Auto dealers frequently use car shuttlers to deliver vehicles to a customer, auction, or another dealer. Dealers have historically treated the car shuttlers as independent contractors and have not paid Michigan Unemployment Tax on their compensation. The Michigan Employment Security Commission (MESC) has instructed its auditors to treat car shuttlers as employees, and compensation to them as wages subject to the Michigan Unemployment Tax. However, the MESC has acknowledged that although the MESC policy is that car shuttlers are employees, a car shuttler may nevertheless qualify as an independent contractor. In making its determination, the MESC will look at all of the facts and circumstances of each case to determine whether a car shuttler is an employee or an independent contractor. In two cases, auto dealer car shuttlers were determined by the MESC to be independent contractors and not employees.
Dealers should familiarize themselves with the criteria that will increase the likelihood that car shuttlers will be treated as independent contractors for MESC purposes, and select car shuttlers that meet these criteria.
This article first appeared in Car Shuttlers and was published by the Michigan Association of Auto Dealers, in their Fast Facts publications. To contact Edward Castellani J.D., C.P.A. of Fraser Trebilcock please contact him directly at firstname.lastname@example.org or 517.377.0845.
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