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While some contractors are truly independent, highly paid professionals working in Silicon Valley, Hollywood and the New York financial industry while enjoying the flexibility of their various relationships with the companies that give them assignments, many more are low-paid workers who are misclassified. Senator Edward Kennedy and Ralph Nader led the reformers who charged that trucking regulation produced high rates for consumers and monopoly profits for businesses.Before 1980, trucking companies had to get a license from the Interstate Commerce Commission to haul freight to and from the ports.
The ICC limited the number of trucks to assure stability; the resulting rate structure was sufficient for companies to make stable profits while providing workers with decent incomes with benefits. The emerging model meant trucking companies had few fixed costs, had no responsibility for workers’ compensation or unemployment insurance fund contributions, paid no social security taxes and were able to obtain drivers’ services without paying for health care costs or pension plans.Thirty-four years after deregulation, ten surveys of drivers at seven ports reveal that 82 percent of workers in the industry which hauls containers from ports to warehouses are misclassified as independent contractors.
Through independent contracting agreements, leases, and other employment arrangements, trucking companies make drivers responsible for all truck-related expenses including purchase, fuel, taxes, insurance, maintenance, and repair costs. In many cases, the drivers were assisted in leasing their trucks by the trucking companies, which then kept the leases in their own possession.

The trucking companies obtained insurance for the drivers and billed them for it on their weekly pay checks, but in many cases, firm owners did not actually enroll the drivers in an insurance program until after they had an accident. In everything but name, these workers were regular employees and should have been classified and paid as such.In California, the courts have found five port trucking companies guilty of misclassification. According to the Fiscal Policy Institute study, 14.8 percent of construction workers in New York were misclassified as independent contractors in the years 2002-5. In 2009, Patricia Smith, then New York State’s Commissioner of Labor and now the federal Labor Department’s Solicitor of Labor, reported thatOne of the most common violations we see, particularly on upstate construction sweeps, are multi-layered “subcontracting” in trades such as drywalling, roofing, masonry and painting. A federal Labor Department study conducted in 2000 found that from 1984-2000, the percentage of misclassified construction workers had increased from 15 percent to 30 percent.A recent article by Jim Efstathiou in Bloomberg News quoted George Perry, a 57 year-old construction worker in Dayton, Ohio, who accepted misclassification as an independent contractor while building a homeless shelter because “I felt my back was up against the wall. Moreover, drivers reported receiving no compensation from their companies when they were injured.

Health studies indicate that the truckers’ heart and lung conditions result in elevated mortality rates.The Fiscal Policy Institute’s 2007 examination of the construction industry in New York City found that misclassified workers “are paid very low wages, are denied the protections of universal social insurance programs (workers’ compensation, unemployment insurance, disability), do not have health coverage or retirement benefits, are not able to join a union, and rarely are they entitled to paid sick leave, holidays or vacations. Second, there are laws confined to the construction industry that codify uniform standards for employment. The New York Joint Task Force, cited earlier, is a prominent example.In addition to these legislative efforts, the Office of the Attorney General in California has been prominent in bringing lawsuits against companies that misclassify. Kennedy School of Government, has advised the Wage and Labor Division for years and was a prime mover of Massachusetts’ campaign to enforce labor laws in the construction industry.

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