Why Must I Follow All The Rules?

Jim Luff
Posted on July 29, 2009
REGULATORY SOUP: Our business is governed by the PUC, CHP, LAX, Labor Board, IRS, a host of airports, and city and county government agencies. It seems as if you have to be a rocket scientist just to keep up compliance with every agency that rules us.
TOO MANY RULES: I was reminded of this recently as I stopped to pump gas in my car. A beat up old bus pulled up to the pump next to me and began filling up. The bus looked as if it could have been a mid 90s limo bus. The bus had a company name painted on its side. However, it did not have TCP numbers or California DOT numbers or any other type of numbering to indicate it was registered to provide passenger transportation.
I casually asked the driver about the bus and he told me it is used to transport workers from the city out to the oil fields. I asked him if he was the regular driver and he said he was just part of the work crew and they took turns. I asked him if the bus required a special license to drive and he replied, “Not that I know of.” !!! The bus had about 20 seats.
That means this bus never has to go through the same rigorous annual inspection that my buses go through with the CHP. This driver is probably not enrolled in an expensive drug and alcohol testing program. There are probably no maintenance records kept on this bus, and as long as the engine fires up and a person with a heartbeat is there to drive it, it must be OK?!
Today I logged on to a popular limo forum and found a lively discussion about pay methods. It seems that despite federal labor laws that require a minimum hourly wage to be paid and work time in our industry to be calculated by the hour, people just make up their own rules and pay methods. Operators with employees fail to pay their portion of payroll taxes, withhold payroll taxes, pay into Social Security, or all the other things that I am required to do and track. I must comply with Labor Law, DOT Hours of Service laws, weekly and quarterly payroll filings, and worker’s comp premiums and their calculations. Mistakes can be very costly.
Maybe I follow the law because I don’t have the balls to flagrantly disregard them. Maybe I am afraid of getting caught or perhaps it is the experience of getting caught when I was not properly educated of various aspects of our business. For instance, the IRS taught us a painful and expensive lesson when I thought it was ok to have independent contractors driving our company-owned vehicles. The drivers agreed, we agreed, we signed a written agreement —  and I thought that was cool. Why? Because everyone else was doing that in 1990.
By the time the IRS, along with the state of California, were done educating us (four years later), we had to mortgage a fully paid mountain home. Then there was the time that we crossed the California/Nevada state line and did not know you had to have federal DOT authority to do that. $1,600 later, after paying our fine, we became educated on DOT regulations and we now hold DOT Authority subjecting us to a grueling DOT audit. My friend Steve Levin of Sterling Rose Transportation in Temecula endured a two-day visit and as he can tell you, it ain’t pretty and you better have your ducks in a row.
With the proliferation of gypsy operators who operate without insurance, without operating authority, and without regard to the laws that govern legitimate operators, it makes me wonder why I have to follow all the rules. It seems that the more I try to comply, the more I appear on various government radar screens while the guys who don’t follow any of the rules never even show up on the radar screen because they have no idea the illegals even exist!
Even a mere phone call to report such illegal activity once again puts me on their radar screen. I once called the PUC to report an illegal operator in my area. I provided all the required information to put a stop to this company. The PUC sent someone from a field office two hours away. The first company she came to see was ours. She said as long as she drove two hours and was in the area, she might as well complete a routine audit of our business. I won’t call and report anyone again.
I have always had good inspections whether it was the PUC, CHP, or even an insurance auditor. All “auditors” have always given me very positive feedback on our operations. Well of course they would! I live in constant fear that I am going to forget to cross one “T” or dot one “I” or forget one single thing such as initialing a DMV print-out before filing it in a driver’s personnel jacket. Then there are those who have no such troubles because they don’t follow any rules.
Is there something wrong with this picture?
— Jim Luff, LCT Contributing Editor

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Jim Luff Contributing Editor
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