Whether you are a seasoned veteran or completely new to trucking, anyone can fall victim to the “Driver Inc” scam. Be very careful if you are told to incorporate as a trucking company to make more money. Unless you lease or own your own truck, you are likely walking into the “Driver Inc” scam.  

Read on if you want to help yourself and your fellow truck drivers and potentially save tens of thousands of dollars.

What is the “Driver Inc” Scam?

“Driver Inc” is a tax scam and an employee misclassification scam. Typically, a trucking company will tell its employees to register as a corporation. Then, rather than giving its employees a paycheque, the trucking company will pay their employees’ new corporations.

Since the trucking company is just paying another corporation, they are not producing a normal paycheque, meaning that drivers receive payment free from tax deductions. The company also doesn’t need to pay into social programs or workers’ compensation funds. And because everyone is saving money, the trucking company can typically offer clients lower rates.

If it seems too good to be true, it’s because it is. It’s illegal, and you will get burned.

How Does the “Driver Inc” Scam Hurt Drivers?

Victims of the “Driver Inc” scam work with considerably fewer protections and entitlements. They have no government compensation if they are injured while working. They cannot take paid parental leave, cannot benefit from employment insurance, and almost certainly will not have a government pension when they retire.

Moreover, victims of the “Driver Inc” scam have a much harder time claiming overtime pay, paid sick days, vacation pay, severance pay, and the ten paid statutory holidays.  And good luck accessing a group health and dental insurance plan. These entitlements are normally reserved for employees – not incorporated entities.

You also run a high risk of being audited by the Canada Revenue Agency. Believing themselves to be a normal corporation, victims of the “Driver Inc” scam will make a series of small business deductions they are not entitled to. The government can order you to pay everything back, going back years, costing you tens of thousands of dollars.

Finally, dealing with companies involved in a scam carries its own set of risks. If the company is willing to break one law, they are probably willing to break others too. Victims of the “Driver Inc” scam often report having trouble being paid for their work, being forced to work dangerously long hours behind the wheel, and being forced to operate unsafe vehicles.

Engage with shady and dishonest companies at your own risk.  

How Does the “Driver Inc” Scam Hurt Others?

Employers who get their drivers to incorporate save thousands of dollars. They don’t need to pay into social programs or offer their drivers any perks. They are the real bad guys in this story.

Because these shady and dishonest employers save so much money off the backs of the government and their drivers, they can afford to offer their clients lower rates. This leads to more business, and unfair competition for other legitimate and respectable trucking companies.

Because legitimate and respectable trucking companies face unfair competition, it makes it harder for them to give decent raises to their own truck drivers. In other words, the “Driver Inc” scam hurts wage growth in the trucking industry, at a time when the cost of living is skyrocketing.

Finally, the “Driver Inc” scam costs governments over $1 billion annually in lost tax revenue, hurting all Canadians.  

How is Being an Owner-Operator Different from the “Driver Inc” Scam?

There is an ocean of difference between owner-operator truck drivers and the “Driver Inc” scam.

“Driver Inc” involves avoiding taxes by misclassifying employees. Employers are encouraging truck drivers to start their own company, but these drivers do not enjoy any of the associated freedoms or responsibilities.

In terms of freedoms, the victims of these scams do not get to choose their own routes or schedules, and typically do not have multiple sources of income. In terms of responsibilities, they do not lease or own their own truck, or pay their own fuel or maintenance.  

While victims of the “Driver Inc” scam are corporations on paper, they are indistinguishable from any regular employee. However, it is always appropriate to classify an owner-operator as an independent business.

Owner-operators, even if they only have one primary source of income, lease or own their own trucks and work without direct supervision from a company.

But be careful! Crooked owner-operators sometimes drag people into the “Driver Inc” scam themselves, especially if they operate several trucks and need drivers.

What can be done about “Driver Inc”?

The “Driver Inc” scam is only possible because the federal government has ignored the problem for years.

Teamsters Canada has been committed to raising awareness about the situation – and lobbying the government for change. Ottawa desperately needs to start cracking down on the companies who get drivers to incorporate, saving truck drivers from huge problems and recuperating loads of tax money.

Our union is also working with employers to address this issue. Most legitimate and respectable trucking companies are losing business to those engaged in the “Driver Inc” scam.

Until the government wakes up and starts cracking down on the issue, there are a few more things truck drivers can do to protect themselves.

Getting educated on the “Driver Inc” scam is a good first step. We encourage you to share this article and read more about the scam. There are many YouTube videos, podcasts and other articles about this problem.  

The best defence against scams like “Driver Inc” would be to join the Teamsters. As truck drivers, we are stronger when we stand together in solidarity and in union with one another.

Every day, unionized truck drivers contribute to ensuring fairer working conditions for all. Be it by negotiating fairer wages, fighting back against unsafe working conditions, spreading awareness about the problems we face, or pushing the government for better policies.

If you would like to be part of our movement, please fill out this form to get in touch with a local Teamster organizer.