LOS ANGELES — A group of Los Angeles port truckers settled their suit against their employer, Shippers Transport Express Inc., for violations of the Fair Labor Standards Act (FLSA) for $11 million. The group consisted of about 540 drivers who alleged that they had been wrongly classified as independent contractors. The members of the class will be paid an average of $13,000 each, with some receiving more.
Misclassification in Port Trucking
The National Employment Law Project (NELP) surveyed hundreds of complaints and cases brought by port truckers against their employers for misclassification under wage laws and published a report detailing its findings. According to the report, state and federal courts and agencies reviewing employment arrangements in port trucking overwhelmingly conclude that the drivers before them are employees and that the label “independent contractor” has little connection with the reality of these drivers’ work. Approximately 49,000 of the country’s 76,000 port truckers are misclassified as independent contractors, and in California, port trucking companies are annually liable for misclassification violations of $787 to $998 million each year.
Port Truckers as Employees
The NELP report applied the most stringent test of employment status from the Internal Revenue Service (IRS) and found that the typical port driver should be considered an employee. First, trucking companies imposed strict controls on port drivers, determining how, when, where, and in what sequence drivers worked. The companies imposed truck inspections, drug tests, and stringent reporting requirements. The conduct of drivers was regularly monitored, evaluated, and disciplined.
Second, port drivers typically worked for one company at a time and did not offer services to the general public. They were largely dependent on the company for work and access to the ports. In essence, the drivers were usually financially dependent on trucking companies.
Third, port drivers performed a function integral to the companies they served and their function was the actual business of the companies. They used company signs and permits and represented themselves to others as being from the company.
Based on these factors, port drivers should be considered as employees. However, they are often treated as independent contractors and thus considered exempt from minimum wage and overtime protections. Although their average work week consisted of around 59 hours, they were paid less than employees, did not have health insurance and retirement benefits, and were often made responsible for all truck-related expenses including fuel, taxes, insurance, and maintenance and repair costs.
If you or someone you know has been misclassified and denied minimum wage or overtime, you should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page. Our top rated team of overtime lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing so it is important that you call our experienced attorneys today.