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Misclassification of drivers to avoid California workers’ comp?

If you drive a little over 100 miles due west of Coachella Valley, you come to Long Beach, home of a trucking company that recently lost an interesting case before the California Supreme Court. The company was accused by the state of misclassifying truck drivers as independent contractors.

The company argued that its actions were exempted from state labor and insurance laws by a Federal Aviation Administration Authorization Act which prevents the state from regulating motor carriers. The court’s ruling in the matter ends the company’s practice of not paying unemployment insurance taxes and denying truckers workers’ comp benefits when they are injured on the job.

The company apparently used a series of bookkeeping maneuvers as part of its efforts to circumvent employment laws. The two defendants in the case were the Long Beach trucking company and the company’s owner, manager and dispatcher.

The company’s proprietor also separately owned a fleet of 75 trucks which he leased to his trucking company. He then had an independent company hire the drivers to drive the leased vehicles, then classified the truckers as independent contractors though they themselves owned no trucks, did not own the equipment or tools used and did not make any investments in the vehicles.

The truckers also took all their instructions from the defendants and didn’t even have Department of Transportation permits to haul cargo independent of the Long Beach company.

Let’s hope this case and others like it help demonstrate to company owners that they are obligated by law to help provide workers’ compensation benefits to employees injured while working. Far too often, companies try to deny employees the benefits they have earned and need. Because the benefits are so critical, many workers turn to attorneys experienced in defending clients’ rights and interests in the workers’ comp system.

Source: California Supreme Court, The People v. PAC Anchor Transportation, Inc., accessed Aug. 29, 2014

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