Transport Labor Contract/Leasing, Inc. & Subsidiaries - Page 33

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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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Last modified: May 25, 2011