As the full scope of AB 5’s passage grows clearer, independent contractors in a few fields fear the new law could hurt them.
Co-published by the American Prospect
If AB 5 becomes law it could open the floodgates to similar legislation in other states. Uber and other companies may then find themselves on the defensive.
Many independent contractors can’t afford to upgrade their trucks to meet low-emissions standards. Will making them company employees change that?
Co-published by the American Prospect
Parsing who is a company employee and who is an independent contractor is no mere academic exercise: Contractors typically lack the workplace benefits and security enjoyed by traditional employees.
Lawbreakers who happen to be bosses are, in cases of misclassifying employees as “contractors,” treated with an enviable amount of understanding by the IRS.
Truck drivers spend unpaid hours awaiting assignments from dispatchers, as well as burning up time at vehicle inspections or completing shipping paperwork—time that would be compensated if they were classified as hourly or salaried employees, instead of as contractors.
Tony Sheldon, an internationally known trade unionist and the national secretary of Australia’s Transport Workers Union, recently attended a Las Vegas convention of world labor representatives, hosted by the Teamsters. Capital & Main caught up with him later in Los Angeles.
What if millions of American workers were being denied health insurance, job security and the most basic legal protections, from overtime pay to workers compensation to the right to join a union?
Self-employed independent contractors in the Golden State can neither form unions nor negotiate collective bargaining pacts, but part of those conditions could soon change, according to Assemblywoman Lorena Gonzalez (D-San Diego). Gonzalez, Chair of the Assembly Select Committee on Women in the Workplace, introduced Assembly Bill 1727 on January 28 as an amendment to the state’s Labor Code. Gonzalez’s bill, which will be updated today, is called the California 1099 Self-Organizing Act. It would allow independent contractors to form employee associations that could negotiate working conditions and pay, though not to form labor unions.
“All workers should have the right to organize and collectively bargain,” Gonzalez said in an email to Capital & Main. “Our laws need to catch up to the innovation happening in our economy to ensure independent contractors have a pathway to these workplace rights as well.”
Historians may remember 2015 as the year of the minimum wage — and for good reason. Twenty-one states and multiple cities raised the minimum wage in the past 12 months, scarcely two years after the “Fight for $15” was dismissed as a pipe dream by some observers. The past year also saw other major advances for working Americans. Here are ten of the most important:
1) Bottoms Up: L.A. Minimum Wage Increase Caps Historic Year for Low-Wage Workers
This summer the City of Los Angeles enacted the most far-reaching minimum wage increase of any municipality in America. L.A. County did the same soon after, which means that over the next five years nearly one million people will see their pay rise to $15.37 an hour. They will also be covered by some of the strongest wage theft protections in the nation, ensuring they actually get the increases mandated by law.
If legendary labor activist Joe Hill were alive today — and some contend that he is — he would have plenty to say about the state of the American worker. And the country, if it listened, would have plenty to learn.
Hill, who was executed in Utah 100 years ago this month, was an unapologetically radical union organizer whose rough-hewn songs and poems matched the brutal working conditions endured by tens of millions of Americans in the early 20th century. While his lyrics might at first sound anachronistic to contemporary audiences, their underlying spirit speaks directly to the experiences of far too many in our often unforgiving 21st century economy.
“Would you have freedom from wage slavery… Would you from mis’ry and hunger be free,” from Hill’s 1913 anthem “There Is Power in a Union,” could easily have been inspired by the thousands of truck drivers who haul goods to and from the nation’s largest port in Los Angeles.
“I want this message to be loud and clear: Until Pacific 9 reclassifies its workers, until they return our wages, until they obey the law, we will not stop the fight.”
– Amador Rojas, port truck driver
As Capital & Main reported yesterday, drivers with one of the larger trucking companies serving the ports of Los Angeles and Long Beach went on strike just before dawn Monday. They struck XPO Logistics, a major international freight transportation company, while at the same time other drivers picketed Pacific 9 Transportation as they entered the 15th week of a strike against that company.
These drivers are on the front lines of a critical fight impacting the future of work in the United States. “Misclassification,” a condition in which companies wrongly treat their workers as “independent contractors” rather than as employees, is a growing problem that is receiving increasing attention.
Traveling to and from Israel to take care of his cancer-stricken dad caused Ari Gottlieb to leave a full-time job in sales. As a result, the 37-year-old Los Angeles resident sought “on-demand” employment as an Uber ride-share driver in March 2013. Gottlieb told Capital & Main by phone that he provided nearly 3,000 rides to Uber customers before the company permanently “deactivated” (e.g., fired) him in August 2014.
Deactivation severs drivers’ connection to Uber’s app-based platform. Without that digital access to passengers, drivers are unable to earn income.
“The company contended that I was canceling customer requests for rides,” Gottlieb said. “It was true, but I didn’t have a choice, due to traffic, where I was and the location of the request. I hoped that the customers got a closer driver. Spending 30 minutes driving for a one or two-mile Uber customer trip didn’t make sense.”
Gottlieb labored as an independent contractor,
Why are the port truck drivers on strike? It is well known that the U.S. economy relies in part on jobs generated or networked around the imports of manufactured commodities. The Ports of Los Angeles and Long Beach form a nexus of the global supply chain, where multinational corporations focus on every opportunity to keep labor costs low and profits high. One of the unrecognized links in the global supply chain is the port truck driver.
