How do I check if a same-day delivery firm’s drivers are employees or contractors in practice?
Compare what the contracts say with how work actually happens. Ask who sets schedules, who provides vehicles and equipment, whether drivers can turn jobs down or work for rivals, and how they are paid. Then ask a lawyer to assess the pattern, since a label alone does not settle it.
Many delivery firms call their drivers contractors, and the paperwork may say so. What matters to a buyer is how the relationship works day to day. Start by collecting the signed agreements, then set them beside what you observe and what the drivers say.
Look at control. Does the firm set start times, assign routes, require uniforms or give instructions about how to deliver? Can a driver refuse a job without penalty, send a substitute or work for another company at the same time? The more the firm directs the work, the more the label may be questioned.
Look at the money and the tools. Who owns the vehicle and pays for fuel and insurance? Are drivers paid per delivery or an hourly rate? Do they carry their own business registrations and issue invoices? Ask the seller whether anyone has ever challenged the arrangement, whether through a complaint, an inquiry or an audit. A past challenge, or a quiet settlement, tells you how exposed the company is. Your lawyer and accountant can tell you what the pattern means and how it could change after you buy.
Key takeaways
- Set the signed agreements beside what drivers actually do each day.
- Check control: schedules, routes, refusal of jobs and work for rivals.
- Ask whether anyone has challenged the arrangement before.
- Get a lawyer and an accountant to assess the pattern before you commit.
Related reading
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Succession
Financing
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentHow to reduce employee turnover
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