Transcript: Testimony by Chris MacKrell on the use of independent contractors & payroll fraud – Nov. 12, 2013
Partial transcript of the verbal testimony given by Chris MacKrell, co-founder of Custom Courier Solutions in Rochester, New York, on the benefits of lawfully hiring independent contractors. The Senate Health, Education, Labor & Pensions subcommittee on employment and work place safety hearing was held on Nov. 12, 2013:
Chairman Casey, Ranking Member Isakson, and the committee. I want to thank you both for affording me the opportunity to appear here today. I provided the committee with a written testimony of both my business and our industry, but I wanted to share with the committee this afternoon my personal perspective the important role independent contractors play in the economy.
After graduating college in 1982, I found myself ready to start my career. As you may recall, the country struggled with tough economic times not dissimilar to what the country is going through today. In my search for a job, I was presented with an opportunity to start my career as an independent contractor working for a small courier company in upstate New York.
Over the next three years, I operated as an IC, learning the skills necessary to succeed in the same-day delivery business.
After 23 years working in the industry, I find myself once again with the opportunity to operate my own small business. So in 2006, with a partner, I started Custom Courier Solutions.
Since the first business opportunity was to operate as an independent contractor for a much larger courier company, for the first six months, revenue from that single customer was kept CCS alive.
As time passed, we developed our own customer base, and as they say in Saratoga Springs, New York, we were off to the races.
Based on my experiences gained as an IC, we have built our company. Our projected revenue is expected to exceed $22 million in 2013. We support a $6 million annual payroll. More importantly, our company created over $13 million in annual revenue for the independent contractors that work for our organization.
CCS now operates in the Northeast. We have offices in Fairless Hills and Scranton, Pennsylvania. We provide last mile solutions for the medical and pharmaceutical industry, critical parts, industrial auto supplies, banking, retail, and home delivery.
CCS relies on the IC business model to meet our customer needs. Our 200 plus contractors and our 156 traditional employees work together to support the needs of our 150 plus customers. We have accomplished this despite one of the nation’s toughest economic environment in decades.
Congress must not hinder the entrepreneurial spirit and recognize the great potential and opportunity being an IC can provide.
Like Paul…of Rochester, New York, a 30-year-old recent immigrant from Africa, who in 2011 started providing services to CCS with a single van. Today, Paul has a fleet of three vehicles. He’s operating his own small business and is living the American dream.
His story and my story are not unique.
CCS is a member of the Customized Logistics and Delivery Association – the CLDA. Our association focuses on the last mile of the world supply chain. My testimony today is submitted on behalf of CLDA’s 425 members.
As an industry with a long history of reliance on IC for our mutual success, we are keenly aware of the need to properly classify individuals. CDLA members are urged to follow industry best practices as well as guidance from both federal and state agencies to determine classification. We take these decisions seriously.
At CCS, we ask every potential IC to complete a questionnaire that details their rights, expectations of being an IC, including those questions relate to the requirements that they file both state and federal taxes.
When we engage in an IC, we execute a written contract. We issue them 1099 forms for all services provided. We require them to provide us with proof of insurance for both themselves and their vehicles.
Previous legislations have focused on the rights of the misclassified worker but has never extended to the rights of individuals who choose to operate as independent contractors.
Like Don…a 70-year-old retiree from Rochester, New York, who has been an IC since 1995. As Don said, “I get to set my own schedule, work when I want, and meet my individual needs and the energy levels that will allow me to work.”
Or Cathy [sp]…a 52-year-old mother from Scranton, Pennsylvania, who has been an IC for us little over a year. As Cathy said, “I have finally found a way to contribute to my family’s financial well-being while at the same time not having to give up the ability to participate in my family’s activities.”
In closing, I would like to ask as you consider legislation you look at the full picture, include considerations for those who choose to be independent contractors. Tens of thousands of people everyday choose to operate as an independent contractor in pursuit of the American dream. The right to do so must also be protected.
Chairman Casey, Ranking Member Isakson, I thank you for your time and consideration.
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- WhatTheFolly.com: Transcript: Remarks by Sen. Johnny Isakson on the use of independent contractors & payroll fraud – Nov. 12, 2013
- WhatTheFolly.com: Transcript: Testimony by Matt Anderson on the use of independent contractors & payroll fraud – Nov. 12, 2013
- WhatTheFolly.com: Transcript: Testimony by Danny Odom on the use of independent contractors & payroll fraud – Nov. 12, 2013
- WhatTheFolly.com: Transcript: Testimony by Cathy Ruckelshaus on the use of independent contractors & payroll fraud – Nov. 12, 2013
- WhatTheFolly.com: Transcript: Testimony by Chris MacKrell on the use of independent contractors & payroll fraud – Nov. 12, 2013
- WhatTheFolly.com: Transcript: Q&A w/ Sen. Al Franken on the use of independent contractors & payroll fraud – Nov. 12, 2013
- WhatTheFolly.com: Transcript: Q&A w/ Sen. Johnny Isakson on the use of independent contractors & payroll fraud – Nov. 12, 2013
- WhatTheFolly.com: Transcript: Q&A w/ Sen. Bob Casey on the use of independent contractors & payroll fraud – Nov. 12, 2013
- Senate Health, Education, Labor & Pensions Committee: Subcommittee Hearing – Payroll Fraud: Targeting Bad Actors Hurting Workers and Businesses – Nov. 12, 2013
- Treasury Inspector General for Tax Administration: Employers Do Not Always Follow Internal Revenue Service Worker Determination Rulings – June 2013