Pacer Cartage, a California logistics company, is being ordered to pay more than $2.2 million in back pay to short-haul truck drivers it illegally misclassified as independent contractors, Think Progress reports. The California Labor Commissioner's Division of Labor Standards Enforcement says that the company knew or should have known that the drivers were employees and not contractors and Pacer is required to pay restitution, attorney's fees and interest.
Misclassification is a tactic corporations engage in to try to exempt themselves from having to comply with the Fair Labor Standards Act, minimum wage laws and other laws protecting workers. If employees are classified as private contractors instead of employees, they are excluded from coverage under many labor laws and can be paid less. The truckers, for instance, were not paid by Pacer for time spent doing things like waiting at a port to pick up a load or for reimbursement of job-related expenses.
Pacer and its parent company, XPO Logistics, are one of the leading firms in the trucking industry, and it is expected that the ruling will force the industry to make changes in their business practices. The company plans to appeal the ruling, but recent rulings, according to Think Progress, have gone in the favor of workers every time. Workers are beginning to stand up to such practices, not just by filing charges with state and national labor boards, but also by going on strike at numerous West Coast ports.