Protesting years of alleged wage theft and unfair treatment, more than 100 port truck drivers went on a 48-hour strike this week at the ports of Los Angeles and Long Beach.
The group behind the strikes that ended Tuesday, union-backed Justice for Port Truck Drivers, says that port truck drivers haul nearly $4 billion worth of cargo every day for companies like Walmart (WMT), Ikea, and Home Depot (HD), yet they often receive paychecks below the minimum wage.
At the heart of the truckers’ protest is the issue of companies misclassifying drivers as individual contractors rather than as employees.
What might sound like a paperwork error is effectively leaving truckers with few labor rights. Since they are not counted as employees, truckers lack the right to minimum wage or overtime, workers’ compensation, unemployment benefits, protection against harassment, and the right to organize, says Rebecca Smith, deputy director at the National Employment Law Project, who has studied the issue.
In a statement, Total Transportation Services, Inc., one of the companies being picketed this week, said that there are “literally hundreds of unfilled vacancies for company drivers in Southern California,” so if a driver wants to be an employee rather than an independent contractor, there’s the option to do so. “We pay our contractor partners above the industry average and provide one of the safest-rated work environments in the industry while doing it,” the statement said.
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By giving drivers the independent contractor title instead of simply counting them as employees, companies save on payroll costs as it allows them to avoid paying per-employee contributions to Social Security and workers’ compensation and unemployment insurance funds. While the independent contractor classification saves companies money, it cuts into the pay of the drivers themselves since — as contractors — they’re often required to pay for their truck’s fuel, maintenance, and repairs out of their own pockets. And as independent contractors, drivers are paid per delivery instead of an hourly wage.
A contractor driver’s median net earnings before taxes total $28,783 based on a 59-hour workweek, while that of drivers classified as employees comes to $35,000, according to a February 2014 update of a 2010 study by NELP, Change To Win Strategic Organizing Center, and Los Angeles Alliance For a New Economy.
In addition to shortchanging the drivers, applying the independent contractor label is in many cases flat-out wrong, says David Bensman, a professor at Rutgers School of Management and Labor Relations. The NELP report estimates that 49,000 of the nation’s 75,000 port truck drivers are misclassified as independent contractors. Most truckers depend on their company for help obtaining a truck and insurance. Drivers typically commit to only picking up and delivering containers for just one company, and how, when, and where drivers work is left to the company’s discretion. “So the independence is in name only,” Bensman says.
Despite the strikes in L.A. this week, Smith says that truckers have made some progress of late in fighting misclassification. Since the release of NELP’s first report on the issue in 2010, truckers have filed 400 complaints of wage theft related to misclassification to the California Division of Labor Standard Enforcement alone. Penalties in the 19 cases that had been adjudicated by the time NELP updated the report in February averaged $66,240 per driver.
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The legislatures of New York, New Jersey, and Washington — states that handle 60% of all container port traffic — introduced legislation that would strengthen worker protections against misclassification, though only New York’s has gone into effect. (Governor Chris Christie vetoed New Jersey’s proposal and Washington’s was never put to a vote.)
While truckers are fighting for bigger paychecks and better livelihoods, there’s more at stake in this debate. Bensman of Rutgers says that at ports outside the U.S. — like those in the Netherlands, Germany, and China — the coordination between trucks and ships is smoother and the delivery of goods faster than it is here. In the U.S., Bensman says, there’s no incentive to improve the coordination because all of the waste lands on the backs of truck drivers. “It doesn’t cost the shipping companies any extra,” he says.