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Defending the Right To Use Independent Contractor Drivers In Airport Ground Transportation

Defending the Right To Use Independent Contractor Drivers In Airport Ground Transportation . Presented by: Bill Stein Epstein Becker Green Los Angeles Office. Why Use Independent Contractors. Beneficial to Operator/Drivers and Company

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Defending the Right To Use Independent Contractor Drivers In Airport Ground Transportation

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  1. Defending the Right To Use Independent Contractor Drivers In Airport Ground Transportation Presented by: Bill Stein Epstein Becker Green Los Angeles Office

  2. Why Use Independent Contractors • Beneficial to Operator/Drivers and Company • Operator/Drivers can earn more by working heavy traffic times at airports • Company keep operating costs lower: no overtime, payroll taxes, etc. • Arguably the most profitable alternative for both

  3. In California, The Issue Is Control • Courts in California look at several factors, but the main test as to whether a driver is an independent contractor or employee is whether the Company has the right to control the details of the drivers’ work

  4. Issues arising in lawsuits • Operators/Drivers claiming that the company is telling them: • When they have to work • Who they have to pick up • There will be consequences if they do not do what they are told • They have to work at least 12 hours each day • How to pick up fares in airports

  5. Issues arising in lawsuits • How they are paid • How to maintain their vans • How to treat passengers

  6. Factors In Determining Control • Are the Operators/Drivers acting as business owners • How does the business opportunity present itself • How do the ads read • Factors Company considers in determining whether someone can be Operator/Driver: Interview? Job application? References?

  7. Factors In Determining Control • What is explained to the prospective Operator/Driver when he seeks the business opportunity • Writing explaining the business opportunity and that the Operators/Drivers are handling their own business

  8. Rules and Regulations For Operator/Drivers • Airport Regulations: Company may follow airport regulations and restrictions without jeopardizing independent contractor status • PUC regulations: Company must comply with these, and doing so does not demonstrate control. • Do not place further restrictions on what the airports and PUC require

  9. Effect on Airports • Allowed to put in rules and regulations that see fit • Can require vans to be readily identified with the company: color scheme, logos, etc. • Can require Operators/Drivers to wear uniforms • Can require vans to have certain capacity • Can put in regulations regarding the amount of laps drivers can take

  10. Effect on Airports, continued • Can require training so that the Operators/Drivers know rules and regulations for airport • Can require the Operators/Drivers wait in a specified location at the airport • Can require the vans be subject to routine maintenance

  11. Signs Operator/Driver is an Independent Contractor • Can plan own routes • Can decide when to work • Can purchase more vans and have others drive those vans for his financial gain • Can drive for other shuttle companies; not exclusive • Can choose where to line up at airport • Can turn down fares without punishment

  12. Other Indicators of Independent Contractor • In transportation industry, Courts have held these factors to indicate independent contractor: • Operators/Drivers can solicit business • Operators/Drivers provide own work tools—vans, GPS, cellphones, maps • Can have other Operators/Drivers fill in for them • Do Operators/Drivers have their own LLC. • Can use the vans for own personal reasons • Can obtain fares from sources other than dispatch • Company up front that it is a business opportunity

  13. Issues courts have been focused on • Agreements stating whether the Driver is an independent contractor or employee • How the business is structured: the more separation between dispatch services and providing business opportunities the better for finding independent contractor • Correspondence between Drivers and Company

  14. Issues courts have been focused on • Circumstances in which there are consequences for not picking up fares • Whether there is a policy manual directing Drivers how to perform their work • What agreements with airports state • Whether Drivers can act as their own businesses

  15. Things For Companies to Avoid • Do not have penalties for Operators/Drivers who turn down fares • Lock outs • If have rules requiring Operators/Drivers to accept fares, limit the circumstances • Do not have a disciplinary process or points system

  16. Things For Companies to Avoid • If dispatch by third-party company, do not let dispatch threaten penalties • Inconsistent tax filings – No W-2s, etc.

  17. CONTACT INFORMATION: William O. Stein Member of the Firm wstein@ebglaw.com Los Angeles Office Phone: 310/557-9558Fax: 310/553-2165 1925 Century Park EastSuite 500Los Angeles, CA 90067

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