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When you quit and end your contract with a trucking company as an independent contractor or lease operator, what happens?
Ideally, you’ve given proper notice, and you’ve left the company in good standing. But now what? What happens to your accounts? When do you get your final settlement?
Things happen a little differently when you’re an independent contractor compared to a company driver. A company driver doesn’t have to cover expenses like maintenance and fuel costs and there are laws in place that ensure company drivers are paid quickly following their last day.
The same rules aren’t in place for independent contractors. It may take upwards of several months to get your final settlement. And if you leave on bad terms — either trashing your truck or abandoning it altogether — you could end up owing the company. No driver wants that.
There are also different rules depending on whether you’re leasing through the company you’re driving with or you own your truck (or are leasing with a different company).
Here at Anderson Trucking Service (ATS), one of my tasks is to ensure drivers are not only paid properly but also to make sure they understand how they’re being paid. I’ll help you, as an independent contractor, understand what happens to your accounts and discuss any loose ends you need to take care of with your trucking company before you leave a carrier.
In this article, you’ll learn:
- What you need to do before you end your trucking contract
- What tasks you need to take care of after you end your trucking contract
How to Quit Your Trucking Company in Good Standing
You might be wondering why I’m providing advice on how to quit and end your trucking contract. After all, I’m not encouraging drivers to quit. However, I know some drivers are ready to move on — whether to retirement, another carrier or another field of work entirely — and they aren’t sure how to leave in good standing.
Sometimes a driver leaves because they think the pastures are greener on the other side, only to find out they liked their old company better. A lot of drivers tend to go back to companies they’ve quit, and if they didn’t leave in good standing, they may not get hired back. Even if you feel as if the company has wronged you, it’s always best to leave on good terms.
These tips will help you end your trucking contract without stirring up any trouble and will help you take care of loose ends effectively.
Read Your Contract
Before you even think about putting in a notice to end your contract, you need to go through your contract with a fine-tooth comb. It’s a good idea to do this before you even sign a contract, but it’s also important to do it before you quit.
Circle any instances of the word “fine,” “due” or “fee” and anything similar. If you quit your company right now, with your contract the way it stands, will you be subject to any fees?
Some companies may have fees if you end your contract early. Some companies may financially penalize new drivers who were contracted to work with them for a set period in order to pay their trucking school off if they quit before that time is up. These fees may encourage you to stay with the company longer to avoid that fee.
Remember, every contract is different. You may or may not have to deal with any of the fees I mentioned above. Just make sure you review your contract and know what you may have to pay for so there are no surprises when you quit and receive your final check.
Give a Notice
Before you leave your trucking company, you, of course, need to let your dispatcher/driver manager know so you can arrange when your last day will be.
It’s good practice to give two weeks’ notice. This will give you plenty of time to get routed back to headquarters to return any company equipment you may have used.
Talk to Driver Services
Not only should you talk to your dispatcher once you quit, but it’s also important that you speak with the driver account department or the driver services department. It may be called something different at the company you’re contracted with. Essentially, whoever you’ve spoken to regarding contract questions during your time with the company is who you should speak with at this time.
It’s important to let them know that you’re leaving or you’ve already left. Inform them of any forwarding addresses and phone or email changes. This information is important; you want them to be able to reach you when it’s time to send your final check and paperwork.
If you have any lingering questions — especially about pay — as your contract comes to a close, now is the time to ask them.
If You’re Leasing with the Company…
If you’re leasing with the company you’re driving with, there are a few extra steps and details you need to consider. You first need to consider if you’ll be penalized for ending a lease contract early. Additionally, you may incur fees for truck damage and any maintenance fixes that need to be completed before another driver can be in that truck again.
Then you need to ensure you arrange with your dispatcher to bring your truck to an authorized location. You never want a truck abandonment on your record — whether it’s a driver report or a financial report.
A truck abandonment occurs when you don’t drop your truck off in an authorized location. Maybe you leave it in a random parking lot, keys in the ignition. Maybe it’s parked on the side of the road. Maybe you just leave it at the wrong terminal.
