When To Hire W2 vs 1099 Company Drivers

When it comes to hiring drivers for a trucking company, trucking companies have two options: 1099 independent contractors or W2 employees. Before we proceed further, it is important that we recognize the fact that per federal labor requirements, all truck drivers who are operating under a vehicle owned by their employer should technically be considered W2. This especially holds true in the state of California with the AB5 ruling. With that said, not every carrier has the financial freedom to engage in such hiring practices and not every driver has the desire. There are pros and cons to both options, and it is essential to evaluate the unique needs of the company before making a decision. In this article, we will explore when trucking companies should hire 1099 company truck drivers and when they should hire W2 company truck drivers.

When to Hire W2 Company Truck Drivers

1. Long-Term Needs: Hiring W2 company truck drivers may be an ideal option for trucking companies that require consistent and long-term drivers. W2 employees can be more reliable and committed to the company, leading to lower turnover rates and increased loyalty.
2. More Control: Hiring W2 company truck drivers can provide more control over the driver’s schedule and work assignments. This control can help ensure that the driver is meeting company expectations and performing to a high standard.
3. Compliance Requirements: Trucking companies that require drivers to comply with specific regulations or standards may benefit from hiring W2 employees. W2 employees are subject to more oversight and regulation, making it easier for companies to ensure that they are meeting compliance requirements.

When to Hire 1099 Company Truck Drivers

1. Seasonal Work: Hiring 1099 company truck drivers may be an ideal option for companies that experience fluctuations in demand for their services. If a trucking company only requires additional drivers during a specific season, such as during the holiday season, hiring 1099 contractors can be a cost-effective option.
2. Short-Term Contracts: 1099 company truck drivers may be an ideal option for short-term contracts, such as a one-time delivery or a short-term project. In these situations, it may be more cost-effective to hire independent contractors instead of W2 employees.
3. Lower Costs: Hiring 1099 company truck drivers can be less expensive than hiring W2 employees. Independent contractors are responsible for paying their own taxes, insurance, and other expenses, which can save the trucking company money.

In conclusion, the decision to hire 1099 company truck drivers or W2 company truck drivers depends on the specific needs of the trucking company. When making this decision, consider the length of time drivers will be needed, the control required over the driver’s work assignments, the costs, and compliance requirements. Ultimately, the decision should be based on what is best for the company and its unique needs.