Truck owner operators who operate under a lease agreement in the steel hauling industry
report both self-employment income and wages. These individuals report their income:
for leasing their trucks as self-employment income; and
for their services as drivers as wages.
The contract between the owner operator and the carrier identifies the owner-operator
as an independent contractor. The carrier owns, controls, and uses the equipment.
The owner operator drives or furnishes drivers for the vehicles. The carrier pays
the owner operator a percentage of the gross value of the load he or she hauls.
The owner operators are members of the International Brotherhood of Teamsters, also
known as the Teamsters Union. As members, the owner operators and the carriers are
subject to an Iron and Steel Rider to the National Master Freight Agreement. This
agreement covers such issues as:
health care benefits, and
Under this agreement, the employer (i.e., the carrier) reserves the right to control
the manner, means, and details by which the owner operator performs his or her services,
including the result of the completed work. The carrier agrees to pay Social Security
taxes, and to carry workmen's compensation. The carrier issues two checks to the owner
The first check pays wages as a percentage of the total payment amount. The carrier
deducts Social Security taxes and withholds income tax from the wages.
The second check is payment for the use of the truck. The owner operator reports this
payment as net earnings from self-employment.
The steel hauling industry and SSA accept this practice of divided reporting.