the BIG RIG Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports a survey and research report

Rebecca Smith Dr. David Bensman Paul Alexander Marvy Authors Rebecca Smith, National Employment Law Project

Dr. David Bensman, Professor, School of Management and Labor Relations, Rutgers University

Paul Alexander Marvy, Change to Win

With a foreword by Wade Henderson, President and CEO The Leadership Conference on Civil and Human Rights Table of Contents Foreword 1 “Towards an End to Sharecropping on Wheels” 1 Acknowledgments 3 A Note On Our Collaboration 4 Executive Summary 5 Major Research Findings 6 Policy Recommendations 7 Introduction 9 “What Independence?” 9 The Spread and Consequences of Independent Contractor Misclassification 9 Independent Contracting and the Environmental Crisis In Port-Adjacent Communities 10 Are Port Truck Drivers True Independent Contractors? 12 Post Script 12 Sweatshops on Wheels: The Economics of Port Trucking 13 Deregulation and the Rise of Independent Contracting 13 Sources 13 “Ferocious Competition”: Port Trucking and the Goods Movement System 15 Independent Contracting is the Dominant Model of Employment in Port Trucking 16 Port Drivers Make Poverty Level Wages 16 Few Drivers Have Health Insurance 17 Long Hours Are Routine in the Industry 18 Major Findings: Integrated Driver Survey and Industry Literature Review 18 Are Port Truck Drivers Independent Contractors or Misclassified Employees? The Analysis 20 The Legal Framework for Determining Employment Status 20 Research Methodology 21 Research Results 22 “Behavioral Control”: The First Dimension of the IRS Test of Employment Status 22 “Financial Control”: The Second Dimension of the IRS Test of Employment Status 27 “Type of Relationship”: The Third Dimension of the IRS Test of Employment Status 31 Conclusion: The Typical Port Truck Driver is a Misclassified Employee 33 Recommendations 35 Endnotes 38

concentrated whilethe average inthe of the worker hands few. at the timeofthis writing, Infact, increasingly inwhich is wealth inAmerica greatly contributing income to the inequality rising have employees, foundcorporations ofandmistreat their to systematically ways advantage own take attack onournation’s It aproblem is endemicto ourentire working families. economy, inwhich is an pernicious example drivers ofa truck port broadercontext, of Put inits the misclassification be eliminated. must is simplyIt ofmisclassification unacceptable. –thisMake policy nomistake employer growing. practice is has on and where this countless unscrupulous this other industries misclassification affects corrosive this situation Ifweignore to inand around allworkers. our nation’s accept wetacitly the ports, nullifies thatthe protections haveemployees the extended democracies andother advanced U.S. Misclassifying laws to workers prevent labor unions. forming from inAmerican other weaknesses with along misclassification andthe have adjacent used Companies also communities. families, their drivers, ofthese andhuman to rights defend asociety, civil the upon essential As weare called community.another concern rights to the civil andournation’sdrivers pay residents the their price ofthis exposure whichyet with health, coastal is many is the national times average. pollutants ofdiesel The adjacent the level high communities, communities around have them. Inport- port andthe onthe rigs vulnerable drivers polluting andenvironmental health the impact bythe severe compounded is amongworkers, of poverty cycle which promotes a trucking, port of schemes economic andleasing The troublingmodel as workers onwheels.” misclassified these “sharecroppers wesee laws, oftraditionallabor the andlacking protection protections enjoy. rights oftraditionalcivil Devoid are the yet without control overtheir contractors workemployees, that independent legitimate truly of benefits They and without toil the protections workers both sufferThese worlds: theworstof are “payingthey to work.”by several, maintenance. articulated and manyas As realize drivers of these and operation, ownership, oftruck the bear behind workerscosts to thewheel misclassified require schemes leasing Theunsustainable line–rather companies. than ontrucking poverty the federal orbelow near them andtheir families keeping wages, level ofcolor andmake poverty are people –many drivers ofwhom onindividual andmaintaining expensive for trucks buying responsibility financial substantial places also industry, misclassification trucking employee ofthe port In the case for allworkers. standards labor down competitors anddrives law-abiding over employers advantage anunfair irresponsible gives also insurance. Misclassification as unemployment benefits are for ineligible such they critical their workers jobs, these lose law communities andlabor havelaws that rights Andshould fought hard so to ourcivil secure. andemployment labor ofmost the protection workers outside whofall become employees these Thus disguised, andavoid anexcuse taxes. tocosts paying as cut often contractors, independent as by their employers are misclassified millionsofemployees industries, Across Rig. TheBig report, inthe collaborative detail groundbreaking ingreat described as workers’ to erode rights, used tactics contractorsas independent potent continues be oneof ofemployees the most to Misclassification ConferenceLeadership The and onCivil Rights Human and CEO President By Wade Henderson “Towards anEndt Foreword o SharecroppingonWheels”

