Drivers on the picket line earlier this month as they fight against misclassification. Photo by Stephanie Rivera
In what was hailed as a “historic” hearing by labor advocates, stakeholders from the Port of Long Beach (POLB), trucking companies and drivers testified before the Tidelands and Harbor Committee last night to address the misclassification of workers and the wage theft that led to some port truck drivers going on strike earlier this month.
Presentations were given by the POLB, the Harbor Trucking Association (HTA) and by the National Employment Law Project (NELP). All presentations shared varying takes on the issue of drivers being classified as employees or owner-operators, and the corresponding consequences.
Drivers have contended that by being classified as owner-operators, the cost of truck repairs and other fees are deducted from their gross pay, placing the burden of such costs on their backs. This leaves them with take-home pay that is less than minimum wage, they said.
HTA Executive Director Weston LaBar said that while it’s not the position of the association to push for one side or the other, their independent reviews have found that drivers enjoy the freedom to choose.
“The Harbor Trucking Association has always been in favor of choice,” LaBar said. “We in no way, shape or form prefer one model over the other, but we think it’s important that both companies have choices and drivers have choices. And at this point in time there’s no shortage of opportunities as both employees or owner operators in the Port.”
This assertion elicited some boos and whispers of “liar” from the group of about 30 truck drivers in attendance.
LaBar also contended that net pay for independent owner operators outpaced those drivers that were deemed employees by about $1,800 per week. However, when pressed by Vice Mayor Suja Lowenthal, the chair of the committee, on whether or not that sum took into account the fees that drivers complained were eroding their net pay, he conceded that it did not.
Representing NELP, Rebecca Smith presented a different tale of misclassification. Her presentation claimed that instead of providing drivers with the freedoms of being an owner, the contractor classification oftentimes provided drivers with negative paychecks, leaving them in a worse position than being unemployed.
She noted that of the approximately 14,000 registered drivers at the Port, some 82 percent are classified as contractors. And of those, 80 percent were unhappy with that misclassification.
Smith said that while it is true that some drivers do enjoy being independent of a company, it is the exception, not the rule.
Smith said companies often misclassify workers as independent contractors for profit reasons, as they can avoid the costs of payroll taxes, unemployment pay and other worker protections provided to workers classified as employees. However, Smith said agencies have begun to take notice.
In California alone, over 500 claims and 18 class-action lawsuits have been filed with the Department of Labor Standards Enforcement (DLSE) by drivers over misclassification.
“If you are a home healthcare worker and you work for a home healthcare agency, you are an employee,” Smith said. “If you are a janitor and you work for a janitorial company, you are an employee. And by the same token, if your work is the core, soul work of a trucking business, you are an employee.”
A worker's paycheck showing the impacts of misclassification. Photo courtesy of Long Beach Rising.
Several drivers testified to this point during the public comment section of the hearing. Carlos Quintero, a five-year employee of Pacific 9 Transportation—one of the companies that drivers are striking against—said that wage theft is huge problem at the port. After working 70 hour work weeks that leave him no time to spend with his four children, Quintero said he often times has very little to show for it.
“Many weeks, I make far less than minimum wage,” a tearful Quintero said. “Some weeks I even owe the company. You tell me if that’s justice.”
Humberto Canales shared a similar story of the cost of misclassification. Because he’s classified as an independent operator, he must provide his own insurance, so he was forced to pay out of pocket for the recent birth of a child. While he missed work to care for his wife, Canales said he was still responsible for the leasing fees for his truck that sat idle.
“I recently had three continuous paychecks that resulted in zero dollars, even negative dollars,” Canales said through a translator. “That’s just an example of the misclassification leading to wage theft.”
Dr. Vivian Price, a coordinator of labor studies at California State University, Dominguez Hills said that her class took a field trip to the POLB to investigate wage theft as part of their curriculum. They toured the terminal and surrounding communities. She said they witnessed firsthand the distribution of checks that were zeroed out after drivers paid fees to trucking companies.
Price said her students were “aghast’ to see that such checks existed, when the port as a whole seemed to be thriving.
“They understood about living wage, they understood about minimum wage but they couldn’t imagine that wage theft is really going on in this time and age, and in this city in particular,” Price said.
The idea that the businesses can flourish while paying their drivers as employees was illustrated by Kevin Baddeley, president of Shippers Transport Express (STE) based out of Carson. He said that since converting to an employee model in January and negotiating a union contract with the Teamsters Union shortly after, STE has been stable and its customers happy. Baddeley asked that all companies serving the port be held to the same standards.
“It’s doable, it can work,” Baddeley said. “We need a fair playing field, one where every company has to play by the same rules and follow the same laws.”
Enforcing the law is something Lowenthal said was outside the jurisdiction of the council, but wouldn’t stop this council or Mayor Robert Garcia from standing up for the drivers.
“The City of Long Beach does not have legal jurisdiction per se on this issue, but what I want to share with you is that has never stopped an elected body from informing the legal process or public policy,” Lowenthal said. “We are supposed to be opinion leaders.”
This isn’t the first time Lowenthal has been faced with this issue. The issue first arose eight years ago, and Lowenthal was very vocal on the subject, due to what she characterized as a “crisis mode" unfolding at the port.
Although much time has passed and improvements at the port have been made, Lowenthal said the wealth experienced by some at the Port hasn’t translated to those workers that support the industry. She said these needs must be addressed.
“We have an obligation under our watch to make sure that under our watch these are not the conditions that exist,” Lowenthal said. “I do believe, what the trend is, that it’s modern day indentured servitude. That is what we’re seeing."