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Truck Drivers Labor To Load/Unload




I have drivers in the moving industry who use both local and on the road labor. The rumor mill says that 37% of your gross can be taken as your labor expense irregardless of what your actual labor cost is.

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There is no standard allowance for lumpers; actual costs have to be used. The real problem is the verification in case the deduction is challenged. Owner/operators don't carry W9s with them, and I doubt any lumper would sign one.

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I have a question in regards to lumpers as well. They are standard in the trucking industry for loading and unloading. Drivers pay them cash. Clients problem isn't with IRS, but with the Workers Comp people. The amount paid to lumpers can be anywhere from $15,000 to $45,000 in really good years. Workers comp wants them included for workers comp coverage, client doesn't. Is there any legal way to have them excluded? I told her that while I appreciate her position, that appreciation doesn't stop the workers comp auditor from including them as labor to be covered and that if she wishes to fight, she might need a labor attorney. Just wondering if anyone else has ever dealt with this?

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Fred, I've had clients that had employees and contract labor. When I provided the reports for the workers comp audit, I had to include the contract labor. Some of the carriers wanted to see the tax return so they could compare the contract labor claimed to what is on the workers comp audit. I know of no legal way to exclude them. If the drivers want the deduction, they need to prove it.

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The legal way is to have the "lumpers" carry their own workers comp policy, and provide a certificate of insurance to the driver. At the time of drivers w/c audit, provide the cert. of insurance to the auditor and they will exclude the payments to the lumper since they have their own policy.

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Well, the way it works is that the truckers deliver to a wal-mart or another business and in the old days, these used to be people who kept the money themselves. Now, companies provide this service and they collect from each trucker and yes, I know the proper way would be to gather up a certificate of coverage for each one, but sometimes it's not practical, or maybe it is. But, this service is kind of a racket as the truckers can unload themselves, but if they do that, they are at the end of the line and they sit for a few hours. Time is money, so they have no choice but to pay. I have a buddy who is in charge of a lumping service here locally for Golub/Price Chopper. I am going to ask him if a trucker requests a certificate of insurance, how long would it take to be provided. It may be simple, but I doubt it. I understand all the contract labor laws and the requirement for coverage. I really do, that is not what I am talking about. These lumpers are already on anothers payroll. I am just wondering if anyone has similar clients with lumpers and how they handle it and whether it would be a simple process to get certificates or not. Thanks

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I have some clients that show lumper reimbursements on their summary reports

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..."reimbursements"?

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Yes, reimbursements, it is common practice for the trucking company to pay the lumpers and then get reimbursed by the company paying them to do the shipping. It is truly a reimbursable expense and probably 95% of the lumpers out there are on some service's payroll. So workers comp is already paid on them, but gathering up the certificates is a nightmare. Maybe they will have to, I'm just hoping that there is a way around that administrative nightmare.

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Reimbursements, sure. Driver submits his itinerary and expense report and includes 'lumpers' on it. As I recall, Fred is right about going to the back of the line. The guys who unloaded on the Philly waterfront 30-40 years ago used that old loan sharking term, 'vig,' to explain it.

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Drivers get reimbursed, but so does the company. My client, the company, gives the expense money to drivers who pay at the dock and then my client, the company, gets reimbursed for the lumping expense. And, to top it off, the lumpers are now on payroll, not like in the old days, when they received the cash directly.