Overtime and Per Diem

Hello Dale,

I did not fully understand how it works either, until I spoke with my Block Accountant. The Per Diem a driver should be paid is deducted from his gross earnings. This figure is set aside and taxes are figured on his adjusted gross. (a little Less taxes being paid, for the driver and from the company.) The per diem is added at the end of his pay with a total net income for the individual. Different states allow for different rates, although most are fairly close. I am not based in Chicago / Cook County, so my allowable rate is actually $20 per day less than the $79 allowed up there. Thanks Illinois! I usually suggest most folks speak with their tax professional to receive the best information. Since my fellows run six days before spending time at home, their "away from home" per diem is based on five days. This only counts for meals. If, God forbid, they break down and must use a motel, i take care of the emergency at my desk.

Hope this makes things clearer, Dale.

Good morning. Dale and Dave, you are absulutely correct. I did not post my information about wages until we found it was working well. One of my sisters is my finance officer and runs a tight ship with accounts receivable, payable, and wages. She read these posts and claims that I explained things fairly well. The only thing I may not have been real clear about is how the taxes are calculated with the adjusted gross, after the appropriate per diiem is deducted from the gross. I hope you fellows understood me.

And Eric is wrong with thinking this would not work for him as a single operator. Unless he does not haul longer runs where he would be gone overnight. Personally I think per diem should be available for all days worked. Afterall, a driver must eat during his last day of work, while on the road. And there is no reason why an O/O can not figure his wages on an hourly basis.

A couple of requirements I had to meet with my shippers is having trailers spotted at their facilities for loading the next loads. This way both of my men perform drop and hooks there and "get the heck out of Dodge". We also provide pallets, after doing pallet exchanges with our receivers. This also saves us some money. And, fortunately, I purchased four more refers before the "stuff" hit the fan.

By this point in time, I had hoped to be running five or six rigs. I will need to replace my 5700 Stars next year. (Good Lord, the prices!) I have been speaking with the manager of my local Mack dealer and I have the desire to purchase Anthems with the 8HE. rated at 445/1860. I have not found owners on youtube running this set up. Only a few running the 505/1860. Anyone who may provide me with information of fellows running the High Efficiant engines will be appreciated.

I do not have the time to sign in to this forum, or my DAT forum, as often as I used to. It's been nice writing to you fellows, again.

This is pitiful... and humorous. I could throw in my two cents worth when I have nothing better to do. Jerry is on it, trying to improve their situation.

Thank you for the information about Schneider toying with the idea of paying hourly. i had not read about this. My nephew had been a driver for this company, before he agreed to help me build our small company. (Rob will probably inhierit the company when I meet "the great dispatcher in the sky" one day.) When we were on the phone today, he also suggested we just keep the Stars running and just repair, or rebuild the engines. as needed and i should concentrate on buing the equipment needed to expand into the dry bulk field, with the Trinity belt trailers I already have specs on. That had been my wish all along and why I have tried to keep up with things on this website.

I opened this blog with the hopes of providing food for thought for you and others, with my experience and the information on how I am doing business. Of course, I don't mind debating paying by the hour, rather than by percentages, to anyone. And meeting a shippers needs (customer satisfaction) is priority one with us.

I agree with your statement about ELD's. None of us liked being forced to use them. However, one benefit to using them, along with the programs I use, it is easy to track a driver's performance when paid on an hourly basis. Not that I would worry about Rob or Al. However, future drivers for us will be well informed about trying to steal time from us, to try to increase their wages. You will be able to do this with the future expansion of the business you and your wife have.

For your information, i was forced into early retirement do to an illness, which also ended my hobby and flight status as a private pilot. i had become very bored in retirement, which is why I got back into trucking. Shortly after opening our company, I had a stroke, followed by a heart attack. Fortunately the stoke only affected my previous military disability, that I received while serving our country, and not my brain. I don't think! Now I get around with a wheel chair, or walker for short distances. However, there is nothing wrong with my right side and believe, if I could get up in the saddle, that I can still drive a rig as well as most others. Especially since we run automatics in our tractors.

As the third generation of truckers in my family, I will continue my fight for better rates and compensation for the drivers. Before de-regulation I was running deli, sandwich meats, to Arizona and California. The rate at that time was $1.60 per mile. We hauled produce back to Jewel Foods, here in Chicago, for $1.20 per mile. Since rates have not increased by any significant amount over 44 years, this is why I am addiment about trying to get O/O's and companies to stand up for themselves and realise the need for not allowing brokers, or shippers, to run their trucking businesses.

Wrong! I haven't responded personally because IVe been too busy. Besides the fact that I don't believe I could tell you anything that I haven't expressed here. Most of the fellows I know, know I don't blow smoke up anyone's butts and try to express my expeirence that, hopefully, many will find informative, or helpful.

Nowhere in the FLSA are any statements that prohibit truck owners from paying hourly rates for hauling anywhere. Just the guidelines where paying overtime is concerned. if Schneider is toying with changing their payroll situation, I know their legal department must be well versed on the rules. My legal firm certainly is.

Protests in Canada, elsewhere in the world, or our nation never do any good because governments do not give a damn about the members in our industry, or the plight we face. And in my opinion, brokers just laugh at us. We pay the huge amounts for our equipment, insurance costs, obtaining our authorities (for running Intrastate, or Interstate) and the rediculas cost for fuel today. Yet they dictate, or offer the low rates that they are willing to pay, to have products moved all over the country. This is why obtaining contracts is the only way to go. And our industry is the only industry that has outside forces determining what we are allowed to earn.

