, but many have already done this.”