Driven to Succeed: Trucking Payroll

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[00:00:30] Welcome back folks. We got a really, I mean the subject today I have been anticipating for pretty much the whole time we started this show. But before we get into that, what's up Walt? What's up with you man? Brian, how you doing? Man, I'm good man. I'm good bro. Is her, what's good with you? Any financial fitness challenge updates? No, it's been the same thing. Yeah. We're following a plan. We're still steady and on the plan.

[00:00:59] You know, as far as the fitness, you know, part of it, like I hurt my back. Oh, physical fitness. Oh dang. Okay. And so I had to take a little bit of time off. But what I, but I still, I still pretty good. Good. Didn't do too much of, you know, too much spending or anything like that. So still doing good. Cause I know that's some of the things we fall into the pitfalls we fall into, right?

[00:01:22] When something happens and then, you know, whether it's mental or emotional, we find ourselves going down that path again and just picking up all those habits that we are trying to change. Right. So easy to be bad. It's hard to be good. It's true. What about you man? Well, I mean, I guess the things that came to mind is like, what I found is routine has definitely helped. I thought I was like already a routine person, but no, like having like set routine is really helpful. Same thing with the gym.

[00:01:50] You know, when I can't make it, I try to push to just do my little calisthenic workout at home. And I'm trying to do that every day so that if, when I don't make it to the gym, I still have that consistency. There was something else, but I forgot, but yeah, that's it, that's it, man. It's this steady living the plan and trying to execute and be consistent. That's it. Well, okay. That's it, man. All right. So what do you got for around the pay horn? Well, not too much around the pay horn.

[00:02:19] What I realized is around the pay horn takes a lot of work and then, or a little bit more time. So I don't always get to haven't gotten to do it the way I want to do it, but I do got an interesting article. It's on business wire. The link will be in the show notes says flutter flutter wave named to top to time. 100 most influential companies listed for the second time highlighting global payments influence.

[00:02:47] And if you haven't heard of the company, here's why. Africa is leading payments technology company returns to this global list after its 2021 debut. And what I. So a little blurb about the company has remained committed to connecting Africa through seamless payments. It empowers individuals and businesses to thrive in the digital economy.

[00:03:13] Today, it's solutions, power growth across diverse sectors. These, this, these include cross border remittance, e-commerce, travel, payroll, and hospitality.

[00:03:27] And I threw it in and I love flying, finding these little gems flutter, finding these little gems because we get so caught up in the U S and our little micro circles and you know, our bubbles of work of our life. Right. And we don't realize that there are companies out there that we've never heard of that are doing millions and billions in business in the world that we live in payroll.

[00:03:57] You know what I mean? So yeah, just to expose us folks to different things around the globe. What's up? What you got? So I have two things. The first thing is about the L P G A. Oh, I know what you're going to say. Yep. Go ahead. They partnered with UKG. UKG. Yep. So they became their official HR payroll and workforce management technology partner. So yeah, advertising.

[00:04:22] They, they, they helped them make sure that it enhances efficiency and improve the employee experience. It's not going to help either one thing. It's just marketing. The other thing that I have is for something about daily pay. Oh, so they announced a 200 million asset backed securitization. ABS. I mean, I don't know. Of its all receivables.

[00:04:48] So this is seen as a new asset class and aims to help employers offer employees more flexibility in how they access their earned wages. Interesting. But we're going to fill notes. Yeah, no, no. Nice, man. That's what's up. So, um, as we prepare, we look ever since we started this show, we were talking about like industry specific payroll and blah, blah, blah. That was like one of the recurring things that we talked about.

[00:05:18] And today we have Michael Rizema. I gotta, I always get the names. We get these names. It looks like Rizema, right? Yeah. Rizema. Sim, Sim. Any who, he's coming to us from the trucking business and he is the president and founder of Superior Trucking Payroll Service.

[00:05:40] With over 20 years of entrepreneurship, finance, software and operations, Michael built his service after serving as CFO for a trucking company with an 80 truck fleet and brokerage, giving him a unique on the ground perspective into carrier payroll needs.

[00:06:01] He's passionate, he's passionate about helping trucking families, streamline payroll, compliance, and per diem optimization. And regularly shares expertise on topics like wage garnishment, IRS form 945 and the 1099 versus W2 nuances. Off duty, Michael and his wife, Karen enjoy family time with their two daughters and four cats, cat folks.

[00:06:27] And when he's not crunching numbers, he's tracking down MLB ballparks, Dodger Stadium being a longtime favorite. Michael, thanks for hitting the road with us today. And welcome to the show. To the show, Michael. Welcome, Michael. Is it Rizema? Rizema. Rizema. I've been so excited about this episode. Welcome, Michael Rizema.

[00:06:56] Trucking Payroll is the episode today. We've been talking about specialty payroll since we started this show and we have not found anyone until now. And I'm just so excited to talk about it, to have you on the show. Oh man, welcome. And let's get right into it. How did you get into trucking payroll? Forget about payroll, trucking payroll. Yeah.

[00:07:24] I didn't have the normal path of the independent bureaus. I learned later that a lot of the bureaus were former employees of the big red one and the blue one and went off on their own. Right? And so, but that wasn't my journey. My journey was I was working for a trucking company and we used one of the big national payroll providers.

[00:07:48] And we had a problem because we would have trucks go about 150 miles, but we wanted to pay them a special rate for. So we would just pay them a flat rate. So we were going to pay them a hundred bucks or $150, depending on the situation. But I wanted the miles recorded because we paid by the mile and I needed to do it for some cost things. So I had, for example, I would have something like 150 miles at $0 trial plus 125 bucks or something like that.