1 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports continues to struggle to pay rent or a mortgage, struggle rent to medical pay to continues bills, keep to and food table, the on $1.659 of just earning postedrate annual at an profits best U.S. their the in companies quarter ever, the highest trillion.is That the government figure since recorded began keeping over track six decades ago. 60-year same In the period, Human Rights on Civil has and The Leadership Conference partnered with labor key pass to civil and enforce rights. rights strengthen workers’ to and laws Our founders outstanding the a distinguishedwere director NAACP executive the of – Roy Wilkins; leader of the Jewish – Arnold legendary the Aronson; and community Brotherhood of the of Sleeping founder visionary great A. – the Randolph. Philip With on Washington and leader March Car of the Porters civil the rights and labor King, and Martin Luther Jr., Reuther, leaders A.like Randolph, Philip Walter interests, common values, we share common movements came understand to that and common always rights workers’ have been The Leadership Conference, civilhuman rights. and goals. To Win, and Employment Project,National Law the commends The to Leadership Conference Change David Bensman, Rutgers renowned at the professor of labor relations and employment studies Dr. report publishing this for of misclassification pattern disturbing and shedding on the light University, portin the truck rights upon tramples driving which won workers’ and civil hard industry, rights gains.consequencesrobust the The confront policy mustto help recommendations be implemented of misclassificationfederal, and localthe at state, levels. Our with discrimination, organized work focus workplace to labor on eliminating continues working safe and regulations laws designed and enforcing fair ensure pay, to opportunity, expanding conditions, organize. right to and the the The Big laborto Rig makes and an contribution civilessential and rightsservesmovement as industry-wide a call action address the to to misclassification of port truck drivers. The looksLeadership and NELP Conference forward employer end to joining to with Win Change to misclassification of port truck drivers and misclassificationother industries. in

2 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports courageously shared their time, sensitive personal information, and vast experience. information, andvast their personal shared time,sensitive courageously workers these generously and out, speaking to those retaliate against known face ofanindustry York, New Beach, Jersey. Long andNew Angeles, Inthe Los inSeattle,Oakland, we interviewed drivers –andallthe port to us share story for his trusting Galvan to all,wewant Above thank Max employment drivers’ documents. andhelp analyzing surveys driver conducted of previously the aggregation including guiding throughout the invaluable project, assistance provided Project Law of Bernhardt to fromthe draft completion.National Annettepatiently Employment offered feedback ConferenceLeadership ofThe and Chanin on Civil Rights Human Lexer andRobert Quamie ofwhich here. weaggregate the results drivers, port with conducted they andfor the surveys work, intheir contained published industry trucking Yael Harrison, Robert andHoward for Greenwich into the insights Consultants, the Bromberg, port We to are Jon grateful Haveman,CGR Management Monaco, Kristen Jaffee, David Jobs, Port andtheir comments thoughtful ontheir experiences. forClinic conducting interviews International theofLaw from SeattleUniversity Human School Rights Casebolt andJason Emerson, Brennan Gonzales, Randy Bette Fleishman, Antkowiakstudents andhis Thomas Professor well as as WorkSocial Monmouth from University, Cullinane Sara York at the New ofLaw, University School student agraduate WeEconomy, in thank Molly Greenberg, to want especially also andLAANE. Working BayAlliance for aSustainable East Sage, Families Sound including Puget organizations goto staff at thanks for Partnership special protocol andconducting interviews, the interview For sites. their hard ofthe work ineach port teams testing research meticulous dedicated, without wouldnothave happened andemployment documents interviews driver port of The analysis ofthis report. anddrafts issues, legal report, inthis presented onthe research Human core for lendingtheir timeandexpertise original Rights ofTeamsters,Brotherhood LLP, Carder Leonard ConferenceLeadership andThe onCivil Sage, Sound theInternational staff at Puget andpolicy considerable organizers, debt to the attorneys, stepofthe way.and Rutgers every University We andguidance for their support owea also We to Change Win, at the to National are ourcolleagues grateful Project, Employment Law talent. and wisdom up who offered their time, across thepeople spread country of dozens of of the efforts because only possible was This report Acknowledgments

3 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports century. century. st This reportThis to protectingthe American grewthe 21 commitment Dream in out of our joint ur Collaboration Our On Note A The National Employment Employment ProjectNational Law The is an advocacy organization devoted to improving economic opportunities and security laborfour of a federation unions working families. for Win, Change to with million members, five worksto secure family wage jobs, ahealth care, affordable secure retirement, dignity and all workers. for Both organizations dedicated are policies promoting to that protections. workplace good and enforce create and expand jobs, upward strengthen mobility, Rebecca has has she Smith helped been modernize advocate over 30 years. for a worker Recently, programs, insurance rights unemployment protect human state to laws applied international labor laws.workers, organizingand collaborated U.S. with immigrant worker groups enforce to Law Employment Project, an attorney National withSmith, misclassification the the oversaw analysis. Marvy Alexander Paul is an attorney and researcher whose career has spanned of public fields the health, civil and criminal system justice work, reform rights. and workers’ Over last the three years, he has collaborated with truck drivers,groups, community labor unions, and environmental port the of reform trucking industry comprehensive advocates encourage to in Washington research and drafting, collaborative the coordinated and led Marvy, the Win, of Change to State. aggregation analysis. David Bensman is a Professor in Department of Labor at Relations Dr. and Employment Studies has He published widely on American labor history University. impact of globalRutgers and the people. driver on working economic one of the integration surveys co-authored He we have that Survey at the New Jersey work, on in this drawn Ports Report, and produced on Port an Truckers’ important review national published industry, by Dēmos, Down of the the Low Road: Port Trucking A Sad Story Bensman led of Deregulation economic of the the and historical examination . Dr. industry’s structure.