Regardless of where you leave it, it can be bad news for you if you don’t leave your truck and trailer at the place you and your dispatcher agreed upon. The carrier will eventually have to go retrieve that truck and the fees for doing so will be charged to you. This can make the process of closing your accounts more complicated (more on that below).
It will also appear on your driving history report as a truck abandonment and most carriers won’t hire you with a history of abandoning your truck.
When you drop your truck off, you might need to be present for a truck inspection — during which time you’ll return any company items you were using.
When Do Independent Contractors Get Their Final Settlements?
When you work with a trucking company, you’ll probably have an account or two with them. This may include a maintenance account, a reserve account or an escrow account. While the maintenance account is specifically used to cover maintenance expenses if you’re leasing with the company, the rest function like savings accounts and can be used as such.
Before you can receive the money from those accounts, they have to go through a waiting period.
What happens to your accounts when you quit depends upon a few things — namely, whether or not you leased your truck with that carrier and whether you left your truck in good standing.
When an independent contractor or lease driver leaves a company, there is a contract waiting time or termination close period. During this time, the driver services department (and probably the leasing department) looks at your accounts to determine what you’re still owed and what expenses you may still owe the company.
This period could last between 15 and 90 days depending on the contract you’ve signed and with which carrier. In many cases, you’ll be required to wait that full 90-day period. This can be incredibly frustrating and requires a lot of patience on your part. After all, you’re waiting on your money.
After the waiting period is over, the company will send you documentation that includes all the account closing details, including the balance at the time you left the company and the time of the account closing. Included will be a list of all the debits and credits that occurred on the account. If you’re owed money, you’ll also receive a check at this time.
When you receive these documents, you should thoroughly read through them to ensure you understand them clearly. Give the carrier a call if you’re confused. Ask questions to understand what each debit and credit mean on your account. It’s your money, and you need to make it a priority to ensure it’s handled correctly.
Debits and Credits
There are several different debits and credits that may come out of your account.
For starters, you’ll be owed the money for any loads you may have hauled just before your last day. For instance, if you hauled a load on the day you quit, you’d be owed payment. You may also receive bonuses at this time.
As far as debits go, there are maintenance costs, fuel advances, unpaid citations, insurance costs, advances, and fuel and mileage tax to consider. In some cases, payments on these accounts and services aren’t paid until the month is over. For instance, your December insurance might not be paid until the first of January. This example is part of the reason why there’s a waiting period before you receive your final settlement.
If you leased your truck from the carrier, the biggest thing you have to think about debit-wise is maintenance costs. The truck you leased has to be brought back to tip-top shape for the next driver. If your truck was well-maintained, you shouldn’t have much to worry about. If, on the other hand, you rode your truck hard, did damage to the interior and exterior and left much-needed fixes to go undone, it’ll be another story.
The money needed to return your truck back to good shape will be taken from your maintenance account. If you don’t have enough money in your maintenance account — and you don’t have enough credits or money in other accounts to reconcile the account — you may very well owe the company. Instead of receiving a check in the mail after 90 days is up (or a direct deposit), you’ll be getting a bill.
I know what you may be thinking. I’ll just ignore that bill! Not so fast!
If the bill goes unpaid, especially if it’s a significant amount of money owed because you abandoned your truck, the company has every right to report it to the financial bureau. If that happens, a debt will show up on your credit report. This debt will lower your credit score and it can be much more difficult to get approved for a private loan.
If you do end up with a bill, call the carrier. Discuss the charges. There’s a chance they may negotiate with you. After all, they’d rather receive some money than nothing.
Don’t Make These Mistakes as a Driver
It can certainly be tempting to quit in the heat of the moment, but it’s never a good idea. Taking the time to read your contract, put in a notice, talk to the driver department and drop your truck off in an authorized location will ensure you leave that company in good standing. If you do ever decide to work for them again, you’ll have a better chance of being rehired.
Remember to advocate for yourself and keep the lines of communication open if you get your final check and don’t understand the credits and debits listed. It’s your money and you have a right to understand what’s happening with it.
To make the transition from one company to the next easier, there are some additional tips you should follow, like getting your finances in order, organizing your things and cleaning out your truck.
