A report released Wednesday asserts that two-thirds of the nation’s truck drivers who haul goods from U.S. seaports, such as the ports of Long Beach and Los Angeles, are misclassified as independent contractors, a distinction some labor advocates say allows trucking companies to skirt labor laws. The report, titled The Big Rig Overhaul: Restoring Middle-Class Jobs at America’s Ports Though Labor Law Enforcement, says 49,000 of the nation’s estimated 75,000 port truck drivers are misclassified as independent contractors when they should be classified as employees of the companies they work for and enjoy the benefits that come with being an employee, including workers compensation, overtime and the right to unionize. About 25,000 of the nation’s port truck drivers come from California, according to the report generated by advocacy groups The National Employment Law Project, The Change to Win Strategic Organizing Centerworks and The Los Angeles Alliance for a New Economy. Supporters of the report say the misclassification has led to the disintegration of what had been a good-paying job. “Trucking used to be one of the backbones of America’s blue-collar middle class but deregulation and deunionization and misclassification has significantly reduced the quality of jobs in the sector,” Jared Bernstein, senior fellow for the Center on Budget and Policy Priorities and former chief economic adviser to Vice President Joe Biden, said in a conference call with reporters Wednesday. Rebecca Smith of the National Employment Law Project, who co-wrote the report, said the relationship between the companies and the drivers has few of the hallmarks associated with an independent business, that it’s the companies that strictly control the terms of the jobs and not the drivers. Alex Cherin, who represents the Harbor Trucking Association, a coalition of Los Angeles and Long Beach intermodal carriers, said that misclassification assertions are nothing but allegations and that the report is labor-driven. “The vast majority, an overwhelming majority of drivers want to remain independent contractors for the flexibility and the ability to own their own trucks and their own small businesses,” he said. For years, trucking companies have been moving toward hiring independent contractors, especially after the ports of Long Beach and Los Angeles enacted a Clean Trucks Program in 2008 to curb the number of polluting trucks operating at the port by requiring trucks to be 2007 and newer. Because the newer trucks cost more than $100,000, some of the trucking companies have created lease-to-own programs that would allow the companies to act as financiers to drivers who work toward paying off the trucks. In the last two months, more than 100 drivers have successfully completed the program, Cherin said. “Years ago when the Teamsters started criticizing the independent contractor model, one of the things they criticized was the inability of independent contractors to own their own trucks,” he said, adding that the recent success of the lease-to-own program has “taken the wind out of the sails of the Teamsters’ argument.” Not all truckers think the independent contractor model is a successful one, including Dennis Martinez, a driver who hauls goods from the Long Beach and Los Angeles ports who has filed a claim of wage theft against trucking company and logistics provider TTSI. “They make it seem like you would be a real independent contractor and get to be your own boss and get good pay for your work,” Martinez said. “Now I know the truth. I am part of a big scam on this.” Martinez says he sees very little from his paycheck after paying for fuel and other truck maintenance costs. “Sometimes the deductions are so high that almost all my money is gone,” he said. “How can I be an independent contractor when I am totally dependent on the company to work?” He added that he and other drivers have been retaliated against after bringing forth labor issues. Vic La Rosa, president of TTSI, said there has been no retaliation and added that this year Martinez chooses to only work two or three days a week in order to show lower income, according to his records. “Obviously they’re not working, and we have the records to prove it,” La Rosa said. He added that the cost of maintaining the truck is part of the contract drivers sign when they work for TTSI. “If that’s not something you want to do, I encourage you to become a full-time employee at another company,” he said. “When you sign that contract, those are the terms.” Supporters said the misclassification does exist, citing some 400 complaints filed by port drivers to the California Division of Labor Standards Enforcement for wage theft violations involving misclassification. Nineteen of those cases have resulted in an average of $66,240 per driver, according to the report. “It’s clear that these companies are operating illegally,” Smith said. Contact Karen Robes Meeks at 562-714-2088. Originally posted at paulmcinnes.com Source: http://www.presstelegram.com/business/20140219/most-us-port-truck-drivers-are-misclassified-as-independent-contractors-according-to-new-report

Although companies in virtually every industry that use independent contractors are at risk if they have not structured, documented and implemented their independent contractor relationships in a compliant manner, the Labor Department, the IRS and state workforce agencies have targeted certain industries where misclassification is thought to be most prevalent.