New labor report outlines harsh plight of misclassified port drivers

By Clarissa Hawes, Land Line staff writer | Friday, February 21, 2014

A new report released by labor groups paints a harsh reality for thousands of port drivers, who have been misclassified as independent contractors. However, many misclassified drivers are forced into bad leasing deals and have little or no control over the loads they haul or the hours they work.

The report, “The Big Rig Overhaul: Restoring Middle-Class Jobs at America’s Ports Through Labor Law Enforcement,” was released on Wednesday, Feb. 19. It was a collaborative effort between three labor groups, including the National Employment Law Project, Change to Win Strategic Organizing Center and the Los Angeles Alliance for a New Economy. The project was supported by the Teamsters Union.

The report emphasizes the need for fair pay through proper classification of port workers. It states that as many as 49,000 of the nation’s 75,000 port drivers are misclassified by the companies they work for in this country.

Using data from existing claims, researchers state that port trucking companies are liable for an estimated $850 million per year in wage and hour violations in California alone.

Port drivers have started fighting back against misclassification practices and have filed approximately 400 complaints with the California Division of Labor Standards Enforcement for “wage theft violations related to misclassification.”

Companies who misclassify port drivers have an unfair financial advantage over companies that properly classify their drivers. Misclassifying drivers “violates state and federal labor and tax laws, including provisions related to wage and hour standards, income taxes, unemployment insurance, organizing, collective bargaining and workers’ compensation,” according to the report.

“The story of port truck drivers is the story of the degradation of jobs by employers who actively violate the law,” Rebecca Smith, co-author of the report, told Land Line on Thursday. Smith is the deputy director of the National Employment Law Project, known as NELP.

“By now, it’s clear that this practice is a scam,” she said. “Agencies from the Internal Revenue Service to the U.S. Department of Labor to state agencies in at least three states are confirming what drivers always knew – that they are being cheated out of bedrock labor protections.”

The report cites numerous legal cases where port drivers have been misclassified as independent contractors. In these cases, their employers exercised total control over the work schedules and pay of drivers.

Many port drivers have been forced to upgrade their equipment to comply with strict emissions standards and have entered pricey leasing deals with the companies they work for in order to keep their jobs. While they bear the cost of truck ownership, operation and maintenance expenses, they are not allowed to set their own rates and typically aren’t allowed to haul loads for other companies for fear of termination or retaliation.

Recommendations in the report include urging Congress to pass the Payroll Fraud Prevention Act – S1687– introduced by Sen. Robert Casey, D-Pa., to amend the Fair Labor Standards Act of 1938. This bill would require companies to accurately classify individuals as employees or non-employees.

Another bill, the Fair Playing Field Act – S1706 – has been introduced by Sen. Sherrod Brown, D-OH. This bill seeks to amend the Internal Revenue Code regarding classification of workers.

“We can restore good jobs in this country,” Smith told Land Line. “We can start by compelling employers to follow the law, and port drivers are leading the way.”

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