4 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports fraction ofthe $70,000 fraction $24and$40for haul, each atiny between earnings net reports Max costs, operational to truck Due warehouses that sit in our country’s port complexes and the major urban areas that surround them. port truck drivers moved millions of cargo containers between the marine terminals, railheads and industry because of where and how that industry operates. Last year, Max and about 110,000 other The debate over workers’ employment classificationhas still further consequences in the porttrucking companies that andundercuts playrules. by the andbenefits, protections workers ofimportant strips contractorsas independent taxdollars, drainspublic coffers of ofemployees misclassification because ofgovernment aresuch with questions nowgrappling atPolicymakers alllevels anemployee? heactually Oris asmallbusiness? really Is Max andwehelp them buildtheir smallbusinesses.” earnings, middle-class produces We whomovethe cargo ofourcustomers. owners work that for full-time create opportunities quite differently: likebusiness Max anddrivers firms theindependent trucking “We support between the relationship hecharacterized recently Congress, before promotes the industry. Whentestifying that anassociation Angelesandheads inLos company trucking based Fred aport runs Johring are howthings doneherejust at the ports.” acontractmake you sign saying that that’s you’ll only work for them. Iwent itbecause alongwith don’t They independence? fire Most you. “What uscompanies haul let replies: for anyone They’ll else. Max relationship his about the with onlycompanyasked 13years, for worked overthe last hehas Butwhen maintenance, andrepairs. taxes, fuel, including leasing, hedrives, ofthethe truck costs contractor.independent bythenothourly, paid load, heis ofthat, for all responsible andis Because California’s at company driver Southern His atruck himan is calls Galvan Max seaports. Executive Summary This debate and its consequence have engaged several seemingly unlikely in organizations seemingly several debate haveThis consequence engaged andits inorder to replacement for drivers makeemployee truck companies andmaintenance. responsible of which use require policies for mandatory –advocates organizations andlabor civic, public health, –analliance ofenvironmental, community, Ports &Safe forClean inplace. The Coalition system contractingthe independent will that programs keep loan voluntary for publicly-financed advocating the forResponsible group, Coalition Transportation should operate. Anindustry programs , is become a howdetermining these core issuein has drivers port of The employment classification have agencies. programs come state from andlocal Tens trucks. port ofmillionsmore for replacementover $40millionto replace old,diesel-spewing EPA The pollution. amajor diesel sourcegranted is of deadly trucking has itself port consequences: on the agree observers allother industry virtually The and Environmental Agency Protection U.S. literally together. holdsome cords andbungee tape Duct bigrigs. diesel maintained ofold,poorly full is trucking port aresult, As contractors. independent are as treated they for because are responsible they have, they trucks ones ormaintaindecentcannot affordthe liketrucks him anddrivers that means Max wages of level This around $10anhour. Max’s hourly outto pay works averageweek, $28,000tonet $30,000.At of59hoursper the industry 4 worth of goods in the typical freight container. inthe typical ofgoods worth At the endofthe year, hewill 1 2 3

5 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports

5 Port drivers are subject to strict behavioral controls. Trucking companies determine how, how, determine companies Trucking controls. behavioral strict to subject are drivers Port tests, drug inspections, truck impose They work. drivers sequence what in and where, when, and evaluated, monitored, regularly is behavior Drivers’ requirements. reporting stringent and disciplined. the rates control drivers financially are Port dependent unilaterally on truckingthat companies offer services a time, do not at drivers paid. one trucking are Drivers for that work company to work. for low-wage company Like other dependent on that general public,the entirely and are employees, drivers’ only means increasing for earnings their longer hours. work is to Drivers perform essential the tied each tightly other. to are drivers companies and their Port years Drivers(and most for often work sole) services trucking of the they companies for. work signs same company; the and permits; usefor company as others themselves to being represent company. the independently of their work offer company;from the and rarely

• • • Major Research Findings Our in-depth interviews with ports major drivers at country the around and review of their of hallmark is the that documentsemployment reveal autonomy drivers lack the commonly that tied core the to truck drivers intimately Port are an independent businessperson under federal law. services nation’s the at of oversight absence Given the them. hire and functions that companies of the ports, drivers port in the trucking industry highly vulnerable are misclassification. to discussions classification about employment Sierrathe – organizations Americanthe like Club, Lung Council Association Church the and of California, New in League the York, of Conservation Voters Seattle. of Greater crisisthe environmental in aboutrole of independentcontracting affectingthe This swirling debate drew communities topic, this us to depicted as conditions pictures of working the did port-adjacent by prior industry observers.classification the question of is – what central drivers? –status is The can be an empirical one that answeredultimately by applying a set facts of proper the legal to standard. status, first-of-its-kindIn this employment analysis we of workers’ usedmulti-methodresearch a design review of three prongs:consisting (a) an in-depth literature industry’s covering the structure and economics; (b) re-analysis a and aggregation of 10 surveys seven at of 2,183 workers major ports; arrangements an analysis work of a diverse of the group of drivers firmsthey and the and (c) original on exhaustive, drawing interviews and collected documents employment for, work such as contracts,leases analyze and policydata from these the sources, manuals. especially We the interviews and collected documents, in status most the test stringent of employment to according used Revenue Internal Service. by the American law, This analysis concludes the that typical port truck driver is misclassified as an independent contractor.

