A recent study of the U.S. port trucking industry finds that the nation’s 110,000 port truck drivers, who move millions of cargo containers annually from port cities to store shelves across the country, are highly vulnerable to illegal employment classification schemes that subject them to poverty-level wages, frequent safety violations, and little autonomy from the employers who dictate their financial constraints. The report, conducted by labor market experts at the National Employment Law Project, Change to Win and Rutgers University, draws on in-depth interviews with drivers at the nation’s major ports and concludes that the typical port truck driver is misclassified as an independent contractor. The study also concludes that the toxic diesel-truck pollution in the air of the nation’s port regions is a direct result of the industry’s adoption of misclassification as a business model.
“The conditions under which these truckers work have virtually nothing in common with a true independent business. Trucking companies dictate how, when and where drivers do their work – leaving the drivers financially and operationally dependent on their employers day-in and day-out. Labeling them ‘independent’ is just a way for companies to sneak out the back door and skirt their responsibilities,” said co-author Rebecca Smith, an attorney with the National Employment Law Project.
The report comes at a time when misclassification – of grocery deliverers, farm workers, janitors, home care workers, construction workers and more – is under increasing scrutiny. A February 2009 U.S. Treasury Inspector General estimate found that the unpaid Social Security, Medicare, and Unemployment Insurance taxes that companies skirt due to misclassification have alone cost the nation $15 billion, and President Obama has made curbing misclassification a key part of his FY2011 budget as a means to save the government money and promote good jobs.
The report estimates from the prior surveys of 2,183 drivers in seven major ports that 82 percent of port truck drivers are treated as independent contractors, making it the dominant business model and profit-maximizing strategy in the sector. The report also finds that:
- Trucking companies make drivers responsible for all truck-related expenses including purchase, fuel, taxes, insurance, maintenance, and repair costs;
- Port truck drivers work long hours for poverty-level wages. The average work week among surveyed drivers was 59 hours. Average net earnings before FICA, income, and other taxes was $28,783 per year for contractors and $35,000 per year for employees. Minimum wage violations appear widespread;
- Surveyed drivers classified as independent contractors reported average net incomes 18 percent lower than employee drivers. Independent contractors were two-and-a-half times less likely than employee drivers to have health insurance and almost three times less likely to have retirement benefits;
- Economic pressures encourage widespread evasion of safety regulations. Drivers commonly use dangerous and illegal equipment, and safety limits on working hours and vehicle weights are routinely ignored;
- Low-wage independent contractors bear the industry’s capital expenses by owning and operating the only equipment they can afford – the oldest diesel trucks on the road. The industry’s adoption of misclassification as a business model is a direct source of the environmental and public health crises surrounding the nation’s ports.