Agent or commission drivers are employees by statute (statutory employees) if they
sell and distribute the products or services defined above and:
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their work contract states they will do most of the work;
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they have no substantial investment in the facilities used to do the work (except
for tools, equipment, transportation, or clothing); and
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they have an on-going work relationship with their employer.
Agent or commission drivers may maintain their status as statutory employees if they
also distribute products or provide services that are incidental to the products defined
in this section.
EXAMPLE: if the products sell for the same principal and all the services are within the occupational
category. Assume the services are incidental if the time spent in handling the additional
products or services is 20 percent or less of the time, the salesperson spends in
handling all of the products or services. If the driver distributes for more than
one principal, consider the services for each principal separately.
The following factors characterize the working relationship:
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drivers collect money from customers to give to the company;
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drivers cannot handle competing lines;
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credit sales are not permitted;
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many drivers receive paid vacations and sick benefits and are covered by workmen's
compensation laws;
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drivers may quit or the company may fire the driver on short notice;
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drivers cannot have helpers or substitutes;
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drivers report to the company office at specified times to load the truck, return
unsold goods, and report on activities as requested;
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drivers must follow leads;
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some drivers are paid salaries in addition to commissions. Drivers may be compensated
in any manner;
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drivers are expected to solicit new customers and adjust complaints;
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the company sets the prices;
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drivers must keep reports of sales and other matters; and
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drivers must cover assigned routes at regular intervals.
The drivers must distribute products to their regular customers, and to as many new
customers as they can get. To accomplish this, the companies control the details of
the drivers' work. The driver integrates his or her services, to a great degree, into
the company's business. The contracts or agreements contemplate the rendering of personal
services in a prescribed manner, for specified pay, and the employer and employee
can terminate the contract on short notice. The drivers have no opportunity for profit,
or risk of loss. Drivers may drive their own trucks or the company’s truck. They may
solicit the customers they serve or serve the customers the company designates.
NOTE: Statutory employees are not self-employed because their employers must treat them
as employees for Social Security coverage and taxation purposes.