6 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports Specifically, we recommend that: werecommend Specifically, setting. policy andlocal enforcement, litigation, incentive funding, that tools include state agency andfederal ofoverlappingthrough coordinated policy use best approached is consequences andits industry trucking port in the Eliminating misclassification Policy Recommenda at thenation’s crises health andpublic the environmental ports. and violations safety to linked directly be can trucking port in drivers of The misclassification industry. trucking port ofthe economics the drives contractors independent as drivers of Classification • • • • • • •

driver misclassification and immediately establish the conditions for a revived, cleaner industry. cleaner establish and immediately the conditions for a misclassification revived, driver address operate. Such woulddirectly requirements they for trucks responsibility ownership companies to employ andtake trucking drivers requiring rules adoptuniform U.S. ports model. as abusiness adoptionofmisclassification ofthe result industry’s are adirect surrounding the nation’s onthe road.Theenvironmentalcrises andpublichealth trucks ports afford can diesel – the oldest the they andoperating onlyequipment byowning expenses capital the contractors industry’s independent have bear that concluded low-wage observers Industry working hoursandvehicle are routinely weights ignored. on limits Safety equipment. andillegal dangerous commonly Drivers use of safetyregulations. evasion economicwidespread encourage pressures how describes The literature on the industry benefits. employee drivers to have health insurance and almost three times less likely to have retirement than employee drivers did. Independent contractors were two-and-a-half times less likely than In driver surveys, independent contractors reported average net incomes 18 percent lower widespread. to be appear violations Minimum wage for for contractors employees. year year $28,783per and$35,000per was income, andother taxes Average FICA, before 59hours. average earnings was work net week the drivers, Amongsurveyed wages. workPort longhoursfor drivers poverty-level truck insurance, maintenance, costs. andrepair taxes, fuel, for alltruck-related companies responsible make drivers includingtrucking purchase, expenses andother employment arrangements, leases, contractingThrough independent agreements, contractors. all port drivers. Few other industries rely on anywhere near this proportion of independent independent contracting as the industry’s dominant business model which sets standards for 110,000 port truck drivers are treated as independent contractors. Industry analysts identify Based on surveys of 2,183 drivers in seven major ports, we estimate that 82 percent of the nation’s tions

7 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports Congress pass Clean the (H.R. of 2010 Ports Act allow port to 5967) address to authorities misclassification or efficiencyimpacts, it affects where environmental the of safety, port trucking operations. bestin the authorities sit appropriate position Port available enforce to and safety, negative environmental, the practice’s address classificationthereby and worker operational consequences. comprehensive agencies the IRS, implement The enforcement and state Department of Labor, strategiestax, of enforcement employment, port in the and safety laws trucking industry. portin the Concerted trucking enforcement industry directly address violations that would help harm numbers of port large to ensuringthe industry truck driverscontribute and significantly is free misclassification. rampant of now and local state, agencyFederal, funding diesel-truck for emissions-reduction programs be made Taxpayer dollars end driver misclassification. on adoption of requirements that contingent violates labor a system that laws be to reinforce pumped programs that into not continue should economy. and is and the destructive environment the to • • •

8 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports The SpradandConsquncsofIndpntonrac contractors? independent as the whoare tens ofotherdesignated drivers ofthousands hard-working Andwhat employee? of headisguised Oris year? each 1099form anIRS whenhereceives business anindependent as treated properly being IsMax question: Max’s animportant raise circumstances period.” are goingto paythey us, for wenegotiate? paying The thatthe is howcan company retailer so load, us how just tells much Ever. cargo load. of asingle It’s do.We can drivers weport notsomething don’t howmuch know even a“take-it-or-leave-it” receives Max the rate price negotiated “I’ve for container each never hehauls. that’sfor them. Iwent itbecause alongwith are howthings donehere just at the ports.” fire aMost you. make contract companies yousign thatsaying you’ll onlywork anyone They’ll else. don’t They independence? “What us haul replies let thatfor about Max designation, When asked contractor. asanindependent That himinstead company 13years. classifies for the past source sole ofwork his company bythe anemployee trucking that as been has herecognized Nor is cargo hehauls. orany whose oftheStores, corporations other giant 99¢Only notwork for BigLots!, Nestle, does ButMax andtheir communities. surrounding Beach AngelesandLong through the andwebcams ofLos Ports mattresses, televisions, oftennis shoes, full containers hauled For hehas twenty oureconomy almost years, moving. literally keeps Galvan Max “Wha Introduction U.S. DEPT OFLABOR U.S. DEPT DunlopCommission” –“The other taxes.” and income, personal unemployment, sums security, in uncollected social large federal treasuries and state which independent contractors, costs as ofemployees for misclassification law The incentives should notprovide and soforth. independent business, outtothe public anthemselves as multiple hold clients, serve of loss, the who risk entrepreneurs bear – appropriate for whom itis only on those contractor status law should confer independent “The t Indepnc?” 30 percent oftheir payroll costs. as as much can save businesses Misclassification contractors. independent as their employees misclassify percent ofbusinesses recently found that ofLabor upto 30 Department the contractors; U.S. independent as employees ofcompanies numbers are treating their increasing workforce. ofthe American However,proportion Such contractors genuine independent asmall form their prices. or unilaterally set, will negotiate, whether they determine They work. when,where to andhowthey determine freedom have They contractors. independent are true These glitches. their tosoftware trouble-shoot businesses computer several with onretainer technician toiletinthe bathroom corporate orto a leaky a into fix called plumber toCompare the local Max continually undercut on labor costs. continually costs. undercut onlabor to if staysame work inbusiness wouldstruggle A competitor that to reliesdothe onemployees many 150drivers. to totalas workforce, believed employer contracted paysfor zero its payroll taxes t or Misclassifica 6 7 Max’s mid-size tion