[00:08:15] But what would happen is that the big national payroll provider, and I'm not trying to pick on them. I'm just, it was just what it was. I don't hate on anybody, but they, because it was zero, they thought it was a mistake and put their default rate in. So now I'm paying them 150 miles at their default rate plus $125 each time. And that's just not okay. I mean, it wasn't life changing money, but we had five drivers doing this kind of work and they were doing it four days, you know, four trips a week. And so, yeah, it, you know, it starts to add up.

[00:08:44] And so there was, I went to the owner and said to him, Hey, look, I can write you something better than what we've got now through this big national company. And he's like, I understand how it works. He knew that I could write this stuff because I had written what's called if the software for him for, if you don't know, I'll try to do it. I'll try and keep this brief, but truck, like for a car, you pay all your taxes for fuel when you buy the fuel.

[00:09:09] Right? So if you bought the fuel in Minnesota and you burned it and you drove through Wisconsin, Wisconsin gets the roads used up. It doesn't really get any money in Minnesota. You got the money because you bought the fuel there. Right? Well, with trucks, they even that all out. So you got to know where you bought everything and where you burned it. And then you figure out, well, I should have, I owed Wisconsin. In my example, I owed them fuel tax. So how many gallons I would have burned there. And I owe them that. But Minnesota owes me because I bought all this in Minnesota.

[00:09:37] Anyway, it's a whole thing, but we had gone through an if to audit and I got us through it because I found some errors and I fixed it and I wrote better software for him to do it in the future. So they, she knew I could do it. And so I did. And it did everything that the big national provider could do. 401k calculations, garnishments, all that fun stuff. So, so we were off to the races, right? That's like 2004, 2005. Yeah. And then, so I'm just happily, you know, doing, I was the controller CFO or whatever at that point.

[00:10:05] And we're just going along and a vendor, a trucking vendor asked me to talk to one of their customers because they were struggling with something. And they were thinking about doing what would have been a really bad idea. No, all right. Yeah. I'll tell you know, you gotta give somebody a solid, right? So I met with them. They told me what they wanted to do. I told him it was a really bad idea. And I asked him, you know, do you pay per deal? Because per deal is a magic bullet for trucking. You can get, right. Well now it's $80 at the time. It was much less on allowance for meals and incidentals while you're on the road.

[00:10:35] And I showed him how, if he did it, he could save, you know, at the time it was probably $1,200 to drive a year. And he had 40 drivers. Like that's almost 50 grand. So he was this guy I talked to, his name was Jim. I won't give up his company name. I mean, just because it would, it would just, it would, I won't embarrass him, but he's a really smart guy. He's, he is not some, what you would think of as a, the stereotypical trucking company owner.

[00:11:02] He's not that he's a bright guy and he didn't know about it. So it got me thinking if this Jim didn't know about it, there's gotta be a lot of other really smart people that don't know about us. And so like, we gotta do something with this. And as it turned out, the elder had retired from the trucking company I worked at and the new president and I didn't really see eye to eye. We, as an example, we took a Myers-Briggs test. I love the story.

[00:11:31] We took a Myers-Briggs test, right? We all did. She wanted us to do it. It was a good idea. I support the idea. And my thing said, right in the, in the narrative, it said, you like to question people's ideas to make sure they thought them through. Absolutely. Right. I'm like, yeah, that's me. I absolutely. I'm not even guilty. Cause I don't think it's a rude thing or I'm trying to be malicious thing is just like, right.

[00:11:56] Hers said, I don't like when people question my ideas because it makes me think that they don't think I'm very smart. So she's the president of the company and I know. Well, yeah. Well, who's going to win that? It's going to be her every single time. So if she deserves to have people, the people she wants and like, whatever it's water. I'm not going to go. So I knew it was coming. And so I, I got this ready to go. And yeah, that was 2010. I was full time into it.

[00:12:24] And 15 years later, you know, here we are talking on podcasts. So Michael, let me ask you, you mentioned per diem in there, right? I haven't personally worked in trucking payroll. I have a few colleagues and friends that have trucking payroll is full of what they like per diem. That's his classification issues, garnishments. In your opinion, what area do most carriers struggle with the most and why? Okay. There's two. There's the per diem thing we talked about.

[00:12:55] There's a lot of things they struggle with, but I'm not trying to be mean about it. I'm just saying there's a lot of them that come to mind. The first thing is making sure they're doing it right, but that's a thing that's teachable and we get it when we're good. The second thing is there's a trust gap between the trucking company and the drivers. It has been there forever.

[00:13:14] If you want a, if you want to test this idea, go to any truck stop, the nearest truck stop to you, go in, buy any truck driver, cup of coffee and say, tell me about a time a trucking company screwed you over and then buckle up. Cause you're going to be there for 45 minutes. Yes. And so there's a huge trust gap. The drivers often think that the trucking company is trying to screw them. The trucking company often thinks the drive, they treat the drivers like they're replaceable.

[00:13:42] And so, yeah, that's what you'll see all kinds of things about driver shortage. And we need to do this. We need to do that. Oh, just don't treat your drivers like they're, I have a whole series on this about don't treat your drivers like they're replaceable and you don't have to replace them. That's, but that's really the idea of it. And so we try to do things to encourage them to build trust between the trucking company and the drivers. Because if you ask any of the trucking company owners, they'll all say, well, we're not trying to stick it to the driver. But you're also not. And that may be true. And I believe them. I don't think they're trying to do it. Right.

[00:14:12] Well, yeah, you could be doing things better. And just start by showing your work. You know, so because truck drivers don't generally, some get paid by the hour, but not very many. If you're a long haul truck driver, you know, you know that you took, yeah, you took that Grand Rapids, I'm in Grand Rapids, Michigan. You took that Grand Rapids to Phoenix, and then you took a load from Tucson back to Detroit. Okay.

