Transport Labor Contract/Leasing, Inc. & Subsidiaries - Page 12

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          ranged from zero to 33 percent.                                             
               Upon receipt of a batch report, TLC inputted the information           
          contained in that batch report into its computer system and,                
          based on that information and other information in its computer             
          system (e.g., the per diem percentage, applicable employment tax            
          rates, Federal and State income tax withholding), computed with             
          respect to each driver-employee gross wages, any per diem                   
          amounts, Federal and State income taxes withheld, the driver-               
          employee share of employment taxes,16 payroll deductions for                
          employee benefits, and net wages.17  Per diem amounts are not               
          wages for purposes of computing employment taxes, Federal and               
          State income tax withholding, and workers’ compensation insurance           
          premiums.  TLC determined each driver-employee’s gross wages by             
          reducing the batch report lump sum amount for such driver-em-               
          ployee by any per diem amounts that TLC determined for such                 
          driver-employee.                                                            
               With respect to each driver-employee, for each payroll                 
          period TLC was obligated to, and did, pay such driver-employee              

               16We shall refer to any tax liabilities imposed on either              
          the employer or the employee with respect to a driver-employee’s            
          gross wages under the Federal Insurance Contribution Act (FICA),            
          the Federal Unemployment Tax Act, or SUTA as employment taxes.              
               17We shall refer to the net amount of wages to which a                 
          driver-employee was entitled, after any reduction for such                  
          driver-employee’s share of Federal and State employment taxes,              
          Federal and State income taxes withheld, and payroll deductions             
          for employee benefits (e.g., health insurance, a sec. 401(k)                
          plan, or a sec. 125 flexible benefit plan), as net wages.                   





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