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What If My Driver Doesn’t Want To Switch From 1099 to W-2?

When running a trucking business you need to make sure you are correctly classifying your truck drivers. Misclassifying your truck drivers can cause a lot of problems for your trucking company with the IRS. Truck drivers should be classified as W-2 employees if they drive your equipment. If they drive their own trucks, they should be classified as 1099 contract workers. 

If you need a better explanation, watch this video.

So let’s explore what you should do is your driver doesn’t want to switch from 1099 to w-2 and how this will effect your company.

1099 vs W-2

Choosing whether to pay your truck drivers as W-2 employees or 1099 contractors is a vital choice when it comes to their compensation. Although both approaches have perks, paying your drivers as W-2 employees have numerous advantages. This article will examine the benefits your trucking company may experience down the road if you choose to offer W-2 employment to your drivers.

While the choice between W-2 employment and 1099 contractor classification depends on various factors, paying your truck drivers as W-2 employees offer significant advantages. Compliance with employment laws is the number one advantage.  You will not have to worry about fines and penalties for misclassifying your employees.  Other advantages include; increased control, and direction, improved employee-employer relationships, simplified payroll and tax obligations, enhanced benefit offerings, and a positive company reputation. By prioritizing the well-being and satisfaction of your drivers, you can build a stronger and more successful trucking company. Learn more about the 1099 and W2 below.

 

Why don’t my drivers want to switch to W-2?

There are many reasons why a 1099 driver wouldn’t want to switch to becoming a W-2 employee, but these are the most common reasons:

Obligations – if they have a child support payment that they don’t want to pay, or garnishment for wages if they didn’t pay a car loan or didn’t pay a hospital bill.

Taxes – if they want to claim 1099 deductions instead of W-2 so that they can lower the amount of money they pay in taxes.

Remember that drivers don’t get to choose if they are 1099 or W-2. This determination is made by the IRS and the State Department of Labor.

Transitioning drivers from 1099 contractor status to W-2 employees can bring several benefits for trucking companies. However, it’s not uncommon for drivers to be reluctant about this change. 

So, if you want to make the switch to W-2, but some of your drivers are objecting, you should be very careful and consider finding new drivers.

Now, we know you can’t fire all of your employees and get new ones.  But if you want to keep those you have that insist on being paid 1099, they will have to prove they own/rent their own truck and run under your trucking company as an owner-operator. This article explains all of the taxes that owner-operators have to pay. 

And remember, that the drivers who quit because you switched from 1099 to W-2 aren’t the kind of drivers you want to employ.

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Written by Mike Ritzema

Before founding Superior Trucking Payroll Service, Mike was the CFO of a trucking company with 80 trucks and a thriving brokerage. This experience gave him the perspective that a payroll solution has to make the lives of the office people better.  All the solutions he has designed are to benefit everyone.  Our company mission is to help trucking families and that includes the company owners, the drivers, and the office.

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