Tip sheet and reporting guide to help trucking industry report suspected Driver Inc. schemes
The Canadian Trucking Alliance (CTA) is taking steps to crack down on a business model known as Driver Inc., a tax avoidance scheme that abuses workers and hurts the transportation industry, according to CTA President Stephen Laskowski.
“Federal and provincial entities have said they stand with CTA in eliminating the abuse by the organizers of the Driver Inc. scheme, which is plaguing our workforce,” Laskowski said in a news release. “This scheme is extensive and undermines several government systems and, as such, we need all relevant agencies to simultaneously focus their enforcement branches on these violators.”
In Canada, misclassifying truck drivers as independent contractors is known throughout the trucking industry as Driver Inc. — a business model involving a carrier telling a driver who does not own a truck to register as a corporation and sell its driving services to the company.
Using the Driver Inc. model, carriers can avoid paying taxes and benefits to workers, while also often disregarding labor laws by withholding wages and payments to drivers. The CTA and other trucking association partners want their members and all compliant carriers to report cases of suspected Driver Inc. carriers to federal agencies.
Reports of noncompliance can be directed to the Canada Labour Code, the Tax Code, Workers Compensation Boards, Provincial Revenue Authorities, the Temporary Foreign Worker Program and other government programs, the CTA said.
A tip sheet created by CTA includes what types of information should be included if drivers or carriers suspect a company of using Driver Inc. and how to send or report the information.
Information that should be included when contacting authorities includes why a business or person is believed to be cheating, dates or length of time the suspected cheating occurred, how it was achieved and whether anyone else was involved.
Tips could provide the basis for formal investigations and audits on companies suspected of gross violations using the Driver Inc. model, CTA said.
“Many employers and workers have respect for Canada’s laws. … But not all companies want to follow the rules — they circumvent the system by avoiding taxes and denying employees basic labor rights and, consequently, our industry and society are paying the price for this noncompliance,” Laskowski said.
The Manitoba Trucking Association (MTA) said it’s estimated that Driver Inc. is costing the Canadian government as much as $1 billion annually.
“While it may seem like this scheme is merely a convenient loophole for carriers to take advantage of, there are serious consequences associated with Driver Inc.,” MTA said on its website. “Very often, workers’ compensation board remittances are not made, either by the carrier or driver using this scheme. … If these drivers are injured, they very often do not have their own coverage.”
In July, a group called Justice for Truck Drivers held a rally outside Toronto’s federal labor program office to bring attention to wage theft in the trucking industry. Justice for Truck Drivers includes 42 people who said collectively they are owed more than $300,000 in unpaid wages from several different carriers.
The money members of Justice for Truck Drivers said they are owed is part of approximately $9 million in unpaid wages that companies in the Canadian province of Ontario failed to pay out to employees in the 2021-22 fiscal year, according to data from Canada’s Ministry of Labour.
Worker advocates told FreightWaves that wage theft is an exploitative practice that is often part of misclassifying truckers under the Driver Inc. model.
“The majority of cases that come to us regarding wage theft or anything else, the driver has been misclassified by their employer,” Navi Aujla, executive director of Brampton, Canada-based Labour Community Services of Peel, told FreightWaves. “When there’s misclassification, employees aren’t getting their full rights, employers are taking part in practices that would never be acceptable when someone is an employee.”