A trucking company client recently called to ask me if he would be violating Section 212.1 of the Illinois Unemployment Insurance Act by himself paying for workers' compensation insurance on his owner-operators. (He wouldn't be charging back the owner-operators for the workers' compensation costs.)
As Keep on Truckin' readers are aware, Section 212.1 of the Illinois Unemployment Insurance Act defines when truck owner-operators are independent contractors and not employees for Illinois Department of Employment Security (IDES) purposes.
Per Section 212(a)(5), the owner-operator must pay all operating and licensing costs in order to be an independent contractor and not an employee for IDES purposes. The costs cannot be separately reimbursed by any other individual or entity.
The treatment of workers' compensation is discussed in the IDES Regulations to Section 212.1. The IDES Regulations state:
Section 212.1(a)(5) is not satisfied unless the individual operating the truck, truck-tractor or tractor pays all costs of licensing and operating the truck, truck-tractor or tractor. Section 212.1(a)(5) is not satisfied if the costs of licensing or operating the truck, truck-tractor or tractor are separately reimbursed by an individual or entity other than the individual operating the truck, truck-tractor or tractor. Costs not directly associated with the operation or licensing of the truck, including but not limited to telephone charges, expenses related to the loading or unloading of cargo and workers' compensation premiums with respect to the operator of a truck, truck-tractor or tractor do not constitute costs of licensing or operating the truck, truck tractor or tractor.
Therefore, the fact that my trucking company client pays for workers' compensation insurance on his owner-operators is not going to be a factor considered by the IDES in deciding whether or not the owner-operators are independent contractors or employees. This should be reassuring news to many trucking companies.
FREE INFORMATION: If readers of Keep on Truckin'...NEWS would like free information about Section 212(A), (B), and (C) [this is the section of the Illinois Unemployment Insurance Act pertaining to independent contractor status] or Section 212.1 [this is the section of the Illinois Unemployment Insurance Act pertaining to independent contractor truck owner-operators], please call Legal Assistant Tammy Nelson at 630-377-1554.
CDs: Attorney Nancy Joerg of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. has developed several popular and affordable CDs about independent contractor status "do's and don'ts." These professionally recorded CDs are $48 each. They are the most cost-effective and time efficient way for a company to understand the independent contractor issue. Contact Tammy Nelson at 630-377-1554 for more information.