It does not matter what segment of the trucking industry we are involved with. The only way we can gain control over what we earn, is to set our own rates again. Like before de-regulation. We are not super expensive, by any means. Just realistic about what we need to handle our loads. And since we are not allowed to publish rates, there is nothing illegal about getting a few hundred business owners together to collectively agree on a reasonable bottom rate no one would go below. A movement that could conceivably grow nationwide. Wouldn't that be nice. Anyone willing to set up some kind of trucking seminar or program? Shoot, I would be willing to act as a spokesperson to help. For free! Especially if a program could held on a Sunday, the only day I'm not real busy.

Mike stated he has been in farming for sixty years. I congratulate him on that and assume his acerage has proved to produce well and profitably. Heck, I won't celebrate my sixtieth year in this racket until next June. He did not state what authority he was operating with. We all are familiar with how many farmers across the nation haul on the cheap. As a business man I could not believe this when I first learned this fact. You would think these individuals would want their trucking business to be just as profitable as their farms. Anything less would be stupid. Ofcourse, we've also learned that many farmers around the country not only run for cheap, they do not have the authority to run for hire legally.

Paying a driver $10 per hour was a rediculas figure to speculate on. Ofcourse paying a driver an hour rate depends on the company's rates. Just as it does with paying percentages. Every company knows what it needs to earn before deciding on what they can pay a driver.

OMG, Mike! You may not be desperate for work, however, if you are only averaging a rate of only $10 per hour for your wages, you are a prime example of running on the cheap. Your rig is paid off? So what! Fortunately, I have been in the position of paying cash for my equipment, which saved me a lot of bucks during the purchase process. But since I have no liens on the equipment, does that mean i am going to run on the cheap? That makes no business sense at all!

When Rob and I started out, like most fellows, we used load boards. However, if I could not negotiate a rate that was at, or very close to, the minimum rate I established, I would continue to search for a load that did. Afterall, I was not able to negotiate the contracts we work with overnight.

When I was writing about the FLSA above, the exemption for truck drivers was originally written to prevent drivers from being overworked. Years later when the H.O.S. first came out, we received that protection by working 15 hours before taking the mandatory eight hours off duty. The present H.O.S. limlits a driver to eleven hours of driving, and an additional 3 hours of on-duty, not driving. Plus, the government shows prejidicial treatment to drivers with having their mandatory lunch break counting against the 14 hour clock. Here again, government intervention has screwed the trucking industry.

I suggest all research the original FLSA ruling, as well as the updated version, which really didn't change anything.

Sorry. That's what I assumed from your previous message.

My philosophy is, It does not matter what is placed in the box. The only thing that matters is the rate.

As a suggestion and not knowing what equipment you run, I assume you may be able to haul 25 tons. My belief is that all bulk loads should be hauled for $48 per ton, or higher, as some commodities are being hauled for that rate already. The mileage rate would be a chincy $2.5. Since rates have not increased significantly over decades, I firmly think this minimum rate for all commodities is fair. An hourly rate for local moves should be $125.00 per hour. My rates may be a bit higher than this; but, I work in a different division.

Some folks may think I'm crazy for suggesting this. But, am I really?

I may not have the sharpest pencil but around here avg loads are + or - 100 miles, avg rate 14 ton, multiple loads a day, 400 miles, $1500., $3.78 a mile, $125 hour.

These loads can be had by anybody, If dedicated you could negotiate more. With the jump in fuel/ inflation rates have gone up. But profit margin for any business is always slim.

If someone has a $5000. A month truck payment they will be desperate to run and take what ever keeps their wheels rolling.

As a farmer I don't set what I get paid for my corn. I watch the market and sell the highest I think I can get from the Chicigo board of trade.

People think they are setting their rate, but it is only what the market will bear.

There is no (great) money unless it's illegal or a government contract.

Hi Eric, a guy by the Name of Jamie Hagen of Hell Bent Express has become kind of a post child for Mack Anthem with their HE MP8, I would suggest looking him up on Twitter, Instagram, and YouTube. He's a great guy that loves sharing all about his fuel-sipping Mack. Pretty sure he's getting over 10 MPG loaded.

Eric, your question of "What if I haul a load 20 miles. Should it pay 48 per ton" makes no business sense at all. That quallifies as a local / hourly move!

When configuring a rate for anything, whether agriculture, or manufacturing, you must consider every thing that's involved. The time to reach the shipper, loading time, transporting the freight, delivering the freight, and returning to your home / terminal. You have to consider everything to strive to be profitable. And pay yourself, or employees, properly. To me, ofcourse, this is only logical.

Mr. Smothers, thanks for the tip. I will research this when i have time.

Ofcourse, Eric. Don't you feel that concerns the facts I listed above about calculating the best rate for negotiating? The distance between from point A to B is figured in. It also depends on the mileage. What do you concider the mileage to be for a local area? For the most part, I feel that $30 per ton is usually too cheap. I certainly would not take that load to somewhere like Green Bay.

A big problem I have is the fact that I negotiate for loads that I will make the best profit I can get. Since you've been in the industry for 30 years, you must have the same profit margin I do. Just do me a favor and stay in the agriculture arena.