Port truck drivers play a pivotal role in the distribution of goods that makes them a critical piece of the profit puzzle. Professional drivers work long hours hauling nearly $4 billion worth of cargo every day from American seaports for companies like Walmart, Home Depot, Target, Costco and Polo/Ralph Lauren. Yet they often receive paychecks below the minimum wage, and on occasion, end up owing money to the firms that hire them.
Due to the privatization policies of the Nixon-Reagan era,
Los Angeles/Long Beach Ports truck drivers Mateo Mares and Amicar Cardona have returned to the jobs they had been fired from– not as misclassified “independent contractors,” but as regular company employees covered by federal labor laws. The men were dismissed by Green Fleet Systems (GFS) last January for disputing their contractor status, for filing state claims for stolen wages and for their open support of the Teamsters union.
In October, after a federal district court had ruled in Mares and Cardona’s favor and ordered the two drivers reinstated, GFS sought an emergency injunction from the U.S. Court of Appeals, Ninth Circuit. The appeals court denied GFS’s request, setting the stage for Mares and Cardona’s triumphant return to work today.
“America’s port drivers are the poster child for wage theft in America,” said Jim Hoffa, Teamsters General President. “Like millions of workers, drivers are treated like regular employees but illegally compensated as independent contractors.
Over a span of 20 summer days truck driver Daniel Linares had moved some 110 cargo containers at the Ports of Los Angeles and Long Beach for Pacific 9, a drayage company based in Carson.
Linares’ August 15, 2014 check showed his gross earnings to be $3191.87. But another line item on the check stub offered a nasty payday shock: By Pac 9’s calculations Linares owed the company $296.47. In other words, he had received a “negative” paycheck.
Pac 9, a company whose “180-plus independent drivers” annually deliver more than 100,000 containers from Southern California’s ports and whose “customer list includes many of the most recognizable Fortune 100 companies,” according to the company website, had handed Linares the bill for the insurance, registration and other expenses incurred for the truck he leases from the company. He had already paid up-front for its fuel.
Readers of Capital & Main are all too familiar with wage theft and job misclassification – twin plagues that afflict American workers, especially truck drivers at the Los Angeles and Long Beach ports. Employers use wage theft to shortchange employees out of their wages and benefits by shaving hours off time cards; job misclassification, on the other hand, allows companies to deny that the people working for them are even employees at all, but freelancers who are ineligible for government-provided benefits such as unemployment insurance and workers’ compensation. By misclassifying their workers, employers do not pay the kinds of payroll taxes that provide these and other services to workers.
Now, thanks to an epic investigative series published yesterday by the McClatchy news syndicate (publisher of the Sacramento Bee), in partnership with ProPublica, these two issues have been pushed before a national audience.
Truck drivers in California’s ports have been fighting for decades for rights most workers take for granted: The right to a minimum wage, the right to proper employee classification, and especially the right to form a union. In the wake of the deregulatory wave of the 1980s, downward pressure on trucking companies led to destructive competition, which led first to union-busting, and then to the widespread misclassification of truck drivers as independent contractors. This, despite the fact that legal and factual analyses have shown – theoretically in 2010 and based on a wave of then-recent rulings in 2014 – that these truck drivers are subject to the control and direction of the trucking companies they haul for. (Full disclosure: I was a co-author of the 2014 report.) Under any legal test, these are employee drivers being deprived of their employee rights; their condition has been compared to that of sharecropping and involuntary servitude.
One hundred twenty port truck drivers, responding to a mediation initiative from Los Angeles Mayor Eric Garcetti, agreed to end their strike Friday evening and are returning to work today. The Unfair Labor Practice walkout, which had no fixed end date, began June 7 against three harbor trucking companies (Green Fleet Systems, Total Transportation Services Inc. and Pacific 9 Transportation) that port haulers allege commit wage theft, engage in workplace retaliation for union organizing and misclassify their drivers as “independent contractors” rather than company employees.
The five-day strike was unprecedented for its length – and for the bad publicity it splashed on the three companies, which have also been on the losing end of a string of labor court and National Labor Relations Board rulings regarding their treatment of truck drivers. The strike saw the brief shutdown of several marine terminals, an impromptu concert for the strikers by protest rocker Tom Morello and a secondary protest in Manhattan Beach aimed at the Skechers shoe company,
Friday ended an historic chapter in the life of the Los Angeles-Long Beach waterfront as 120 truck drivers toughed out a weeklong Unfair Labor Practice strike. The work stoppage was aimed at three companies (Green Fleet Systems, Total Transportation Services Inc. and Pacific 9 Transportation) that port haulers allege commit wage theft, engage in workplace retaliation for union organizing and misclassify their drivers as “independent contractors” rather than company employees. Such a distinction allows the firms to treat their workers as second-class citizens and to avoid contributing payroll taxes to the state and federal governments.
With no end of the strike in sight, the week nevertheless drew to a close on a celebratory note, as seen in these photographs. A rally attended by the drivers and their supporters was held outside the Terminal Island facility of Yusen Terminals, where a cumbia band, Los Jornaleros del Norte, underscored the crowd’s high spirits.