Day with DISA is DISA Global Solutions’ annual drug testing symposium, which welcomes a number of industry experts to present on various trending topics and give advice to attendees for drug testing policies. Employers in the transportation industry were able to get help in understanding the complexities of managing their compliance needs.
At Day with DISA 2019, our very own general manager, Charles Farone, discussed Understanding and Applying Transportation Compliance Best Practices in our DOT/transportation compliance track. This session focused on helping employers with effectively managing the many moving parts of their transportation compliance requirements and learn why it’s so important to stay up-to-date with their fuel tax reporting, operating authorities, and Hours of Service (HOS) compliance.
During the presentation, Charles emphasized three important transportation compliance topics that are pertinent for employers to fully understand and implement: fuel tax compliance, licensing and permitting, and Hours of Service compliance.
Fuel Tax Compliance
A fuel tax is a state/provincial tax that’s levied on the sale of fuel at the pump. Under the International Fuel Tax Agreement (IFTA), qualified carriers are required to file a quarterly fuel tax report which distributes apportioned tax to member jurisdictions based on where fuel is burned. It’s extremely important for carriers to maintain knowledge and apply best practice recordkeeping requirements to remain in compliance and minimize audit risk. Failure to meet auditing requirements could result in additional tax due, including a hefty penalty and interest.
The best way to approach fuel tax compliance is to think like the auditors to best meet their needs and requirements; mimic what the auditor will do before they do it. An auditor can deem you non-compliant for the following:
- Carrier is unable to produce any source documentation
- Carrier is unable to produce odometer readings
- Distance accounting system is found to be inadequate or produces output in consistent error
- Unable to produce GPS breadcrumb trail data (Lat and Long readings) when utilizing GPS vendor state distance summaries/reports
- Auditor finds that source documentation illegible, not able to interpret
- Auditor finds missing distance or fuel transactions, or ID’s continuity gaps
- Auditor finds material under/over reported mileage (error factor)
- Returns not prepared in accordance with jurisdictional guidelines
If a carrier is noncompliant, then they can be defaulted to 4.00 MPG and will be subject to imputed additional tax, which is why It’s best to mimic the auditor to minimize audit risk. Carriers should take the necessary steps to maintain compliance best practices by:
- Finding an expert – staff in-house, outsource to TPA or become one
- Applying compliant recordkeeping
- Applying recommended data processing & audit practice
- Retaining all source data for seven years (IFTA, IRP, and IRS)
- Licensing and Permitting
The transportation industry has several requirements that are set forth by the FMCSA, USDOT, and some state DOT’s (intrastate authorities), which is why it’s so important for employers to understand what is required to set up or continue to operate. If you’re just beginning, there are a few steps you need to take to establish your operating authority:
- Register with the appropriate state or county
- Obtain an Employer Identification Number (EIN)
- Register with the US Department of Transportation (DOT)
- Apply for a Motor Carrier Number (MC#) with the FMCSA
- File a BOC-3
- Obtain insurance
- Set up your International Registration Plan (IRP) for interstate travel
- Set up an IFTA account for fuel tax compliance
- Unified Carrier Registration (UCR)
- Special permits
Once established, carriers need to avoid suspensions and fines by staying ahead of renewals, which can be done through a TPA or an in-house management system with alerts (90-60-30 days, respectively).
Hours of Service Compliance
Under the FMCSA, Hours of Service (HOS) rules are put into place to combat driving fatigue by recording the number of hours a driver has driven, as well as setting regulations on rest breaks, consecutive hours driving, off-duty time, meals, and sleeping. Carriers must comply with DOT HOS requirements, whether you’re utilizing an Electronic Logging Device (ELD), or paper logging.
To maintain HOS compliance best practices, employers need to start by knowing which rules apply to their business and contact their state, the DOT, and/or federal government for more information. Once establishing rules and regulations, it’s crucial to find the right training program and move forward with setting up an HOS management system. Whether outsourcing to a TPA or becoming an expert, carriers must gain visibility into violations, find out how often they’re occurring, and learn which drivers are causing the most frequent and/or severe infractions. Carriers must also retain log data for six months.
Staying proactive will help to prevent risks, fines, and fees. To remain proactive employers can:
- Set up a disciplinary and/or incentive plan for drivers based on compliance performance
- Keep documentation (6 months)
- Audit daily driver log data (paper and ELD data)
- Ensure drivers are utilizing ELD’s properly
- Conduct on-going training/re-education as needed
- Stay aware of your CSA scores and how HOS violations can affect them
Common HOS violations include:
- Form and Manner Violations
- Outdated Logs
- 14-Hour Rule Violations
- 11-Hour Rule Violations
- Falsification of Records
- Missing Logs
How DISA Can Help
DISA’s Transportation Compliance Team (DTC) offers a single-source solution for all of your transportation compliance needs. Our professional team members can assist you with your compliance requirements no matter what the DOT agency is; FMCSA, FAA, FRA, FTA, PHMSA, and USCG. Our services include:
DOT-Specific Services
- DOT Drug Testing
- DOT Background Check
- DOT Testing History & Previous Employer
- DOT Driver Physicals
- DOT Driver Qualification Files
- FMCSA Motor Vehicle Records (MVRs)
- FCRA Compliance
General Transportation Compliance Services
- Fleet Management & Reporting
- Licensing & Permitting
- HOS Driver Log Auditing
- Fuel Tax Reporting & Compliance
- Tax Recovery & Refund Services
- HVUT/Form 2290 Tax Renewal
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About DISA Global Solutions
Founded in 1986, DISA is the industry-leading provider of employee screening and compliance services. Headquartered in Houston, with more than 35 offices throughout the U.S. and Canada, DISA’s comprehensive scope of services includes drug and alcohol testing, background check, occupational health, and transportation compliance. DISA assists employers in making informed staffing decisions while building a culture of safety in their workplace.