Drayage laborers and labor

California’s New Strategy to Combat Labor Code Violations

Never one to shy away from passing innovative laws, the California legislature is considering a new strategy to curb labor law violations. The proposed legislation would try to influence the treatment of drayage laborers by making retail stores liable for labor code violations while those laborers handled their goods at port. This new strategy has the potential to create an entirely new category of legislation in the Golden State.

The bill was introduced by State Senator Ricardo Lara in April 2018. It seeks to hold retail companies liable for any violations that port trucking companies incur over labor law violations. By putting retail stores on the hook for these violations, legislators hope to shape who is allowed to work in the ports.

If it passes, the proposed law would create a list of trucking companies with a checkered past of labor law violations. To be put on the list, a trucking company would have to have unpaid final judgments for one of the following:

  • Failure to pay wages;
  • Imposing unlawful expenses on an employee;
  • Failure to remit payroll taxes; or
  • Other labor code violations.

Once on the list, a trucking company would be branded as a labor violator. As of right now, there is no clear indication about how one would get off the list.

If a retailer were to hire one of these companies, then they would be putting their own bottom line at risk. A retail store using a listed company would be equally liable for any additional labor violations that are incurred by the trucking company. This is a calculation that retail stores would have to take into account before doing business with any trucking company.

The Problem to be Solved

This legislation is the result of numerous labor code violations attributable to port trucking companies. According to reports, the California Labor Commissioner’s Office has won over $45 million in cases against port trucking companies for labor law violations. Thus, the state legislature is trying new methods to shape port trucking companies’ behavior.

Many of the violations involve worker classification and issues related to compensation. For example, it is common for a company to misclassify truckers as independent contractors, as opposed to employees, in order to avoid the otherwise stringent labor laws for which California is known. In these types of cases, the driver will get paid a pittance, lack the protections employees are afforded, and still face the threat of unemployment with no sense of job security.

These problems are happening in a legal climate that is already hostile to employers that prefer to hire independent contractors. After the Dynamex decision, companies are facing lawsuits from all sides as former service providers complain about being misclassified, underpaid, and denied benefits to which they were entitled because of their employment status.

Your Labor and Employment Partners in California

In this increasingly litigious environment, it is important to have the right legal team at your side. At the Royse Law Firm, our labor and employment practice group is ready to assist you with labor code compliance and other employment related concerns. Contact us today.

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