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California targets retailers for trucker misclassification

Retailers in California will be jointly liable for labor law violations under a new law if they hire port trucking companies that misclassify workers as independent contractors or commit other violations. Gov. Jerry Brown signed the law, SB 1402, last Saturday.

It “makes retailers jointly liable for violations of state labor and employment laws when they hire port trucking companies with unpaid final judgments for failure to pay wages, imposing unlawful expenses on employees, failure to remit payroll taxes or provide worker’s compensation insurance, misclassifying employees as independent contractors, and other labor law violations,” according to a description of the law by the office of state Sen. Ricardo Lara, its sponsor.

More than 40% of US shipping-container traffic moves through the ports of Los Angeles, Long Beach and Oakland in California. And port trucking companies and regulators have often clashed over misclassification [1].

“Retailers using their power to end exploitation and restore good jobs for workers at our ports will mean port truckers are left behind no more!” Lara said in a statement.

The California Chamber of Commerce opposed the bill, arguing it would hold innocent, third-party businesses liable for the obligations of a motor carrier.

“By imposing third-party liability, SB 1402 will create significant amounts of litigation for retail businesses in this state,” the chamber wrote in a letter to the governor requesting a veto. “While the bill attempts to address liability issues by allowing motor carrier customers to include contractual protections such as indemnification clauses, these contractual obligations will be extensively litigated as well. Additionally, there is an apportionment issue that will need to be addressed in each lawsuit because carriers deliver for multiple customers at one time.”

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