California Legislature approves bill to aid port drivers

September 14, 2021

Land Line Staff

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One bill headed to the California governor is touted to end what is described as exploitation of port drivers at the state’s 11 ports and various inland distribution centers.

The Legislature approved a bill last week to bolster a 2018 state law intended to deter trucking operations from misclassifying truck drivers who haul cargo from the state’s ports.

SB1402

Previously SB1402, the 3-year-old law discourages shippers from using port drayage motor carriers that have unpaid wage, tax and worker’s compensation liabilities.

The rule requires joint and several liability for customers who contract with port drayage carriers with unsatisfied judgments regarding unpaid wages, damages, expenses, penalties and workers’ compensation liability.

The state labor commissioner is charged with creating a list of trucking companies to show who has failed to pay final judgments. Retailers that hire port trucking companies with final judgments would be liable for future state labor and employment law violations by these companies.

There is a 90-day grace period from the time a carrier is included on the list. The grace period gives retailers time to cancel contracts before joint liability begins.

SB338

On Sept. 9, state lawmakers approved a bill to create and expand reporting of trucking operations found to violate state laws on driver classification, other health and safety violations, and any liability owed to the state.

Sponsored by Sen. Lena Gonzalez, D-Long Beach, SB338 would expand the types of violations that cause a contractor to be placed on the “bad actor” list to include a final order from the Occupational Safety and Health Appeals Board finding that the employer committed a violation.

A list of contractors would be created that violate a law or regulation intended to protect employee health and safety and have received a final order or judgement from a state or local entity pertaining to that violation.

Additionally, a contractor who has been placed on the list can only be removed once a determination has been made that the employer has remedied the violations.

Information about violators also would be publicly available.

“SB338 will hold shippers and retailers accountable under labor, employment, health and safety laws,” Gonzalez said in recent remarks. “Port truck drivers deserve to have fair wages, disability insurance, paid sick days, (personal protective equipment) and sanitized equipment to perform their duties at work.”

The bill now heads to Gov. Gavin Newsom’s desk.

OOIDA supported 2018 law

The Owner-Operator Independent Drivers Association continues to review changes to the 2018 law that SB338 follows.

The Association supported the 2018 law, also known as SB1402.

Mike Matousek, OOIDA’s director of state legislative affairs, has said many of California’s port drayage drivers are mistreated. He cited the long hours drivers work in “awful conditions” while being “utterly undercompensated.”

Matousek added that the workers are also often misclassified through “lease-purchase” agreements. He described the agreements as “schemes where motor carriers lease a truck to a driver with the promise of fair compensation, future ownership of the truck, and ‘independence’ from traditional employer-employee requirements.”

In reality, these indentured servants are paid pennies on the dollar, will likely never own the truck, and have zero independence.”

He said SB1402 addresses concerns about lease-purchase agreements without jeopardizing legitimate business agreements between motor carriers and leased owner-operators.

Unemployment insurance

One bill that came up just shy of passage was intended to minimize the incentive to misclassify drivers.

SB700 sought to take the burden off drivers to cover payroll taxes for unemployment insurance. Instead, trucking companies would be responsible.

Sen. Maria Elena Durazo, D-Los Angeles, described the bill as directing the Employment Development Department to give misclassified port drivers their deserved unemployment insurance benefits and “to hold companies accountable who cheat the state out of taxes and their workers out of unemployment insurance.”

The Senate-approved bill did not receive a third and final reading in the Assembly before the regular session adjourned. LL

More Land Line coverage of news from California is available.

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