[00:14:39] So, you know, you got paid for those because the amount would be so much, but then you had a little short load from Detroit to Grand Rapids. It's 150 miles. You got 75 bucks or whatever, right? Or a hundred bucks, whatever it was. Yeah. Show that to them on the pay stub, which is something that we do for them. Like, if our clients give us the detail, we put it right on the pay stub because we want to build trust. We want, because if the driver, the drivers might just, I mean, it's just being a human to assume that your pay is going to be higher than it is. Like, that's just being a person.

[00:15:07] So, it's, you know, just show your work. You know, it's going to, I mean, these drivers all have wounds, they all battle wounds from this. The trucking companies all have battle wounds for this, but you know, you just take the first step and say, look, we're not trying to stick it to you here. We're showing our work and we also tell them, if there are clients, we encourage them, but we let them pick. We want to send out the pay stubs as soon as they're ready, way before payday. Because that way, if we miss that Detroit to Grand Rapids, because the client doesn't tell us or we screw it up, like whatever, it doesn't matter what happened.

[00:15:37] We can fix it. The driver still gets that money on payday as if it was right the whole time. And so it just lowers the temperature of the conversations. Yep. You know, it also lowers the number of phone calls that the bill it's often the billing person, depending on the size of the trucking company. I mean, in a 500 truck fleet, it's a payroll person, but in a 40 truck fleet, you know, that's also the billing person. So, and so that person has to spend their whole day on Friday answering questions. If you don't do this, did I get paid for this? Did I get paid for that? Did I get my detention?

[00:16:04] Which is if you, if it takes too long to load or unload a truck, they get what's called detention pay. You know, all those kinds of things. Amazing. You can just show it to them on the pay stub and they'll know, and they'll start to trust you. And so, and a lot of times too, it's, it can be the spouse of the driver. It was like, you worked more than that. And so now, you know, which, and that's where things happen. Like you just get into those layers. And if we can just show the work, we send the email out to wherever they tell us to send the email. So if you don't want to send it to your wife, send it to your wife. It doesn't matter to me.

[00:16:33] So, or a family accountant or whatever. And so, but that's a long answer to a complicated question. But that's, it's that trust gap. And that's, we really work hard with our clients to help them eliminate that. Their wife just gets so much better if they can do it. You said something that made me think. You said you send the pay stub way before check date. How much, what, what, what do you mean? Like, what is that time period exactly?

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[00:17:29] Typically, it would be we will send out the pay stub on Wednesday afternoon for a Friday payroll. Now, we have some clients, we have one, we have one client in Pennsylvania. They get us their payroll the Friday before for the next Friday. That's all on it. Yeah, they're on it. I don't even know how they do it. They're incredible. And so, but those ones we send out, I think we send those out the Friday or before or the Monday before. Yeah. That way, again, it's three, two or three extra days to reconcile anything that's gotta be reconciled.

[00:17:58] If something's gotta be fixed, we fix it. Yeah, I've been, we went to market currently with the company that I'm with and we're demoing different companies and, and I'm happy to shout them out. Great company, great product paychecks actually has a product or their product that in their technology, you can actually notify just like what you're saying.

[00:18:20] You can notify the employee, I guess, I mean, I don't know about whenever you want, but whenever the preview is ready, before you even hit the button to see if they agree. Now, I think it could be a nightmare in some situations, but I like for your demographic. I think it works amazing based on what you just said. That is spot on and building that trust, right?

[00:18:48] Because it's different with an 18 year old that's working in a candy store that doesn't even know their hours. They're like, no, it's wrong. Like I, you know, I just know some demographics will be like, this is wrong because right. Right. I think that's just, again, that's just being a person. But yeah, one of the things we have some clients who we send out, we actually send preview pay stubs to the drivers before we actually finish the payroll.

[00:19:13] We have a couple of, when they are mostly contractors, legitimate contractors, which is that you had said that list three things. The third one would have been 10 99 versus W two. I'm getting that wrong. But the, the one they, these are the ones that I know of that I'm thinking of off the top of my head. Yeah. We send them out preview stubs so that they can look at, check their records, like make sure the advances are correct and things like that. Because they have to pay back for the fuel that got put on the company fuel card, things like that. That can be thousands of dollars. So they will, they're doing their own book work on their side.

[00:19:43] And so we'll send those out often on Tuesday for Friday. And then the client gets back to us. So we need to make a couple adjustments, whether it's actual errors or if it's, you know what, we let this guy, we had lent him money and we told him we'd have to pay it back this week. We get, we let him slide for one week or whatever. Cause we, cause his check was going to be $200 and he needs to feed his family or whatever. That's all good. Like it's their decision. It's their money. We're the vessel. But yeah, that's so, but so yeah, when you're talking about with paychecks, yeah, we have something that functions the same way. And it really helps again.

[00:20:12] It helps cut down having to redo things. It lowers the temperature. It builds the trust. And that's, you can't trust that. So you're saying that you've kind of also put independent contractors on this steady kind of payment schedule as well. Yeah. We pay independent contractors for our clients as well. Yeah. They're easier, right? Not doing tax calculations, man. That's candy land. Just the consistency of it.

[00:20:39] Again, you know, it's not the employee experience, but it's a vendor relationship, business to business experience building. It's talent. They're the production team, man. They're the ones making the widgets. So yeah, you got to keep them. And again, if you look for the people that are watching this that are, have any familiarity with trucking, you're going to know that companies talk about turnover, driver turnover all the time.

[00:21:04] On average, it's between 90 and a hundred percent, which means if you have a hundred trucks on average, you're hiring 90 drivers a year. But it doesn't mean that every driver only lasts a year and change. It means that you might have one truck that you turned over six times. And then one truck, you have somebody that stayed for 15, 20 years, but we have clients whose turnover is really low. And that's because they just people who understand their drivers are just replaceable people. They're not substitutable easily.

[00:21:31] And so they, yeah, they just don't. I want to set this next question about per DM and, and just for the, for the listeners and the payroll folks that don't know per DM is an, a combination of mileage and meal. Like you had mentioned, right. Right. That the government regulates the per DM rate. You can look up. Right. And it's like meal, meals and incidentals. And it's by meals and incidentals. I'm not mistaken. Right. No.

