Now that Land Line readers have had an opportunity to absorb the valuable information contained in the I-376 series of articles, leased owner-operators are raising numerous questions about how the leasing regulations affect their specific situations. Here is a sampling of the mail I have received so far:
Question: I am leased on with a carrier that is charging me weekly for workers’ compensation insurance. I never signed any forms for this insurance, nor have I been given any information on who the provider might be ... Is this normal or should they have to provide me with documentation?
Here’s a similar question on this topic:
Question: The company I’m leased to requires us to have accidental insurance in which they sign us up to their “hand-picked” insurance company. Can they require me to have this kind of insurance in any form?
Answer: Your carrier can specify within your lease agreement that you are to maintain various types of insurance. Your signature on the contract is your agreement to do so. However, your motor carrier cannot make a chargeback without specifying it in the lease agreement. They cannot require you to purchase insurance coverage(s) from or through them. They must allow you to fulfill these contractual obligations by giving you the opportunity to secure insurance wherever you desire, and frankly, we think you should do just that.
Buying insurance from a source other than your carrier will eliminate the hassle of replacing coverage if you terminate your lease with them. In addition, it allows you more control over your business.
If you choose to purchase coverage from or through the carrier, federal truth-in-leasing regulations require them to provide you with a copy of the policy upon request ... and you should always make that request. Obtaining a copy of the policy allows you not only to verify your coverage, but also to familiarize yourself with any exclusions or limitations that may exist.
Your lease should specify the carrier is to provide you with a certificate of insurance containing information regarding the name of the insurer, policy number, effective dates, amounts and types of coverage, and the cost of the coverage, along with deductible amounts you are liable.
Question: My lease carrier does not withhold a bond on contractors, but I have heard from drivers for the company that the carrier will withhold the final settlement for up to 45 days, even though all fuel cards, placards and insurance binders are turned in to the company upon termination. Is it legal for them to hold the final settlement for so long?
Answer: According to the federal truth-in-leasing regulations, your carrier must pay you within 15 days of the time you turn in your paperwork (and placards if terminating). If the carrier required an escrow fund, they would have up to 45 days to return this money to you; however, your settlement check and an escrow fund are two different things and the leasing regulations treat them as such. Your motor carrier is required to do this as well.
Question: My husband and I are owner-operators, and are getting ready to sign a lease with a carrier. We read Land Line’s articles on Part 376 of Title 49 in the Code of Federal Regulations. Could you please let us know where we can obtain a copy of these regulations?
Answer: You can contact our office to request a copy of the federal truth-in-leasing regulations. For those of you with Internet access, visit our web site at www.ooida.com. Click on “Regulatory Action” (left side of home page in fast-find menu); then click on the DOT leasing regulations. Here you can view the regulations and print a copy for yourself.
Question: The company I am leased to required me to sign a new contract at the beginning of this year, even though there were very few changes to the wording, but nothing that affected my compensation. Now they have sent me an addendum to the new contract that I just signed, and it does negatively affect my compensation. I don’t like the changes. Can they do this so soon after I signed a new contract, and can they make me sign the addendum?
Answer: The company can make changes to the original lease by using the addendum. This gives you an opportunity to decide whether or not the changes are agreeable. It is your right to reject the terms of the addendum by refusing to sign; however, many contracts specify either party can terminate the lease for any reason. You also should be alert for wording to the effect that your continued work for the company indicates your acceptance of the new terms, even without signing the addendum. If you can’t negotiate your way out of the terms of the addendum, and you refuse to sign, you should find another company.
If you have questions that you’d like answered, please e-mail them to firstname.lastname@example.org. Although we won’t be able to publish all questions in Land Line, you will receive a response.