Despite paying tens of millions of dollars in back pay and penalties to truck drivers misclassified as contractors, the trucking industry is ignoring an amnesty deal for California drayage companies working at the state’s ports.
Port truck drivers claim that they are being denied employee benefits including wages, overtime pay, unemployment insurance and workers’ compensation by being classified as independent contractors rather than employees.
No companies have signed up to participate in the Motor Carrier Amnesty Program.
Launched in May, the program allows carriers to pay back wages to misclassified drivers and change their work status from independent contractor to employee. In return, the trucking companies would be relieved of any liability that may result in fines and other penalties.
None are biting even though the issue has turned into a bitter legal battle that pits drivers against trucking companies in courtrooms and on picket lines.
“I haven’t talked to any companies that plan to sign up for the amnesty program,” Weston LaBar, spokesman for the Harbor Trucking Association, told Trucks.com.
He called the amnesty program a “bill of false goods.”
LaBar said multiple companies that have put their drivers on payroll have gone out of business because they can’t find older, experienced drivers who want to become employees since “they are making more money as independent contractors.”
All of the companies offer so-called drayage services, or short-haul movement of goods in and around ports. There are an estimated 12,000 drivers who haul cargo in and out of the ports in California.
State officials wouldn’t say why trucking companies have balked at the amnesty program, which is administered by California’s Department of Labor Standards Enforcement and the Employment Development Department.
“We cannot speculate as to why trucking companies either choose or reject voluntary participation,” Paola Laverde, spokeswoman for California’s Department of Industrial Relations, told Trucks.com. “We are not guessing on why or why not companies choose to follow the law.”
Since 2011, California truckers have filed roughly 800 wage claims alleging that they have been misclassified as independent contractors and denied benefits owed to employees.
Hundreds of drivers protesting their work status have staged 13 strikes against multiple companies at the ports of Los Angeles and Long Beach over the past three years, said Barb Maynard, a Teamsters union spokeswoman.
Drivers have won more than $35 million in over 300 cases, according to the California Labor Commissioner’s office. And there are still 199 port truck driver wage claims pending, Laverde said.
In December, Pacific 9 Transportation was ordered to pay nearly $7 million in back pay to 38 drivers. And in February 2014, the state ordered Pacer Cartage Inc. to repay $2.2 million in back pay, attorneys’ fees and interest to seven of its short-haul drivers who said they were misclassified.
The National Employment Law Project claims that port trucking companies are liable for an estimated $850 million per year in wage and hour violations in California alone.
“By treating employee drivers as independent contractors, port trucking companies are violating a host of 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,” the group said.
Intermodal Bridge Transport Inc. in Wilmington, Calif., the target of strikes in April 2015 and again in June, has allegedly misclassified its workers as independent contractors according to a preliminary ruling by the National Labor Relations Board. The company faces an NLRB hearing July 18. It also is the target of two pending class-action lawsuits by drivers who allege IBT engaged in “wage theft and illegal misclassification.”
The claims made by drivers are unfounded, said Gary Schubert, president of IBT. He said most drivers don’t want to be classified as employee drivers but instead want to “be their own bosses.”
Schubert said a number of trucking companies “will go out of business rather than repay the money they owe.”
IBT would not be participating in the amnesty program even if the labor board sides with IBT drivers, Schubert said
He said rulings against the trucking industry only result in fewer jobs for drivers.
“When the trucking companies go out of business, the trucks get returned back to the leasing companies,” Schubert said. “Drivers don’t have a truck, the drivers don’t have jobs and drivers didn’t collect any money from the suit. It’s a lose-lose deal.”
LaBar of the Harbor Trucking Association, which represents 100 companies, said some are requiring the drivers to be employees for 60 to 90 days.
“But,” he said, “when that time is up they are jumping over to be independent contractors. They are asking where they can buy a truck, so we are still seeing the truckers wanting the independent contractor model.”
Still, the Teamsters and others believe that switching drivers from independent contractors to employees is the only way to solve the misclassification issue.
Daniel Uaina, an IBT port driver, said he would make more as an employee driver because he would be guaranteed a set number of hours per week.
He currently drives the night shift and said there often isn’t enough work for him and other port drivers by the time Friday night rolls around. However, he said IBT won’t let him take his truck and work at another company to pick up hours to plug the gap.
“Some trucking companies find a way to pass along most of their costs of doing business to the driver, such a fuel, rent or leases, selling them on the American dream of owning their own business, when, in fact, it comes down to control, where the company controls everything they do,” Maynard said.