Port Trucking Companies Ignoring Amnesty Deal Despite Legal Risks

by Jana Ritter - Published: 7/06/2016

After 13 strikes, approximately 800 wage claims and tens of millions of dollars in back pay and penalties paid to California port truck drivers misclassified as contractors, several trucking companies apparently refuse to see the writing on the wall and are blatantly ignoring a recent "amnesty deal" put forth by the state. Launched in May, the Motor Carrier Amnesty Program allows carriers to pay back wages to misclassified drivers and change their work status from independent contractor to employee. By participating in the program, the trucking companies would be relieved of any liability that may result in fines and other penalties. However, no companies are biting as of yet.

                                                            

Employment classification has been an on-going battle between California port truck drivers and companies since 2011, with multiple labor strikes severely impacting operations and hundreds of wage claim suits filed by drivers alleging they've been misclassified as independent contractors and denied benefits owed to employees, including wages, overtime pay, unemployment insurance and workers’ compensation. According to the California Labor Commissioner’s office, so far truck drivers have won more than $35 million in over 300 cases and there are 199 port truck driver wage claims still pending.  Still, not one company has voluntarily signed up for the program despite the potential legal risks. 

                                                           

“I haven’t talked to any companies that plan to sign up for the amnesty program,” said Weston LaBar, spokesman for the Harbor Trucking Association. He calls the amnesty program a “bill of false goods.” In fact, LaBar claims that many companies that have put their drivers on payroll have gone out of business because they can’t find older, experienced drivers who want to become employees. According to LaBar, many of these drivers believe “they are making more money as independent contractors.” However, there are plenty of truck drivers such as Daniel Uaina who disagree. Uaina believes he would make more as an employee driver because he would be guaranteed a set number of hours per week and others also believe that many trucking companies find a way to pass most of their costs such a fuel, rent or leases onto independent contractors.

Officials haven’t yet given their own theory on why trucking companies have pretty much balked at the amnesty program, which was administered by California’s Department of Labor Standards Enforcement and the Employment Development Department. “We cannot speculate as to why trucking companies either choose or reject voluntary participation,” said Paola Laverde of California’s Department of Industrial Relations. She also added that they couldn’t make guesses on why or why not companies choose to follow the law.

Gary Schubert, president of IBT says his company will not be participating in the amnesty program even if the labor board sides with IBT drivers. According to Schubert, the claims made by drivers are unfounded because most drivers don’t want to be classified as employee drivers but instead want to “be their own bosses.” He also says that a number of trucking companies “will go out of business rather than repay the money they owe” and that the rulings against the trucking industry will only result in fewer jobs for truck drivers. “When the trucking companies go out of business, the trucks get returned back to the leasing companies. Drivers don’t have a truck, the drivers don’t have jobs and drivers didn’t collect any money from the suit. It’s a lose-lose deal,” says Schubert.

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