[00:22:01] Oh, what is it? Not by the mile per DM is per day. It's Latin for per day. It's, but the trucking industry has special rules. There's even in the IRS revenue procedures, you'll see special rules for the transportation industry. Yep. And so they get, instead of, you know, for the non trucking people for the other 99%, right. The per DM will be based on what city you're in.

[00:22:24] San Francisco is a different per DM than Canton, Ohio, but for trucking, because they're moving around, they just get a flat $80 a day. Great info. Thank you there. So Brian, thank you for setting me up. And I've got a question for you, Michael. In a recent post, you talked about big savings, right? I think there was a post you posted about a week ago or so with per DM and that it starts this week. Can you break down how dispatchers or truckers can take advantage of that right away?

[00:22:54] Besides call me. Yeah. Yeah. Take one shot, right? Yeah. What are you gonna do? And what happens is if you pay per DM, right? And you pay it as a substitute for wage. So if a driver made $250 in the day, instead of paying him 250 in wage, you pay him 170 in wage and 80 in per DM. Right? That's the simplified math. The $80, they're not gonna pay payroll tax on it. The company's not. And they're not gonna pay work comp insurance on it. Work comp for a truck driver is not cheap.

[00:23:24] It's not like office people. So that's where this thing, that's what, but when I talk about savings this week, I'm talking about those payroll taxes because your payroll service, whether it's us or ADP or QuickBooks or Gusto or paychecks or anybody else, right? They collect that tax from you. And so if you have one driver with five days on the road, which is pretty typical, that's $400 you're not paying payroll tax on.

[00:23:53] So $400, right? Five times 80. $400 times, and I only do the, I'm gonna make calculations. I only use the Plika. I don't get it on unemployment because for most states you're gonna max out anyway. Right? Right. So like in Michigan, it's $9,000 or $9,500 depending on your situation. So I don't worry. I don't count that in the math, just the FICA, but 7.65% of $400 is a little over 30 bucks. 31 20. I want to say, but that's off the back of my head. So that could be wrong. Plus you've got work comp savings.

[00:24:23] Now you get to give a little of it back because per diem is only 80% deductible on your income tax. So the math gets a little trickier there, but even at the highest, it's 21%, the highest corporate tax rate. And you deal, you pay tax on the last 20% and so you figure all that out. You're still gonna be up. You'll still be up $45 a week per driver. So per diem is only 80% right off to the employer, to the business. Got it. To the employer.

[00:24:54] Yes. It's cause like, it's like, again, without, I mean for income tax meal, like meals, like if I go out for dinner, take a client out for dinner, I only can deduct half of it. When I do my taxes, right. For a tricking for a trucking person, because they're subject to hours of service laws, which are truck drivers, and there are multiple meals at incidental markets, which are the two requirements. Wow. They can deduct 80%. So then it's just, so basically then it's the $80 per week is not deductible. So your tax on that at 21% is around 16 bucks.

[00:25:23] So I had that back in the calculation, which is why you only save about 45 bucks per driver per week in real money. So it's really easy math now, right? Like 20, you know, you're close to 2,500 a year depends on your work comp rate. And then, you know, so even make it 2000 a year. Yeah. And you've got 10, you've got 10 trucks, which isn't a big fleet. It's 20 grand a year, 20, a lot of money large, man. That that's the winner right there.

[00:25:53] That's the best thing you're going to have. And the better product, well, the other good part of it is the driver side. They're not paying tax on that $80 a day. So you got to, if a driver made $1,250, if they were just simple rate times miles, right? 2,500 miles, 50 cents a mile, which is a standardish rate depends on what you're doing. Of course it varies. So anybody who's watching this as a tricking person, don't worry about the rate I gave, but just saying, you're going double drops and you're doing this and that. Right. And it's a whole different thing.

[00:26:22] But so 20 at 1250 a week, you're going to pay a certain amount of tax. But if you had only 850 a week in wage and you paid the tax on there, then you got the 400 back at the end as reimbursement. In Michigan, I did this for somebody last week in Michigan. You're going to, the driver is going to get $90 and 90 cents more in their check. So 4,500 plus a year, 4681 or something. Yep. The biggest raise they're ever going to get. It is astounding to me that there are people that still don't pay per diem.

[00:26:52] And that's been my crusade. This is going to be my crusade all summer. It was, I'm just going to be talking about per diem every chance I get, which is why I was so excited that you guys reached out to me. And why I'm probably redlining your readers about value because I get so excited about it. Because these, you know, these guys who run small trucking companies, their tail off and they don't sleep. And it's so hard. Having a three truck trucking company is exhausting because you're probably driving one of the trucks and you're dispatching the other two. And if one of them breaks down, you got to deal with it.

[00:27:21] Or one of the drivers quits. Now you've got a truck payment, which is significant. And you, it's hard and they're not making a ton of money. The rates have been garbage for three years. So that we're hoping it's going to get better. But man, those guys are heroes. And so I got to meet a lot of them at the Texas trucking show last weekend. And it was fantastic talking to them. I was just trying to, I was just trying to lift them up. I'm like, guys, you're doing great. You're still here. You're doing great. But again, that's hard.

[00:27:48] But even for a three truck company, if I can put six grand in their pocket in a year. Right. Yeah, man. I love that stuff. That, that brings me joy. It's more than what I'm going to charge them to do that. I'm going to charge them to do their payroll. Even at three trucks, significantly more, probably more than twice as much is what I would charge them to do their payroll. So we have calculators on our website at trucking payroll.com. You can figure out exactly how much you'll say with pretty, and you put in your work comp rate, you put in your, it's spit your number of trucks.

