Post by HardTimeTrucker on Sept 6, 2008 22:42:45 GMT -5
State: Port haulers breaking law
By Kristopher Hanson, Staff Writer
09/05/2008
LOS ANGELES - California's top attorney sued a pair of trucking companies working in the harbor Friday alleging they routinely violate state labor laws and fail to pay taxes.
The lawsuit claims Wilmington-based Pac Anchor Transportation and a businessman named Jose Maria Lira mislabeled their drivers as "independent contractors" to avoid paying taxes, benefits or minimum wages.
Attorney General Jerry Brown promised several more lawsuits against port-area trucking companies in coming weeks.
"We're cracking down on these two companies and investigating several others that are taking advantage of their workers and cheating the state out of payroll taxes," Brown said. "These are low-paid truck drivers working long hours under onerous conditions who are not getting the benefits they deserve."
Currently, more than 90 percent of the roughly 17,000 harbor-area truck drivers are listed as "independent contractors." These drivers are paid by the load and responsible for their own trucks, insurance, fuel and other costs.
The attorney general said investigators found that both companies used "shell games" to avoid detection by the IRS or state labor agencies.
"(Lira) controlled all aspects of his drivers' work, yet classified his employees as independent contractors and made them sign documents stating that they were independent," the complaint states.
The investigation found that Lira would purchase trucks, lease them to his drivers, then demand 50 percent of their gross earnings, plus a 10 percent "management fee."
Brown further alleges Pac Anchor provided drivers with 1099 tax forms at the end of each year - forms normally provided only to legal employees.
In the suit, the state seeks $4.2 million in compensation and back taxes. The suit was filed in Los Angeles Superior Court.
Neither company could be reached for comment Friday.
Brown's stance mirrors an argument advanced by Democratic Presidential candidate Barack Obama in a letter to Long Beach Mayor Bob Foster in December.
"Many of these truckers may be legally misclassified," Obama wrote. "Workers misclassification is an issue I have worked on at the federal level to remedy because it hurts workers and costs the taxpayer billions in uncollected taxes."
Obama, who indicated immigrant port truckers are often exploited for low wages, previously introduced federal legislation that closes legal loopholes used by some employers to misclassify their workers as independent contractors.
The lawsuit comes as port authorities in Long Beach and Los Angeles prepare for a legal showdown Monday with a national trucking association over aspects of the ports' "Clean Trucks" program.
The truck plan seeks to rid the harbor of all trucks not meeting 2007 emission standards by Jan. 1, 2012. The trucking association sued when the ports' adopted taxicab-style concession agreements to control access to the harbor.
Truckers believe the rules violate federal trade laws.
A federal judge is set to hear the case Monday.
By Kristopher Hanson, Staff Writer
09/05/2008
LOS ANGELES - California's top attorney sued a pair of trucking companies working in the harbor Friday alleging they routinely violate state labor laws and fail to pay taxes.
The lawsuit claims Wilmington-based Pac Anchor Transportation and a businessman named Jose Maria Lira mislabeled their drivers as "independent contractors" to avoid paying taxes, benefits or minimum wages.
Attorney General Jerry Brown promised several more lawsuits against port-area trucking companies in coming weeks.
"We're cracking down on these two companies and investigating several others that are taking advantage of their workers and cheating the state out of payroll taxes," Brown said. "These are low-paid truck drivers working long hours under onerous conditions who are not getting the benefits they deserve."
Currently, more than 90 percent of the roughly 17,000 harbor-area truck drivers are listed as "independent contractors." These drivers are paid by the load and responsible for their own trucks, insurance, fuel and other costs.
The attorney general said investigators found that both companies used "shell games" to avoid detection by the IRS or state labor agencies.
"(Lira) controlled all aspects of his drivers' work, yet classified his employees as independent contractors and made them sign documents stating that they were independent," the complaint states.
The investigation found that Lira would purchase trucks, lease them to his drivers, then demand 50 percent of their gross earnings, plus a 10 percent "management fee."
Brown further alleges Pac Anchor provided drivers with 1099 tax forms at the end of each year - forms normally provided only to legal employees.
In the suit, the state seeks $4.2 million in compensation and back taxes. The suit was filed in Los Angeles Superior Court.
Neither company could be reached for comment Friday.
Brown's stance mirrors an argument advanced by Democratic Presidential candidate Barack Obama in a letter to Long Beach Mayor Bob Foster in December.
"Many of these truckers may be legally misclassified," Obama wrote. "Workers misclassification is an issue I have worked on at the federal level to remedy because it hurts workers and costs the taxpayer billions in uncollected taxes."
Obama, who indicated immigrant port truckers are often exploited for low wages, previously introduced federal legislation that closes legal loopholes used by some employers to misclassify their workers as independent contractors.
The lawsuit comes as port authorities in Long Beach and Los Angeles prepare for a legal showdown Monday with a national trucking association over aspects of the ports' "Clean Trucks" program.
The truck plan seeks to rid the harbor of all trucks not meeting 2007 emission standards by Jan. 1, 2012. The trucking association sued when the ports' adopted taxicab-style concession agreements to control access to the harbor.
Truckers believe the rules violate federal trade laws.
A federal judge is set to hear the case Monday.