9 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports

15 Total tax loss in California due Total 10 Max nets $24-$40 for roughly 11 13 al 16 A recent government estimate put the loss put the from just estimate government A recent 8 12 t ting and the Environmen

14 Adjacent Communities - t Similarly, as much as 20 percent of workers’ compensation premiums in New York – $500 in New premiums York compensation asas of workers’ 20 percent much Similarly, 9 million to $1 billion – go unpaid each – go unpaid $1 billion year misclassification.million to to due each container he hauls. After his typical 10-12 hours a day, five-day workweek, five-day he hauls.each container After his typical Max generally 10-12 hours a day, takes number fluctuates. home taken that in $550, although home $700. “But I’ve One week he brought it depends Often what loads assigns on ishis how many dispatcher him. only $56, it all depends.” Each week, divide between he must income this his his providing family for truck. to and tending He is consistent a number that and repair him $5,000 a year, cost maintenance routine that estimates with academic studies. to misclassificationto has been to estimated be as high as $7 billion. The average rig at port terminals burns diesel and is 10-15 years old, earning America’s at average portsrig portThe terminalsthe burns dieseland is 10-15 years old, earning America’s old trucks where place asreputation die.” go to “the unpaid Socialunpaid taxes misclassification Insurance due to $15 at Medicare, Security, and Unemployment billion. Crisis in Por When Max entered the profession in 1992, he scrimpedWhen Max profession the entered a few purchase dollars save thousand to to fellow a port he to sold it driverto buy was that Three built in 1978. years later, Freightliner a Wide was seven another model for that already that 11 years years. drove an International old, and then time a 1994 this in 2002, vehicle money applied buy his insurance He third to from an accident he used rigthat 2008. until Freightliner began company deducting $404 weeklyIn 2009, Max’s payments a truck for they lease require him to maintenance. and he isfrom required also them, of vehicle cost the handle contractually to While the medianWhile the value of goods is $70,000, container in a cargo Independent Contrac as they also are portIn the drivers, independent trucking contractor industry, or “owner-operators” known, bear put those costs costs estimate One the of truck ownership, operation, and maintenance. of drivers’ gross 60 percent at incomes. Such facts have left state Attorneys General, the Department of Labor, the Internal Revenue Internal facts Service, the Such General, left Attorneys Department have state the of Labor, and Members of Congress broad consequences address the ways of independent to searching for misclassification.contractor In port trucking,local, more are there though, specific consequences these misclassification. of to nature local consequences The organizations the has drawn like Association of Long Beach, for Center and the Resources Defense Teachers’ Council, the Natural policy into Health Environmental as status discussions contractor.” an “independent about Max’s Misclassification also a host denies of important workers benefitsprotections. and Maxis ineligible a job insurance, compensation workers’ he loses if insurance unemployment hisfor job. Without injury medical him with huge leave could earn bills to way and no a living. lacks He a guaranteed wage,employee minimum health care, benefits. and other taxes, income Unpaid premiums taxes, payroll compensation and workers’ insurance, unemployment by estimated gap,tax currently nation’s misclassification the mean to contributes significantly that Inspector Treasury the General $345 billion. at With such low take-home pay, drivers naturally buy older trucks that are the least buy older trucks the drivers are naturally expensive. that low take-home pay, such With

10 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports port trucking onthe whole.” trucking port in butrampant misclassification companies, bya few not misbehavior is the culprit strongly suspect afford.economic in place can Direto thefirst –we theenvironmentalconditions led crisis earners that’sbecause fill corridors rigs low-wage transportation all these U.S. old,diesel-spewing aresult, as forces andmaintenance theoperation cost oftruck ontoindustry the workers and the behind wheel, the “Coast to coast, the problem this way: analyzes Pope, Club, oftheCarl Sierra the Chairman employment must drivers’ status. address policies community andwhetherthose impacts dramaticallygroups differ onhow the toaddress theindustry’s problem. and environmental These the forResponsible Coalition Transportation organization, own up its approach, tofor advocate its to when Ihave to cost over$3,000.Idon’t replace the itwill tires what’s know goingto happen.” far, oilandthe filtersSo andstuff. special need all these is I’ve done pay but foroil changes trucks; EPA-compliant new away these already. aren’t mebecause trucks Anditworries like any other don’t“I really howI’m know of payment most takes my check goingto continue Thelease doingit. premature death. morbidityand cancer, to rates increased leading are high, disproportionately illnesses andrespiratory asthma, diesel-soot-induced areas, Inthese that standards. airquality regions violatefederal in port EPA The estimates nowliveandwork thatsome 87millionAmericans observers. all other industry as amajor source pollution, ofdiesel as trucking port then thatIt recognized the unsurprising U.S. is has Environmental Agency Protection Truck 1978 Freightliner 1984 International 1994 Freightliner Air QualityNonattainmentAreas andU.SP 19 W here OldTrucks GotoDie:Max’sHistoryofTruck Ownership 20 Y 1992 1995 2002 ear Purchased 17 as have as the Natural Council Defense Resources Age atPurchase 14 years 11 years 8 years orts Y 1995 2002 2008 ear Disposed There is now a broad shipping industry has set set has shipping industry The solutions. seeking up around the country have groups sprung labor and publichealth, faith, environmental, community, of Coalitions programs. emissions reduction have also established diesel nine of the top 10 ports emissions problems, and grants directed towards the dispersed $40 million in addressed. TheEPA has problem that must be trucking are a serious emissions from port consensus that diesel Age atDisposal 17 years 18 years 14 years 18 and virtually andvirtually

