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Independent Contractors Battleground of
Success
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| The MCAA seems to be trying to establish an industry standard for the classification of IC's. That is a good thing as now when a company claims that the use of IC's is industry practice the courier can counter with yes but there is industry practice as to what an IC is and if a company doesn't follow the standard then it's more likely they are just disguising employees. Some highlights from the article below: -Are your ICs truly ICs, or have you merely erected an easy to see through "Chinese curtain" as a convenient way to reduce your costs or your hassles? - In the beginning, the use of independent contractors for many of us was a case of survival and not of preference. - Consistency in procedure and practice will allow the industry as a whole to strengthen and protect our position. - the IRS affirmed the MCAA and its membership as the national voice in the courier industry, (the IFBMA should also be a recognized voice) - As members of the MCAA, each of us must adopt a standard code of conduct on how ICs are engaged and what an IC is required to have in place to be considered a true IC. As we move down this path, we must understand the proper treatment of IC's may cause our operating costs to go up, but the alternative result of losing this battle will be much more costly. Independent Contractors Battleground of Success Messenger Courier World Magazine, Summer 2004 By Christopher Mackrell and Gil Carpel Are you doing every thing you can to protect yourself on the IC front, or are you hiding and not doing the things that you should be doing? How would you fare if you were faced with an audit from one of the many state agencies out there currently engaged in such activity strictly for the purpose of finding you in violation of state law and intent on taking their pound of flesh for your sins? Is how you are currently treating your independent contractors defensible if you were face to face with a judge predisposed to classifying your independent contractor as employees? Are your ICs truly ICs, or have you merely erected an easy to see through "Chinese curtain" as a convenient way to reduce your costs or your hassles? At this year's MCAA annual convention, there will be a panel composed of some of the key players on the front line of the industry's fight for the use of independent contractors who will present critical information on the developments currently facing our membership and our industry. All across this country, we are seeing more and more challenges to the use of independent contractors. Is your company ready and are you ready if this battle lands on your door step tomorrow? In the beginning, the use of independent contractors for many of us was a case of survival and not of preference. The question of independent contractors vs. employee drivers and the service that each group provides will always be the subject of debate and review. Each of us is regularly faced with tough questions on this issue, either from our customers, our insurance brokers, or from our couriers themselves, as they and we struggle with the IC relationship. From a more philosophical perspective, we also struggle with which business model, IC's or employees, provides better service and which is more customer-centric. Wherever you fall on the wide spectrum of answers to a these questions, one thing that we all have in common is that the ability to use an independent work force if we desire is key to our survival as an industry as we know it. As industry leaders, our job is to do everything in our power to support and defend our right to use independent contractors. Even if you are currently operating with employee drivers, your support of our right to use independent contractors may make the difference in the fight to stay competitive in the future. Much like the long, drawn out controversy over the treatment of 62c employees, our industry's use of ICs is a fight that's been a long time coming and it's one that is getting more and more attention from regulatory agencies. As with the 62c situation, we must be prepared to take the fight to the opposition and to the Halls of Government where businesses using IC's are viewed as operating outside of the law and as a source of untapped revenue. To prevail in the coming national IC battle, we must all operate under clear and consistent rules and guidelines. Consistency in procedure and practice will allow the industry as a whole to strengthen and protect our position. We have seen the positive results of these types of efforts before. With the ruling on 62C, the IRS affirmed the MCAA and its membership as the national voice in the courier industry, and that voice was heard. As members of the MCAA, each of us must adopt a standard code of conduct on how ICs are engaged and what an IC is required to have in place to be considered a true IC. As we move down this path, we must understand the proper treatment of IC's may cause our operating costs to go up, but the alternative result of losing this battle will be much more costly. Below you will find some key factors that we, both collectively and individually, must consider adopting and following. We must begin viewing the below list as a code of standards that, when followed, will not only help us to avoid harassment by regulators but will give each of us a strategic advantage in the marketplace. These factors can and should be used as the basis for a "seal of excellence" that can have value and meaning in the eyes of your customers and in the eyes of regulators who now view IC's and courier firms that use them as operating in violation of state law.
In addition to the items above, a company that seeks legal compliance for the use of IC's needs to adhere to the best of its ability to the standard 20 key test questions that have been the guiding factors in defining independent contractors. Back to Independent Contractors |
