Court documents filed by a group of Southern California port trucking companies accused of fraudulently misclassifying its regular drivers as independent contractors demonstrate how these companies and thousands others like them are trying to step beyond the reach of employee protection laws and tax obligations.
According to the San Diego Free Press, the documents, filed in U.S. District Court for the Central District of California by six port trucking companies essentially argue “that whether or not they are misclassifying drivers, there is nothing the State of California can do about it.”
As egregious and unfair as that stance may seem, it’s not unusual for companies to classify regular, full-time workers as independent contractors. In fact, the vast majority of Southern California’s 12,000 port truck drivers are improperly classified as independent contractors.
Simply misclassifying truck drivers as independent contractors can provide a company with multiple benefits from lower pay, lower truck costs, lower taxes, and no obligation to pay overtime and premiums on health, workers comp, disability, and other insurance, to name just a few.
Instead, the drivers must assume these costs, which often leaves them earning just a few cents per hour on a 60-hour or longer work week. The result: mostly immigrant drivers working long hours for extremely low wages. These drivers are also denied basic working rights and protections required by the U.S. Occupational Safety and Health Administration (OSHA) and state regulatory agencies.
U.S. taxpayers also have to pick up the slack to make up for millions of dollars in unpaid taxes that the trucking companies get to pocket. According to the San Diego Free Press, “In recent years, both the federal and state governments have filed lawsuits against California port trucking companies over their misclassification of drivers, and the state Labor Commissioner has begun to hear some of the hundreds of driver claims seeking redress.”
In fact, every one of the 19 Labor Commissioner rulings in the ongoing dispute in the past year has determined that the trucking companies were illegally misclassifying their drivers as independent contractors. State officials determined that the trucking companies owed on average $66,000 each.
The trucking industry has responded to these findings with a lawsuit that seeks “a Temporary Restraining Order prohibiting the Labor Commissioner… from investigating, processing, or proceeding to hearing on any claim” brought by drivers against the trucking companies. The U.S. court dismissed the complaint.
According to the San Diego Fee Press, the trucking companies filed another complaint arguing that since the drivers were involved with interstate commerce, the trucking companies are “exempt from complying with California’s wage and hour and employee-related laws.”
Now the trucking companies are trying to shield themselves by arguing that California doesn’t have the authority to stop the practice of misclassifying drivers.
Beasley Allen lawyer Chris Glover focuses on personal injury cases involving heavy trucks, log trucks, 18-wheelers and other commercial vehicles. For more information, contact him by email at Chris.Glover@BeasleyAllen.com.
Our firm also investigates claims related to wage and hour laws, unfair compensation, and violation of the Fair Labor Standards Act, which ensures that employees are correctly classified and compensated for time spent on the job. For more information about these types of claims, contact Lance Gould at Lance.Gould@BeasleyAllen.com.