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Trucking & Transportation Companies: Payroll Mistakes to Avoid (2026)
The costliest payroll mistakes in trucking companies are misclassifying OTR drivers and local drivers, leaving per-diem pay for drivers out of the overtime regular rate, and missing the trucking company tax rule cited here. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Mistake 1: classification
Whether a driver is an employee or an independent contractor under the FLSA turns on the economic reality test in 29 CFR part 795, which weighs six factors including control, investment and permanence; receiving a 1099 or signing a contractor agreement does not by itself make a worker a contractor. The Department announced a proposed rule to revise this test on February 26, 2026 (91 FR 9932).
Mistake 2: hours and the regular rate
Section 13(b)(1) of the FLSA provides an overtime exemption for employees of motor carriers and motor private carriers who work as drivers, driver's helpers, loaders or mechanics and whose duties affect the safety of operation of motor vehicles in interstate or foreign commerce.
The small vehicle exception restores FLSA overtime in any workweek in which the employee performs work on motor vehicles weighing 10,000 pounds or less, except vehicles designed to carry more than 8 passengers for compensation, more than 15 passengers, or placarded hazardous materials.
Mistake 3: the trucking company tax item
For travel on or after October 1, 2025, the special meals and incidental expenses rate for the transportation industry is $80 per day within the continental United States and $86 per day outside it. Notice 2025-54 supersedes Notice 2024-68, which covered October 1, 2024 through September 30, 2025.
What catches them
A pay code review at setup, an exemption file per employee, a regular-rate flag on every pay component, and a deposit calendar that does not depend on one person remembering. Failure-to-deposit penalties run 2 to 15 percent; back overtime runs at time and one half plus an equal amount in liquidated damages.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- Whether a driver is an employee or an independent contractor under the FLSA turns on the economic reality test in 29 CFR part 795, which weighs six factors including control, investment and permanence; receiving a 1099 or signing a contractor agreement does not by itself make a worker a contractor. The Department announced a proposed rule to revise this test on February 26, 2026 (91 FR 9932). [DOL Fact Sheet #13]
- Section 13(b)(1) of the FLSA provides an overtime exemption for employees of motor carriers and motor private carriers who work as drivers, driver's helpers, loaders or mechanics and whose duties affect the safety of operation of motor vehicles in interstate or foreign commerce. [DOL Fact Sheet #19]
- The small vehicle exception restores FLSA overtime in any workweek in which the employee performs work on motor vehicles weighing 10,000 pounds or less, except vehicles designed to carry more than 8 passengers for compensation, more than 15 passengers, or placarded hazardous materials. [DOL Fact Sheet #19]
- For travel on or after October 1, 2025, the special meals and incidental expenses rate for the transportation industry is $80 per day within the continental United States and $86 per day outside it. Notice 2025-54 supersedes Notice 2024-68, which covered October 1, 2024 through September 30, 2025. [IRS Notice 2025-54]
Read the full guide to how to correct a payroll error, and the rest of the trucking company payroll library.
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Frequently Asked Questions
What is the most common classification mistake in trucking companies?
Whether a driver is an employee or an independent contractor under the FLSA turns on the economic reality test in 29 CFR part 795, which weighs six factors including control, investment and permanence; receiving a 1099 or signing a contractor agreement does not by itself make a worker a contractor. The Department announced a proposed rule to revise this test on February 26, 2026 (91 FR 9932).
What wage and hour mistakes does DOL see in trucking companies?
Section 13(b)(1) of the FLSA provides an overtime exemption for employees of motor carriers and motor private carriers who work as drivers, driver's helpers, loaders or mechanics and whose duties affect the safety of operation of motor vehicles in interstate or foreign commerce.
Which trucking company tax rule is most often missed?
For travel on or after October 1, 2025, the special meals and incidental expenses rate for the transportation industry is $80 per day within the continental United States and $86 per day outside it. Notice 2025-54 supersedes Notice 2024-68, which covered October 1, 2024 through September 30, 2025.
What does managed payroll cost for a trucking company?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Per-diem pay for drivers, owner-operator vs W-2 classification and DOT compliance are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Trucking & Transportation Companies. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage and Hour Division
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