Independent contractor misclassification remains in the spotlight, with the Los Angeles City Council considering denying access to the Port of Los Angeles to trucking companies not in compliance with labor laws, including the misclassification of workers as independent contractors. The port is ranked by some sources as the largest port in the world. Separately, the Economic Policy Institute, a left-leaning think tank, issued a report on wage theft that cited independent contractor misclassification among its concerns.
In Los Angeles, the City Council voted after concerns arose about wage theft caused by misclassification of truckers and warehouse workers as independent contractors by companies operating on Port of Los Angeles property.
“Since 2010, at least 1,150 port truck drivers have filed claims in civil court or with the California Department of Industrial Relations’ enforcement arm, known as the labor commission,” according to a motion written prior to the vote by Los Angeles Councilmembers Joe Buscaino and Bob Blumenfield.
“Judges have sided with drivers in more than 97% of the cases heard, ruling time after time that port truckers in California can’t legally be classified as independent contractors,” according to the motion [1]. “Port drivers and warehouse workers have engaged in 15 labor strikes in the past four years, disrupting port activity and service. It is important to take a closer look at potential violations and their impact on the port and identify solutions to protect truck drivers and warehouse workers.”
In a separate, unrelated press release, the Economic Policy Institute reported that $2 billion in stolen wages [2] was recovered for workers in 2015 and 2016. The organization cited misclassification of employees as independent contractors — to avoid paying overtime or to pay lower than the legal minimum wage — as one of the ways workers’ wages were taken.
In addition to misclassification, it also said workers’ wages were taken through minimum wage violations, overtime violations, off-the-clock violations, meal break violations, illegal deductions and tipped minimum wage violations.
In its report, the organization said $1.1 billion in stolen wages were recovered in 2016, and $880.3 million were recovered in 2015. The wages were recovered by the US Department of Labor; state departments of labor and attorneys general in 39 states; and through class-action settlements.
The top 10 class actions in 2016 recovered $695.5 million for workers.
“Wage theft is a growing and pervasive problem that robs workers of billions of dollars every year. Yet little progress has been made to address this epidemic,” said Celine McNicholas, labor counsel at the Economic Policy Institute. “State and federal enforcement agencies often lack adequate resources to effectively deter employers from violating existing protections and it is increasingly harder for workers to successfully file private claims as they are forced to sign-away their right to go to court as a condition of employment.”