11 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports ors? t 21 trac ers True Independent Con t Truck Driv t Script Pos When we talked withMax Galvan, of two revealed father the evident he performs pride work in the American kept the persistently his Dream throughout out of reach have that conditions despite the truck hismen and women who rise company’s other at spoke of the gather He fondly early to career. asyard them and referred as to his co-workers, than competitors. rather believes He majority of the alsothem clock 50-60 hours a week and knows several facing who are eviction and bankruptcy. worst economic fears proved before report this production, immediately days In the Max’s into went true. After nearly two decades job, on the Max recognized he was work” and handed to “paying over keysthe truck of the he had been after leasing pouring his company through $35,148 in weekly lease 2009. His new April payments full-time alone since job will be looking opportunity another for that it be same industry? the in will Will keep a roof over his head and food family. the for table on the believesHe his story telling will blackballing, result in near-certain him out of port forcing trucking stopped time he the has He working, no retirement. At a truck driver. he said simply: “I’m altogether. But I A goodgive up. This iskilling me.” one. This is all I know. Are Por families, legitimate business operations, a heavyWorking public pay and the price for The linkmisclassification industry. between in any port the and employment status drivers’ impactsindustry’s reasons question environmental the the underscores we started examine to with: MaxAre port other and truck drivers true independent contractors? use a three-pronged research method develop factual to the data necessaryWe address that to the in bodyquestion.report,this Specifically, of review (a) we describing substantialthe literature industry’sthe structure and economics; (b) aggregate and analyze surveys 10 at of 2,183 workers seven ports; major analyze arrangements work of a diverse group of drivers firms and (c) and the based on original, interviews in-depth they for, work documents and voluminous employment collected as such from them contracts, leases and policy manuals. review The literature is presented firstdevelopment, as it scope,describes the port trucking system’s and operating models. Next, our re-analysis we present and aggregation survey of existing data and drivers’ wages,analysts’ into insight their studies for expenses, patterns. and work The legalreport.comprises analysisfollowsthe and it the bulk of immediately It is principally based originalon the in-depth interviews data through we gathered with drivers and a careful examination contracts,of the leases, documents and other formally work. structure their that reportThe concludes by discussingcorrect to recommendations the misclassification that pervades industry. the Curtis Whalen, an executive of the American Trucking Associations, the nation’s largest trucking Associations, American of the Curtis executive an Whalen, nation’s Trucking the impacts industry’s the environmental argues can instead be that addressed maintaining while lobby, system: “Requiring independentthe contractor be truckers to employees do with has to nothing has been health and community added, environmental the he later “I think “Unfortunately,” cleanair.” hoodwinked on this.”

12 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports port trucking system prompted multiple economic and operational analyses of the industry.prompted system multiple analyses and operational trucking economic port at thatstarting time,concerns the about environmental, andcommunity ofthe operational, impacts However, market. labor specific orits trucking little to on port 2004,therePrior research was port drivers, requires a wealth of empirical data that has only recently become available. ports has since risen more than five-fold. Tracing those contours, and especially their consequences for since the upheavals of the early 1980s even as the volume of containerized cargo moving through our The contours of theport trucking industry, or “drayage”as it is known to insiders, have remained stable Sources employment to ofdrivers’ statusbackground the that analysis then follows. are the necessary details These and work routines. wages for ofthe drivers’ some consequences and ofthe contracting industry, it, the ofindependent within current dynamics the scope review In particular, drivers. truck we ofthis transformation the for results port wesurvey In this section, companies seized. andtrucking which cargo shippers anopportunity liability to byshifting drivers, tocosts cut anopportunity provided deregulation Nonetheless, consequences. long-term transformation orits foresawof deregulation this industry formally, which, unclear ifany, Anditis this result. didnotrequire deregulation ofthe proponents contractors. as independent At least classified became drivers truck ofport majority overwhelming to dominate came model the business industry.Within Under anew that the model, years, afew and wages. Established companies faltered. Unions disappeared. competition. New companies, mostly small and without assets, entered the industry, driving down rates Carrier Act in 1980. The Act abolished the old regulatory system to eliminate barriers to new coalition supported by industry and consumer advocates followed suit, passing the Federal Motor In response, the Carter Administration began to deregulate the industry. A bipartisan Congressional high. too felt the was priceofthis structure Butmany, workers. comparable ofindustrial to cargo shipping those interests, including powerful benefits and marketwages power,withsubstantial drivers whileproviding profits reasonable earning oversaw freight rates androuting industry. for companies the enjoyed trucking Unionized profoundly. changed industry agency ago, a the trucking federal years In latethe Thirty 1970s, Deregula The EconomicsofP Sweatshops onW accounted for 61percent of the country’s container trafficin2009. in listed ports. working seven 2,183 drivers at surveys, Table 1, These reached Together, ports those workingconditions. drivers’ of port particular, drawn together. been have never Theirpresentation hereis the first nationwide overview in Thesurveys, within it. and the place of drivers of the industry sourcesthe workings detail These drivers. ofport are tenthese large surveys tion andheRisofIndpnConrac heels: ort Trucking 22 23 ting 25 24 Among