[00:28:18] How long, how often they're out, stuff like that. Not a whole lot of questions, but it tells them exactly how much they're going to save. It even counts for the tax in increased income tax. We have another one that includes our price in it. So they can see how much they'll say after getting their payroll for free. Basically. Right. So we try to make this as obvious as we can, but it's yeah. Pretty is the magic bullet and you got to do it right. That's kind of the key.

[00:28:42] You know, you've got to, I have, I had a client get bought out and then left us for one of the big companies because of the parent company had them and the parent company deducted the per diem, but didn't pay it back as expense. So everybody's paychecks are really short. They came back to me. They're still with me. Many years later. It's like what they have, like, they have like eight different, nine different, 10 different companies, whatever it is. And the rest of them all use the big payroll provider in this one, because we're a square peg for a square. They got permission to use us. I love it.

[00:29:12] I love it. Yeah. So next one is, so it says, let's see, garnishments, IRS form 945 and misclassification. These things keep the trucking companies up at night. Which of these is most common and how do you help carriers navigate them? Awesome question. By far the clear answer is employee misclassification.

[00:29:42] Not even close. The 945s, they don't even look at it. They just send it to us and take care of it. So that's what they hire us for. Like that's right. Yeah. And then the garnishments again, they send it. They just, they literally take it, they scan it to us and we enter it and everything. We don't, they don't touch it. And then we bail out the checks and figure out all the money. But employment classification is a big deal in trucking. By the way, there are a lot of, yeah, there are a lot in construction and trucking are

[00:30:11] the, by far the two biggest industries where this is an issue. We have actually, again, on our website and those tools, we have one for, should I pay 1099 W2? And I invite it's absolutely free. Anybody should go take it. Truckingpayroll.com. And then it's under resources. And I think a business success tools, I think is what we call it. Yeah, that was that. That's funny. You mentioned that. Cause that was my sign like in 2008 or 2009. I'm like, all right, I gotta do this. Nobody took trucking payroll. Heck yeah. Done and done man.

[00:30:42] So, but yeah, that was the sign. Cause I really struggled with that. And so I, it's funny you brought that up, but the, yeah, I mean, it's hard, you know, there's some nuance to it. There's also truck drivers. If you're gonna paint with a broad brush, truck drivers will sound very sure that they're informed about things. Often they are not. They're often misinformed, which is unfortunate because these men and women are just, they're just trying to make a living, man. They're not trying to, they're not trying to get over on anybody, but they have a general mistrust to the government. Yeah. The pen of the last cowboys is the way we look at it.

[00:31:12] They're just getting out for their own, bringing their herd of 40,000 pounds of your supplies across country. It's a medicine food, all that kind of stuff. And so they have a general mistrust of, they, they think they get told sometimes that they could form an LLC and that means they're 1099. Well, we know that LLC is just like, it's like air conditioning in the car. What kind of car do you have air conditioning now? Oh, but Chevy, you have a Ford, you have a Toyota, you have whatever. And so it doesn't work that way.

[00:31:38] And so we've done, we have a bunch of articles and we've seen it happen where the driver insist on being 1099 or they won't work there. And so the owner capitulates and says, okay, I'll make you 1099. Steuererklärung, schnell und stressfrei? Kein Problem, mit VisoSteuer. Deine Daten holt sich VisoSteuer automatisch. Von Gehalt bis Krankenkasse. Mit nur einem Klick, ob per Foto oder einfachem Steuerabruf. Mit VisoSteuer siehst du jederzeit, was du zurückbekommst. Auf den Cent genau.

[00:32:05] Bei Fragen erklärt dir Steuer-GPT, dein KI-Berater, alles einfach unverständlich. Rund um die Uhr. Und bevor du abgibst, prüft VisoSteuer, ob alles richtig ist. VisoSteuer, so einfach war Steuererklärung noch nie. and then at the end of the year the driver owes 15 20 grand because they owe self-employment right on all that and this even gets past all the other parts that it's actually not allowed and the driver goes look i owe 15 grand on my taxes because you didn't pay me you've got to write me a check or i'm going to call the irs and say i should have been an employee

[00:32:33] right yeah that's a bad deal and so all the risk is on the employer all the reward goes to the driver and that's again that's even in the situation do what if you let them go they're gonna get real wise about unemployment if you have to let them go so they're like oh no i was an employee but you know and the employer will say things like well he signed a document saying it was an it was a contract that says specifically he's a vendor and then the judge will be fantastic

[00:32:59] doesn't mean anything so it's hard too because what trucking is such a is viewed as a commodity in a lot of places so they're always shopping rates so everything is about race to the bottom and unfortunately and but so there if you find out that a lot of people in your city might be paying drivers 1099 that shouldn't you almost feel like you have to try and compete and so what i with my

[00:33:24] advice i had a client call me about this their nearest competitor was trying to poach their drivers and pay them 1099 i said call the state on them don't this is not one of those don't tell the teacher that the kid misbehaved kind of things victimless crime whatever nonsense oh that's that's garbage we all got to play by the same rules here i said you absolutely call the state and you absolutely rat on them or if you i'm like if you don't want to give me the company's name and i'll do it

[00:33:51] like yeah like yeah well i'm gonna get a reward oh wow they were paying rewards 10 years ago during during the obama administration they those states would get rewards so you're properly classifying employees and so yeah right so but now i just yeah that's misclassification is a big deal i always try and if i see what if i have a client who's paying drivers

[00:34:16] and i can tell i can look at what they're paying them for and i know if it's legit or not and if they're not legit i let them know hey look this is against my advice that you're doing this but i don't i can't stop them but i want you to know look this isn't really what you need to be doing this could blow up in your face any number of ways besides it being illegal just here's how you're going to call it yeah so but yeah that's it's a huge deal in trucking and it comes and goes depending on but honestly it becomes and goes depending on the state government that you have at the time

