California Trucking Wage Law Creating Controversy

By Mark Brodie
Published: Friday, March 22, 2019 - 11:45am
Updated: Friday, March 22, 2019 - 3:44pm

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Under a new California law that took effect on New Year’s Day, the state’s labor commissioner has published a list of trucking companies that have either not paid their drivers, or have been issued judgements over wage issues.

And the law, known as Senate Bill 1402, goes even farther by making retailers co-liable if they work with a trucking company on the list.

"It gives retailers a choice and some transparency on who they’re doing business with," said Shane Gusman, legislative director for the California Teamsters Public Affairs Council. "They can see if a company is on the list and they know what it means."

Gusman argued drivers are often misclassified as independent contractors — and that even when wage claims against trucking companies are upheld, they still don’t pay the drivers.

But critics of the new law worry about its impact on smaller trucking firms. Joe Rajkovacz, director for governmental affairs for the Western States Trucking Association, calls many of the judgements themselves “ridiculous.”

While larger shippers are going to be very savvy, and their legal departments are gonna make sure that they’re off those lists, the same isn’t true for the majority of shippers, where they themselves are small businesses," he said. "Really, frankly, and in our opinion, a lot of these businesses aren’t even aware that they have this liability right now."

"Make no mistake: these companies know exactly what’s going on," Gusman said. "They’ve engaged in this bad behavior to cheat the system, and they make money off of it and they’ve been caught. So, it shouldn’t come as a surprise for these companies that this is going on and we shouldn’t advantage people who break the law with our business."

Gusman said since the law only took effect a couple of months ago, he hasn’t heard any anecdotal evidence yet of what kind of impact it’s having. But Joe Rajkovacz said he’s aware of some attorneys advising their clients to minimize their legal risk, by only working with bigger shippers. He considers that to be unfair competition in the trucking industry and worries the practice will spread to other states.

"There are things that tend to occur in California, and this, what we view as this constant fight against having independent contractors — owner-operators in the case of trucking — in the marketplace, California has been ground zero. But it has already spread."

In a statement, California’s labor commissioner said the new law “incentivizes trucking companies to pay up on judgements and put earned wages into their drivers’ pockets.”

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