13 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports 78 175 209 197 147 202 598 105 238 299 Number Surveyed ort orts edro Bay Bay edro ort of ort Drayage ort Truckers in Seattle ort Truckers ngeles and Angeles and orts of Los 12.4% $28,783 $35,000 $33,081 $38,000 59.0 55.7 11.7 $11.91 $14.71 25.1% 65.0% 7.3% 20.8% 17.8% 82.2% 69.8% rayage Activity Drayage ort, Rail, and Border acksonville P at Jacksonville Survey ort Truckers P Jersey at New Survey ort Truckers of these surveys. discuss detailed the We 27 rivers & Public Health, Drivers ort of Oakland Endangers uthority orts etrofitting in P Retrofitting Incentivizing Truck A Study of P Big Rig, Short Haul: at Contracting Independent Road: How the Low Taking the P Economic Growth Impacts of P The in Texas at the P Operations of Drayage Characteristics Houston Management Program: Truck Comprehensive Economic Impact Analysis Report on P Report on P rayage at the P Drayage A Study of Long Beach. Serving theSan P Drivers of Drayage A Survey P A tudy Title Study

28 26 uthors’ aggregate analysis of 2,183 surveys listed in Table 1. listed in Table analysis of 2,183 surveys aggregate uthors’ 2008 2007 2007 2007 2008 2009 2009 2009 Date of Study 2004 2007 ource ata D ource S Surveys 1: Driver Table Contractors Employees Contractors Employees irect Contractors Direct Sub-haulers ource: A Source: Median Mean Median Mean Mean Contractors Employees Contractors Employees Contractors Employees Independent Contractors Employees ages per hour (means) Annual income, net of truck expenses (all drivers) per week Hours (all drivers) per day Hours W health insurance Have plan retirement Have rivers classified as classified Drivers urvey Results Survey 2: Summary of Aggregated Table ort Seattle Houston Houston Oakland Jacksonville NY/NJ LA/Long Beach Oakland P LA/Long Beach LA/Long Beach ort Jobs Jaffee & Rowley Bensman & Bromberg Harrison, et al. Harrison, et al. & Haveman Monaco Monaco P Greenwich Author(s) Grobar Monaco & CGR Management results surveys of the below. Table 2 presents a summary aggregated of the results Table

14 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports of the work totalmarket Around each. for 2,000drivers ofthem. each comparisons but giants inthis industry. butgiants comparisons above $150million,stillsmallbygeneralrevenues corporate withThere are 75drayage firms roughly revenue.less with than$10millioninannual are small, firms trucking great of majority these The inandaround major andrailyards seaports. warehouses terminals, the marine between distances over short principally move containers, these firms 5,000trucking An estimated through ournation’smoved ports. containers 20millionofthese In2009,almost overseas. samecontainers inthose andshipped packed are andsemiconductors, machine tools, equipment, like farm exports, Our in cargo containers. made abroad come to allof this country the goods almost Nikes, microwaves, pens, Stuffed animals, link. asmall,butessential is trucking ofwhich port system goods-movement thegenerated within global ofthe fiercelyare that aproduct are dynamics dynamics shape the industry.competitive Those andwork hours, wages including their status, ofdrayageThe employmentdrivers, arrangements “Ferocious Competition”:Por admit that they have “begged for years for rates.” for higher years admit that have they “begged Evenflat have the drayage stretchingrates early largest seen firms back 1990sand the they toleast at Security Administration estimates that work firms. for 110,000drivers these Security imposing greater service requirements on port trucking firms. trucking onport requirements greater service imposing companies like Wal-Mart, Target, bottomprices, demandrock andHome Depot cargosize. actMajor their shipping behemothscustomerstrue and they main are firms’ The trucking beneficial cargo owners;” as a consequence, they are to price condemned competition.”as a they “ferocious consequence, cargo owners;” beneficial the and shipping lines companies leave them vis-à-vis “littleof trucking with power bargaining The Top 25U.SContainerP Bureau ofTransportation Statistics,America’s Container P 29 t TruckingandheGoodsMovement S 32 The two largest port trucking firms have about 2.5 percent about 2.5 firms have trucking port largest Thetwo orts forInternationalMaritimeCargo:2008 37 35 orts 2009,pg12figure 8. The small size and large and Thesmallsize numbers 33