[00:34:46] if they're more worker friendly or more business or employer friendly however you want to say it right i'm not trying to take a side in it i'm just saying but yeah it does come and go for sure flsa testing for employee versus independent contractor you you're talking about like the 20 point test well there's a right you're talking about the abc or okay that's the problem

[00:35:12] well and well in the and trucking gets an flsa exemption for overtime already yeah they don't anybody it's i want to say exemption 20 but it could be 18 i don't remember i remember reading it it was that if you're involved in driving the truck or loading the truck or maintaining the truck yep and the truck is involved in interstate commerce

[00:35:36] then you're exempt and so your truck your driver can never even leave like say i'm in michigan again if they just came to detroit and back for their whole lives you'd think well they might be able to get overtime but if that load came from california because it was produce well they were involved in interstate commerce so that they're they don't get overtime yeah a lot of them don't pay by the hour but like it's the mechanics are really where the issue comes up and so i'll have clients ask me

[00:36:04] hey do i have to pay them overtime and i always tell them you don't have to if they're interstate commerce company i said but i would be very careful about getting rid of that because you the mechanics can choose to work somewhere else great information michael thank you thank you yeah so in terms of technology and automation have been impacting payroll for trucking and where should carriers invest first

[00:36:33] wow that's a great question the technology has really improved they have some technology forced on them electronic logging devices got forced on them against their what they used to be paper logs where they used to cheat all the time they would have two log books but that's gone away so but the biggest like if i were a small trucking company say three trucks right my investment would be to get a into a tms a transportation management system or transportation management software whatever the s wants to be

[00:37:02] you can get a lot of subscription based now back when i got into trucking it required you to get a server and they would bring it all in and it was a big install it was a huge purchase now you can go and get it on a multi-subscription for 100 bucks a month or something it'd probably last depending on the features you want we work a lot with a company called ascend they make they're out of florida and they make one and they even put a button in there is where it sends the payroll

[00:37:28] information to us so you don't have to worry about finishing your payroll yeah it just drops it right to us and yeah that that's the elevation part on our side is that yeah just and then we got an import already built i mean the technique for as a technology thing it's not terribly elegant but it's certainly effective and it's perfect works and does exactly what we want it to do and so but yeah you having a tms is so important for a trucking company because they need to be able to know

[00:37:55] quickly what they got for a similar load or who they got a similar load from if i again i'm in grand rapids i send a truck down to houston and i need to get them home and i gotta use what's called brokers which is common for small truck companies that's how they get all their loads and so but you want to know okay last time i was in houston could i get a load from and how much did i get paid and if i thought that was acceptable i'm going to call that broker hey i got a truck in houston looking to come back to grand rapids on wednesday you gotta load for me things like that so just that

[00:38:23] it helps them keep track too because these guys worked their tail off but they are not great bookkeepers they're not great trackers of things like that they're intuitive and their intuition is usually good but it's not perfect and so this is like data that they can rely on yeah they're the talent they don't have to do everything yeah they're often and again they're often driving a truck but you can literally do it on your phone all right which is amazing so what's you know we're talking about the kind of the

[00:38:50] pitfalls to to avoid what's one of the mistakes that new fleets make in payroll setup especially that could cost them down the road one of the things is sometimes they don't know how much to pay the driver so because if you ask 20 people how much to pay a driver you're gonna get 20 answers yep and then and the rest might be right because of where they are saying no

[00:39:21] and oh no it's right and so that that's one thing it either pay too little or pay too much and usually they figure it out but sometimes they get worked by their drivers another thing is really where they can get themselves in trouble is not setting up the new hire paperwork correctly you know stuff like that not you know we try to help them a little bit we'll when we'll answer hr questions for them of course they can i mean any tricking nobody can call me with hr question i'm going to try and answer it but the we want to help them look these are the documents you need

[00:39:51] you know they have what they have they already have what are called driver files for the dot so but we need employee files too well they need them i don't need them they need employee files and so and i'd like help them get the right w like get an actual direct deposit filled out make them sign it you know things like that you know before they even start working kind of normal yeah it's part of orientation yeah get get the w4s get i9 you know get all that stuff done

[00:40:19] right off the get-go and so they struggle with that kind of stuff too a lot of them too especially those smaller fleets have a hard time with what i would call boundaries meaning they're not clearing their expectations to the driver okay driver this is okay this is not because the driver has the latitude in what they do if i pick up a load today and i'm going i'm driving out to la and it's going to take four days you know yeah maybe i should leave right now because i just

[00:40:46] got loaded or yeah maybe i'll leave in the morning i'll just hope there won't i'll just hope there won't be any traffic going through chicago or you're right now down and sometimes there's not and sometimes there is and i hope there's no construction going through iowa or whatever i hope there's also probably snow in the rockies that only happens like 10 months of the year so right so then they close down our pass and all that and uh you know that kind of stuff and so but setting boundaries and being very being crystal clear about expectations about this is what i expect

[00:41:15] from you you know i expect that you're going to leave when you're supposed to leave i expect you to not be running your load like everything has to go perfectly for you to deliver because then you're going to be late a lot i expect you to show up in clothes that i won't be embarrassed by when you're because you're your our face when you're on the dock you know i expect you to be a human being as in i expect you to be civil with everyone you talk to anytime you're near my truck

[00:41:43] things like that and i they seem obvious but you know you spell you gotta spell them out and so even things like having an employee handbook you know things gotta read you have a new book you know but just it's not hard they do well they do and they should go over with people but it's just about it's about clarity it's about clarity of expectations i like to call them boundaries and it's i think what i think that's a lot of why trucking companies have as high turnover as they do

[00:42:09] they're not clear on their boundaries and they're not clear on their community why we're just not we know what's our setting expectations they truly are the last cowboys right i love it yeah right and i want to give them professional respect you know i want to okay look okay it's loads ready at nine it's 9 p.m out here loads ready at 9 p.m that's great but you want to leave till 11 okay that's fine i trust you to get your job done but you can't take all your slack time in the beginning

