As the Dec. 31 deadline looms, only two trucking companies are taking advantage of an amnesty deal for firms that have improperly misclassified drivers as independent contractors.
Just four companies originally signed up for the Motor Carrier Amnesty Program that was launched in May, but two companies dropped their applications ahead of the deadline.
Shippers Transport Inc. and Big West Transport & Heavy Haul Inc. are the only companies with active applications, the California Department of Industrial Relations said.
Speed Intermodal notified the California Labor Commission in November that “it was not going forward with the application process,” said Paola Laverde, spokeswoman for the state agency.
She said an application by a another company, Gonzalo Trucking Inc., because it has not provided the paperwork required to move forward with the process.
The amnesty deal allows carriers to pay back wages to misclassified drivers and change their work status from independent contractors to employees. In return, the trucking companies would be relieved of any liability that may result in fines and other penalties.
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.
The participating companies were required to fill out a two-page form stating they wanted to “voluntarily reclassify (their) commercial drivers as employees.”
The carriers also were required to conduct a self-audit that includes the identification of each commercial driver that has been reclassified, Laverde said.
The companies also must provide the state with documentation that includes the amounts paid to each driver to compensate for previous misclassification and the time-period applicable to the amount paid to each driver prior to reclassification.
The amnesty program languished with no takers until September. State officials could not say why more carriers had not come forward to accept the amnesty deal.
“We cannot speculate as to why trucking companies either choose or reject voluntary participation,” Laverde told Trucks.com.
More firms would have signed up for the program if it had offered better protection against damage claims against trucking companies, according to an industry trade group.
“The Motor Carrier Amnesty Program was wildly unsuccessful because it did nothing to protect the motor carrier,” said Weston LaBar, executive director of the Harbor Trucking Association in Long Beach “The program did nothing to protect companies from the punitive awards and back wages that have caused the financial hardship of the motor carriers. This was not about amnesty, it was about forcing the employee model on the industry and creating an easier avenue for labor to attempt to organize and collect dues.”
Since 2011, California truckers have filed more than 800 wage claims alleging they have been misclassified as independent contractors and were denied benefits owed to employees.
California port drayage companies have paid tens of millions of dollars to drivers who have won more than 300 cases. There are still around 199 driver wage claims pending, according to the Department of Industrial Relations.
The National Employment Law Project says that California port carriers are liable for an estimated $850 million per year in wage and hour violations.
Most port companies in California will not voluntary reclassify drivers until they are “forced to by law,” said Barb Maynard, spokeswoman for the Teamsters union.
“As long as these companies can get away with misclassifying their drivers and don’t have to follow wage and hour standards or pay federal taxes, they won’t do it,” Maynard said.
Companies that do properly classify their drivers as employees and own the trucks are being undercut by drayage companies that aren’t following the law, Maynard said.