Under California Labor Law, Employees Are Not Independent Contractors

Long Beach, CA Truck drivers improperly classified as independent contractors by their Gardena-based employer had their final day in court on the last day of February, when a California labor law trial, on appeal, found in favor of the plaintiffs.

According to a release by PR Newswire (3/1/13), drivers piloting trucks on behalf of Seacon Logix were made to sign agreements with their employer, labeling them as independent contractors. As such, according to California labor code, the drivers would not be eligible for overtime or other provisions that would be due an actual employee of a firm.

However, according to the report, when four Seacon Logix drivers filed wage claims with the Long Beach office of the California Labor Commissioner, it was determined upon further investigation that Seacon exercised sufficient control over its drivers that a designation of independent contractor proved invalid under California labor employment law.

The drivers reported to the Division of Labor Standards Enforcement (DLSE) that business expenses were not reimbursed by the company, together with deductions deemed unlawful under California state labor law. Those deductions, it was alleged, included weekly truck rental fees and liability insurance costs, according to the report.

The original hearings in the case took place in November 2011, and the decision went in factor of the plaintiffs. At the time, Seacon Logix was required to pay $105,089.15 for violations of unlawful withholding of wages, interest and waiting time penalties under California prevailing wage law.

Seacon Logix appealed to the Superior Court. On February 28, the California Superior Court upheld the original finding and encumbered Seacon Logix to pay its drivers $107,802.00, including interest. It was reported that drivers will see the full benefit of the award.

In a statement, the California Labor Commissioner said, “In this case, drivers had signed agreements labeling them independent contractors but the Court saw the truth behind the label.” Labor Commissioner Julie A. Su went on to say, “The Court found that the company exerted sufficient control over the drivers such that the drivers were employees of the company and thus, enjoy all basic labor law protections.

“This case highlights the critical need for labor law enforcement, particularly where misclassification cheats hardworking men and women like these port truck drivers out of the full pay to which they were entitled,” continued Labor Commissioner Su, in addressing the California employee labor law case. “This is wage theft and we will do everything in our power to stop it.”