The worst jobs in America are getting worse thanks to a loophole in US laws

A new report on port truckers demonstrates how the trend away from direct employment relationships can go very wrong.
A new report on port truckers demonstrates how the trend away from direct employment relationships can go very wrong.
Image: Reuters/Alberto Berti
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At ports in Los Angeles, short-haul truckers have jobs that look more like indentured servitude than employment.

In an in-depth investigation by USA Today, which relied on accounts from more than 300 drivers, reporter Brett Murphy described a horrific arrangement in which workers, even after putting in grueling hours, sometimes owe their employers money at the end of their pay periods.

That’s because employers force the truckers—who move more than half of the United States’ container imports out of LA ports—to finance their own trucks, buy their own gas, or even pay to use the company parking lot, and deduct those fees each week from drivers’ paychecks. Companies force drivers to work up to 20 hours a day by threatening to take away the trucks—and the money drivers have paid toward them.

This setup demonstrates the worst that can happen when companies falsely designate their workers as “independent contractors” in order to avoid labor protections. Because these workers are technically “mini businesses,” employers can require workers to pay for their own equipment, and they aren’t responsible for following worker protection laws that apply only to employees, such as minimum wage laws, overtime pay laws, and requirements to contribute to benefit programs.

Uber is the most famous example of a company that has been challenged on its classification of workers as “mini businesses,” but Silicon Valley’s “gig economy” by no means invented the strategy. Before Uber, FedEx was sued multiple times—with varying results— for classifying its drivers as independent contractors who are required to purchase their own trucks and, in some cases, to pay FedEx in order to cover for them on vacation (since 2011, it has worked with contract companies that provide drivers). Such legal challenges are also common in the construction and janitorial services industries.

In the case of the LA port truckers, the classification as independent contractors has almost never stood up to examination. According to USA Today’s report, since 2010, at least 1,150 port truck drivers have filed claims in civil court or the California Department of Industrial Relations. Judges have sided with the workers in 97% of cases heard, ruling them to be employees. Over the last four years, truckers have held 15 strikes at LA-area ports over this issue, including one with warehouse workers this week.

In 2015, the Obama administrations issued guidelines that would make it harder for employers to use the classification of independent contractors, but the department of labor withdrew those guidelines in June.

Port truckers have a double layer of vulnerability in their relationship with their employers. In addition to being independent contractors, they often work for contracting companies, which are hired not directly by brands that consumers might recognize, such as Target, Home Depot, and Costco, but by logistics companies that these companies hire. ”Retailers could refuse to allow companies with labor violations to truck their goods,” Murphy writes. “Instead they’ve let shipping and logistics contractors hire the lowest bidder, while lobbying on behalf of trucking companies in Sacramento and Washington D.C.”

As companies push more and more work to contractors in order to focus on core competencies, non-traditional work arrangements, including independent work and contract work, are becoming more common.

David Weil, who was the administrator of the Wage and Hour Division of the U.S. Department of Labor during the Obama administration, documented how safety and wages decline as workers get further and further from direct employment relationships in his book The Fissured Workplace:

As the fissured workplace has deepened and spread across the economy, work that once provided middle-class wages and benefits has declined. Jobs that once resided inside lead businesses providing decent earnings and stability now reside with employers who set wages under far more competitive conditions. Where lead companies once shared gains with their internal workforce, fissuring leads to growing inequality in how the value created in the economy is distributed.

In the port truckers’ situation, it’s easy to see how a lack of accountability from large companies like Target and Home Depot that ultimately require goods to be moved can contribute to a bad situation.

When Murphy asked a Target spokesperson about labor violations by trucking companies in Target’s supply chain, she wrote that “Target doesn’t have anything to share here.” JCPenney spokesperson told him the company “relies on its third-party transportation vendors to comply with all applicable laws and regulations.”

“We’re not trying to wash our hands of this issue,” said a spokesman for LG Electronics, “but it’s frankly far afield” and “really very disconnected from LG Electronics.”