The Federal Leasing Regulations are often referred to within the industry as the “Recipe Book” for the typical independent contractor/owner-operator business model. The Regulations provide the ingredients that must be contained in a contract between the motor carrier and the owner-operator, and very often require that the contract “clearly specify,” “must specify,” or “clearly state,” certain substantive content related to those ingredients. The Regulations also provide guidance regarding the conduct of a motor carrier with its owner-operators, the content of which is not required to appear in the contract. Thus, the objective is to ensure the contract and conduct comply with the Regulations and each reflects the other.
Section 376.12(h)—Chargeback Items—is a particularly important ingredient. Under this subpart, the contract must clearly specify all items that may be initially paid by the motor carrier, but ultimately “charged back” or deducted from the owner-operator’s compensation at the time of payment or settlement, including how the amount of each item will be computed.
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