A new report claims to reveal the “enormous scale and shocking costs of an illegal business practice used by employers in the U.S. port trucking industry”
Entitled, “The Big Rig Overhaul: Restoring Middle-Class Jobs at America’s Ports Though Labor Law Enforcement,” it is a collaboration between the National Employment Law Project, the Los Angeles Alliance for a New Economy and the Change to Win Strategic Organizing Center. The groups are receiving support from the Teamsters Union.
It details years of wage theft, labor law violations, safety hazards, and tax evasion through the illegal practice of misclassifying employee drivers as independent contractors, according to a release.
The groups claim worker misclassification has become the port trucking industry’s dominant business model and describe it as “an unlawful scam amounting to billions of dollars in stolen back wages and lost tax revenue for federal and state governments.”
“As a result of the misclassification scam, port trucking companies are currently liable for an estimated $850 million in stolen wages per year in California alone,” according to the groups. “Nationally, the total cost of lost tax revenue, compounded with violations of wage and hour laws, is an estimated $1.4 billion annually.” They say this translatest into wage theft amounting to $5,072 per driver per month.
The report finds that nearly 50,000 of the nation’s 75,000 port truck drivers are misclassified as independent contractors, rather them employee drivers, which it says artificially suppresses wages and deprives workers of basic labor protections and benefits such as workers’ compensation and unemployment insurance.
“For port truck drivers and many others in related occupations, proper classification can mean the difference between a decent, family-supporting job, and working in poverty,” said Jared Bernstein, senior fellow with the Center on Budget and Policy Priorities, former chief economic advisory to Vice President Joe Biden, and author of the report’s foreword. “By properly classifying workers as regular employees when that’s what they are, we can lift the paychecks of workers, add to public coffers with the resources they’re owed, and reverse a dangerous tilt in the economic playing field.”
The groups are using the report to push for the passing of three bills in Congress: The Payroll Fraud Prevention Act, the Clean Ports Act of 2013, and the Fair Playing Field Act of 2012. The belive the legislation will, in part, “remedy legal conditions of employee misclassification and its damage to the American economy.”
They say port truck driving jobs were once solid middle-class jobs, but conditions have declined over last 30 years as “a result of deregulation, rampant misclassification, and workplace laws that have failed to keep up with a fast-changing economy,” creating what it calls “a case study in economic inequality and the hollowing out of the American middle class.”