Issue link: https://read.dmtmag.com/i/164136
Cover Story By Wesley S. Chused Use Of Independent Contractors Is A White Hot Topic In Massachusetts F or many years motor carriers have been permitted to operate using vehicles leased from and driven by their owners – commonly referred to as independent contractors or "owner/operators" – as long as the parties complied with the former Interstate Commerce Commission (now Federal Motor Carrier Safety Administration) leasing regulations. There are many benefits to both parties in using this business model: the motor carrier need not classify the owner/ operator as an "employee," saving substantial overhead costs in health and workers' compensation insurance premiums and related employee expenses, and the owner/ operator has the freedom to drive and use his vehicle as an independent businessman as he or she sees fit. This business model has been widely used in the trucking industry since the early days of regulation by for-hire and private motor carriers. In Massachusetts, in keeping with the rest of the country, the use of independent contractors has been a similarly widespread, common practice, especially by small motor carriers, parcel delivery services and private carrier fleets who rely on the owner/operator business model to reduce payroll expenses and related costs of operation as a means of staying competitive. However, motor carriers' use of owner/operators in Massachusetts suffered a severe blow when the Legislature, in 2004, enacted General Laws Chapter 149, § 148B ("Section 148B"), which amended its employee classification statute. That law now provides: …an individual performing any service, except as authorized under this chapter, shall be considered to be an employee…unless: (1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and (2) the service is performed outside the usual course of the business of the employer; and, (3)the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed. / OWNER OPERATOR/ SEPTEMBER 2013 / / 20 OO 0913 text.indd 20 8/7/13 8:29 AM