[00:42:37] and so that that kind of stuff and so you're a professional driver act like it that kind of right you that kind of stuff and so and a lot of people won't do it because they're like i don't want to make the driver mad if i make him mad he's gonna quit and now i gotta load i gotta go pick up that i don't have a driver for so do you see i mean it's tricky you don't feel like you have leverage it sounds like wait so level set those expectations before the first load is even picked up right like it's great that's what yeah that's in the other that's in the interview

[00:43:07] yep and that's what we do when we hire people here is we say these are the expectations like this is exactly this is what you're signing up i don't want to give you false impressions yeah yeah it's so it's the only way it works so well an example for a trucking company would be a bigger companies have this where they have recruiters right and if you have to have recruiters i should kind of tell you something about how you're good you are keeping that's one that's a whole other forward segue yeah all right it's a whole other podcast but the yeah you'll the recruiters gets paid to

[00:43:36] bring people in get get butts and qualified butts in seats right and so like if i'm a driver and i say look i only want to go to texas or florida and back i don't ever want to go to the upper east i don't want to go to new york and philadelphia and boston because those streets are about this wide and they're horrible to get through and i want to lose a whole day making one delivery on staten island yep i lose a whole day which is absolutely true and so the recruiter goes yeah no problem

[00:44:03] we never said i mean the third week they worked there right you can finish the story you know oh yeah we're gonna hot load it's a really good customer we gotta have you take this then you wonder why you have turnover it's a scooby-doo mystery man but it may never be solved man michael this is this is great these are great nuggets and it's a very informative i'm sure a lot of people are gonna love this episode we have one more question before we get into our game that we

[00:44:28] want to play with you looking ahead do you see the trucking and trucking payroll do you see any new challenges or innovations that are going to be on the horizon that's that's a good question i thought you were going to ask me about autonomous trucks so throw that in there autonomous i will i my prediction on autonomous trucks is this there's going to be an accident

[00:44:56] at some point there are there are accidents with trucks and with cars every single day there's going to be an accident with an autonomous truck and there's going to be a fatality and everybody's going to get scared off we haven't built a nuclear power plant in hell alone since what 1979 right i think i could be wrong about this but to my memory but three mile island would scare us all and we didn't build a nuclear power so i think i will be long retired before autonomous trucks have

[00:45:24] any kind of significant foothold because they got to work past all the limitations there's some small uses for them but i don't see that happening but that's that that innovation you know that's one thing that's coming i think we're starting to see a little bit of ai creeping into trucking a little bit trucking people are not early adopters i used to joke with my one of my bosses at the old trucking company if it was up to him refrigerator freight would still be pulled would be horse and buggy with ice on it because he was old school he was and he was super like his intuition was

[00:45:54] always on like he was right about just about everything so but he was never one to watch the new things so i'd tease him about that and i think trucking's a lot of that but we're starting to see a little bit of ai in even things like how you hire a driver you know you asking better questions in the interview making sure you've got the right fit you know you can because ai right i know yeah it's not perfect but it doesn't care about your feelings specifically if you don't like the

[00:46:22] answer it's going to just say the data suggests this and so you can continue to deny it if you want or you can complain about chance gpt or whatever you want but you know at some point you will want to be better and so the companies that want to be better they're gonna they're gonna lean into it a little more even on the easy stuff you know like i said uh how much should i pay a driver which by the way we have a we put out our article every month we have a driver pay index we can give you the

[00:46:47] where the average is gone since january 2020 every month up and down so we put it out usually the first week of the month so i'll probably put it out this weekend for june just because it's data that we have that we can give out because it's everybody aggregated so you don't know yeah what whose data it's everybody but yeah i think you're gonna see i think you're gonna see ai coming in more it's gonna come in more to the like the tms systems and things like that i know they're all trying to work with it it's gonna come into their bidding process you know if you're a fleet that's big

[00:47:13] enough to be able to bid direct freight you know you're bidding what should i bid for this lane and so it's going to be able to the jgpt is incredible for aggregating a lot of data in a quick amount of time a very quick aside my daughter's buying a condo you know she's going to get her master's degree and she's buying a condo in st louis where she's going to go and we fed all of the condo association docs into jgpt

[00:47:40] and like 10 seconds later it said look out for this and look out for this but this is really good and this is really good and i'm like man it was because it's like a couple hundred pages right yeah and i'm like i don't i'm not a real estate guru i'm not gonna know i don't know how much of reserve they're supposed to be and all that so i'm just saying like they can take that data and they can suggest they can suggest alternatives for you i think but like the tmss are doing that too and that's i think where you're really going to see it because they're going to they'll start

[00:48:08] suggesting routes for you they'll start telling you which routes are better for you and things like that you've got to be willing to listen you got to be willing to learn and you got willing to accept it and again here if it fights your intuition then you have to you just got to reconcile maybe that maybe ai is wrong on this one maybe it's right you know that's and that's a fair question you're the you still get this choose we're not quite the 2001 the movie yet right with hell taking over michael is coming soon but not yet management service or so

[00:48:35] hey this is william tencup work to find hey listen i'd like to talk to you a little bit about inside the c-suite the podcast it's a look into the journey of how one goes from high school college whatever all the way to the c-suite all the ups and downs failures successes all that stuff get a listen subscribe wherever you get your podcast transportation management software truck you can call trucking manager that's fine too

[00:49:02] yeah it's where you do all your work you plan your loads in there you just you know which drivers are in which loads and you know you do your invoicing in it you'll do your driver settlement in it where you decide how much you're paying the driver all that data is right there even if the driver gets an advance which is very common in trucking as opposed to other industries where it's where advances are kind of the exception scale of the rule in trucking because it went back to the went back to the days when before i passed when you had to pay for tolls so a driver going to california

