According to several carriers who haul trailers as part of Amazon’s truckload and line-haul programs are being told that they must provide Amazon with their company’s driver pay stubs showing that each of the drivers hauling freight as part of the Amazons contracted freight program are direct employees with the fleet.
In an email sent out to contract partners, Amazon writes that select companies are being audited to assure that all drivers who are hauling freight as part of the Amazon are direct employees of the trucking company rather than owner-operators. Amazon attributes the audit as a consequence of California’s AB5 law and the “increasing scrutiny of state officials on companies who use independent contractors.” It goes on to say that although there has been some “coverage of some of the litigation over whether AB5 applies to the trucking industry,” they are auditing to assure that all drivers hauling the freight are direct employees of the contracted company, rather than owner-operators. It is worth mentioning there is a preliminary injunction in place that blocks trucking from AB5 enforcement granted by Federal District Court Judge Roger Benitez.
According to the Amazon email, carriers are required to produce paystubs “showing the pay and payroll deductions” for drivers who are assigned to Amazon loads. Amazon is asking fleets with over ten drivers to produce pay stubs for 10% of the drivers who work the Amazon accounts. If they have fewer than ten drivers, Amazon requires that the small fleets send pay stubs for all drivers.
Amazon will then select drivers from those lists and carriers will be required to provide the full date specific pay-stubs for selected drivers including driver pay rate and all deductions. The notice says that fleets will have five days to complete the request. Amazon will then audit the fleet and it’s drivers included in the sample to verify the driver has a pay-stub corresponding to the time period in which they performed work for Amazon.
This brings up several issues for small fleet owners who pull Amazon freight. With constant struggle to keep seats filled, one small fleet owner told Freight Broker Live he is nervous about sending sensitive driver pay data to the logistics giant in fears that they will have an advantage should they launch their own fleet or a franchise program similar to their final mile program. “They will know exactly how much and when we pay our drivers,” said the fleet owner who wished to remain anonymous. “Should they decide to launch their own fleet, they know the drivers personal contact information and number to beat to pull the driver from us.”
Several fleet owners also broker a percentage of the freight they are assigned. One representative from a mid-size fleet told Freight Broker Live they have permission to broker out roughly 10% of the freight they are awarded to transport from Amazon if they do not have a company truck to put under it. Per their agreements with Amazon, they are permitted to hire an outside carrier to perform the work. This outside carrier is not an employee and with the recent purge of Amazon’s final mile delivery contracts, some companies are wondering if this is the foundation to possible recruiting efforts or worse, a massive purge within the truckload segment.
According to the email, the carrier audit process will begin on March 16th, 2020 and companies will have five days to comply with the requests.