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premiums attributable to the gross wages earned by each such
driver-employee; (4) other expenses that TLC incurred as costs of
earning such lease fee, e.g., expenses for sales representatives
and managers, legal and accounting services, and other overhead;
and (5) TLC’s profit (gross profit).
The factor was a flat rate that ranged from 1.15 to 1.25.
The factor was not broken down into component parts. Conse-
quently, no trucking company client knew how much of the factor
to which TLC and such trucking company client agreed was intended
to cover each of the various expenses associated with TLC’s
driver-leasing business (e.g., the employer’s share of employment
taxes, workers’ compensation insurance, any per diem amounts, and
compensation of persons who performed services for TLC other than
TLC’s driver-employees).
The per diem percentage that TLC used to determine any per
diem amounts of each driver-employee affected the factor that was
used to compute the lease fee that each trucking company client
owed to TLC. As discussed above, per diem amounts are not wages
for purposes of computing employment taxes, Federal and State
income taxes withheld, and workers’ compensation insurance
premiums, and a higher per diem percentage resulted in a lower
wage base for purposes of computing such amounts. A lower wage
base resulted in lower employment taxes, Federal and State income
taxes withheld, and workers’ compensation premiums, which, in
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