[00:49:28] could would be able to get money on a fuel card to pay for tolls and scales and stuff like that now it just becomes now it's just they just do it they're just used they're just used to get 200 bucks cash before they go so yeah but yeah you know that's wow it's gonna be it's gonna be incredible we have this little game that we play just to you know break it up a little bit and beyond it's called this or that you can both either neither then you know

[00:49:52] well you want to start it off and i'll finish it yes so number one do you prefer coffee or an energy drink okay what's your goal energy drink really it's even just like the buy drinks with this little caffeine in them i don't i'm a weirdo who doesn't drink coffee all right no there's nothing wrong with that okay do you rather be on the road or in the office okay and my last one in the office

[00:50:20] for per diem paperwork or tax filings oh wow oh per diem my baby all right yeah because i get to see people money with that that's why yeah diy do-it-yourself payroll or outsource solution for i outsource and i know i will admit i have i've got a side on this that benefits me

[00:50:51] right okay yeah i gotta scale it on this but yep the trucking companies have too many other things to do yeah don't screw around with this let us do it for you you know 50 bucks a week 60 bucks a week or whatever it is for a small trucking company just let us take care of it before you spend your time getting a better load you get a better load that pays you an extra 100 bucks you paid for early morning drive or an evening drive

[00:51:14] oh all right evening drive okay all right i'm not a morning person maybe it's the coffee thing i don't know but last one dodger stadium yes dodger stadium i'll leave you the rest dodger stadium you can you see i got that that's jackie robinson there oh that's kirk gibson there i'm gonna turn my care

[00:51:41] rush way with the motorbatch in jersey i'm gonna uh uh dotter stadium i'll leave i'm gonna dodger fans as i'm so little i mean look we ended off one i'm looking forward to your podcast please keep in touch you know if you need any help anything yeah thank you come on bring us on as thank you chop it up about things and let us you know i'm looking forward to that but also

[00:52:10] where can folks find you at what is all your information let us know how to find about your company yeah our website's truckingpayroll.com i love it as we said we have a lot of free tools that you can take absolutely and they're like six or eight questions i think we have seven quizzes in there and if you see a quiz that you think should be there you reach out to me i'm gonna add it because

[00:52:36] if it's worthwhile i think those can be so helpful our mission at our company is to help trucking families so if you called us if you called whoever answered the phone we're gonna have call trees i hate call trees so we're not doing that but if you just said hey what's your mission what's your company's mission wow they should without hesitating should go to help trucking families and that's what all this stuff all these quizzes all that stuff is to help trucking families so truckingpayroll.com is the

[00:53:00] mothership we have socials at linkedin i think i think it's at trucking payroll on linkedin like linkedin.com slash whatever slash trucking payroll or just look at my name michael ritzema we've got youtube at trucking payroll we've got tiktok at trucking payroll we've got instagram i think still trucking payroll yeah i think we do that one i don't know is there a new one out you guys are younger than me is there another social that came out last week yeah okay i don't have blue sky yet i guess

[00:53:30] maybe i gotta go add that the ones you said so i i think i signed up for it for me personally once but i don't even know what my login is so and right after i don't even know wrong i have no idea so watch things somebody probably reported him i'll tell you tiktok's been a revelation for me i am too old to really have understood it at first but i get more interaction from truck drivers on tiktok than i get anywhere else i had a the video

[00:53:59] that you guys probably saw i put on tiktok and i had like eight different drivers comment on it which for me is a lot and then i had one of them when he asked questions he's like no man this is this way and this is this way and so i made a video and just released it today for his name's brad i'm like brad you had questions i got answers buddy and i'm like i am so glad i mean i disagree with it what his premise was but i was so glad that he spoke up you know there's we're not gonna we're not gonna get on

[00:54:26] the same page if we don't tell each other what page we're on so yeah so it was it i hope that brad if you're watching this i hope that you felt the love because i had nothing but love the fact that you had your opinion on that and i just assumed too that he's just out driving across country bringing stuff that i need so i will nothing but good things for him but i was just so i mean just the reaction of it you know i thought that was great so we made a second video we put it in the car i think we put a link in the comments of the first video so that he could find it and so i'm waiting

[00:54:56] to hear what he says yeah but yeah so yeah on the socials or a trucking payroll twitter oh we have twitter the x whatever you call it just call it x now all right yeah we got that too a trucking payroll but yeah fun just find us and i would encourage if you're a trucking company listening to this and you have any question that gets near payroll if you call us our numbers on our website if you just if you have a question we're going to answer your question and then we might talk to you

[00:55:23] about if you want to work with us or not but you can hang up the phone at that point right if you don't want to but i'm just saying our mission to help certain families and that's everybody so you know that's all we that's nothing brings like this prudium thing it's why i'm so excited about it is because you can change lives and i get to be a small piece of that the accounting people almost never get to change lives the payroll people right we all the best we get to do is bail them out when they forgot to file the 941s for three years well we could bail out of that we might be

[00:55:50] able to get the taxpayer advocate involved or something to try and get them out of some penalties which is still a win man like the accounting department can be the hero and put money in people's pockets in the drivers and the owners they are both the winners the losers of the irs and we're not really worried oh man thank you so much for joining us today and please keep in touch i will once you start posting your episodes and yes i'll talk to you on the show

[00:56:16] this is your home like absolutely likewise man everybody this is the home of the greatest payroll folks in the world and you're welcome back anytime thank you so much i anytime i can be of service to your audience i'm here for you i'm a phone caller awesome awesome text away thanks folks and please go share subscribe like tell a friend to tell a friend if you got folks in the trucking industry

[00:56:42] please share this with them yes so much that they can learn from this episode and till the next time we love you folks tiktok sagt jetzt investieren reddit sagt schnell verkaufen und was sagen echte experten findet es heraus im neuen investment podcast von liquid by that smart money erhaltet ihr

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