Port Trucking Company Pays for Misclassifying Employees
A great deal of attention was given recently to a case developing in the Los Angeles and Long Beach area concerning a company that misclassified employees. After a lengthy procedure of review and mediation, the company has agreed to pay $5 million to settle these allegations. QTS Inc. was subject to legal action by two separate groups of activists who maintained that employees had been unfairly listed as independent contractors. Not only did this allow the company to avoid taxes, but it allowed them to stick the drivers with the bill for maintenance, insurance, gas, and other expenses.
The trucking industry is one where many drivers give up the freedom of functioning as an independent employee to have their expenses covered by a carrier. This also usually gives them access to benefits and higher pay. But by treating drivers as employees and not giving them due compensation, QTS Inc. has fallen under serious criticism. After the voices of protestors were heard in a legal environment, a settlement has been reached.
The settlement is set to be approved by a judge next month and if the deal goes through, it would apply to almost 400 truckers. This group is primarily made up of Latino immigrants and Korean-Americans. Strikes and lawsuits pertaining to employee classification have been common throughout previous years. While most drivers that work at the ports function as independent contractors, not all of them were given freedom to choose which loads they took and how much they were paid.
Nicole Ochi, supervising litigation attorney for Asian Americans Advancing Justice said: “Unfortunately, misclassification is the port industry norm.” While the company had filed for bankruptcy protections once accusations began surfacing, the suit alleges that this was done to avoid liability. Nonetheless, the settlement filed in Los Angeles Superior Court doesn’t acknowledge any wrongdoing.