31 30 The Transportation 34 whilecontinually ys tem 36

15 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports

38 39 41 And, as leading a Southern 40 Roadlink, firm,recently national a large 46 noting that “at best,” the pay rate for for rate pay the best,” “at noting that 47 Commenting on changes in the industry, a industry, on changes in the Commenting 44 ages Only a small share, 17.4 percent,themselves identifiedOnly a small share, as 42 Wages fell 15-20 percent in the four years after the Motor Carrier years four after Motor in the the 15-20 percent fell Wages ty Level W 43 t Trucking ominant Model ting is the D 45 er t Drivers Make Pov employees. The overwhelming on independentcontracting the principle reliance as method of organizing work stands out as industry’s features, the one of most salient setting it apart from almost every other economy. sector U.S. of the California company ownerCalifornia notes, company industry the has shifted most for operational liability costs – truck purchases, taxes, fuel, drivers. insurance, the – from themselves to maintenance With little in the way of fixed way the in little assets,but declare anything to do bankruptcy incentive is little there With of lack improve, conditions when of diesel price rises. slows or the when shipping Conversely, business contacts only barrier is industry. the the entering to principle strive reduce their companies drayage to expense – labor costs context, In this – however theyreducing strategyfor core can. those Their costslabor is independentcontracting. As shown in Table 2, the median 2, the among surveyed net income driversAs was shown in Table $28,783 per year independent and $35,000 per independentfor year employees. contractors for Comparatively, less employee drivers. than drivers 18 percent netted on average contractor is net dividedWhen annual income by drivers’ hours, work wages resulting hourly the also are low:quite drivers, contract $11.91 for employees $14.71 for all port and $12.10 for drivers. While these figuresrepresent net earnings afterexpenses, truck they include do not tax burdens, a fact widens between gap the that independents and employees. the pay must Independent contractors portion of Socialemployer’s Medicare Security, and similar taxes as as own. well their executives give similar wage company estimates. of The president Southern Counties Trucking Express, Ports of Los the Angeles and Long at operator a major Beach, drivers noted in 2006 that earned $11.34 perof $29,928. income hour and an annual Por As port the trucking industry model adopted after independent deregulation, the contractor drivers’ wages precipitously. fell Today, the overwhelming the majority of port truck drivers treated as are independent contractors. 82.2 Today, of surveypercent driversthemselves identified self- 69.8 as independentcontractors with percent identifying self-identifying as and 12.4 percent direct contractors as sub-haulers, who drive trucks owned or leased contractor. by another Contrac Independent ment in Por of Employ The port trucking following firmstriumphed that hired They common deregulationfeature: had one drivers and requiredtheir own as trucks. to their and operate them contractors This business model companies The hourly. than paid load, rather by the workforce provides with a contingent companies taxes. insurance or unemployment compensation no responsibility They workers’ have for obtain drivers’ services plans. without health paying careor retirement for One result of this intense competition is that trucking competition frequentlyis business. out of go companies that intense resultOne this of Act passed,Act 1995. from 1980 to by 30 percent and Jacksonville port driver researchers: used told be “Containers to best one of the work, ways to but worst.” now it is the put annual net income across industry netput annual the income $24,550 at independent contractors at the ports “is 33 percent below standard” for comparable warehouse ports the at comparable belowindependent for standard” 33 percent contractors “is

16 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports with children.with married is driver the average port because measure offour for –animportant afamily guidelines percentbelowpoverty 133 income of falls The nationalfor the median federal contract drivers afamily, are to inadequate raise Such earnings workers alonemovethese into let the middleclass. drivers. truck 65percent just ofthe national earn average drivers for port 20 percent than Independent that. less $30,000 ofthat.” may $90,000to $100,000,“they’d whiledrivers gross $25,000to to homeabout take lucky because be and two children would all be eligible for eligible and twochildrenMedicaid. wouldallbe doing the samework. contractorsindependent have insurance rates that are lower drivers significantly than employee arePort much drivers likely truck less to have insurance health workers than other while American Few DrivrsHav e Heal need. family do notadequately measure inthe 1960sand developed onguidelines are above based noted guidelines that poverty the federal dueto other the against income belief benchmarks results their survey evaluated researchers Several nationally $18.14anhour. drivers is truck heavy-duty wage makefor up the force,the are bulk ofthe across industry. held labor down Themedian wages who independents, with to replace employees easy itis Because drivers. operators butfor allport forFurthermore, lownotjust the owner- wages contracting the that independent model keeps andwehelp them buildtheir smallbusinesses.” earnings, middle-class produces We whomovethe cargo ofourcustomers. owners work that for full-time create opportunities promotes the industry, inMay gave Congress before 2010:“We business the independent support that anassociation Angelesandheads inLos company trucking based aport whoruns Johring, instark stand contrast to executives testimony trucking thatport from admissions Fred These jobs. and retail • • • • family ofthree. family threshold”poverty as for the the state, “true or$32,484 defines for a Jersey of New Services for contract 14percent there what drivers below falls the PovertyInstitute Research ofLegal annual income andthe $28,000median Jersey,In New twodependents, the average has driver wage. than barely the $7.64,just less above state’s earn hourminimum $7.50per surveyed the drivers inthe BayArea.” level offourthe above poverty afamily ($12.02) to support of One-quarter “earned drivers than the less amount port needed wages 60percent oftheIn Oakland, surveyed County’s for allworkers. wage median fell year 23percent income King of$28,500per below In Seattle,contract median drivers’ two children.” and for oftwoadults ahousehold the wage below $27.44hourly living but“fallsfar household, threshold $13.10hourly rate drivers’ forIn Jacksonville, atwo-adult the clears poverty 58 52 48 Under the Patient an andAffordableCare Protection average driver, Act, spouse, his 49 And, in 2005, a Seattle trucking executive explained that he had trouble recruiting executive that explained And,in2005,aSeattletrucking hehadtrouble recruiting 56 55

th Insurance 54 The researchers The found researchers that: 57 53 51 The average employee port truck driver earns earns driver truck port The average employee 50

17 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports 68 ture Review 62 In contrast, of 65 percent 59 that trucking company trucking company that ry Litera try 64

66 60 65 try and 60-70 hour weeks 63 61 ted Driver Survey and Indus Drivers’ frustration with has arrangement this protests sparked and work numerous 67 the Indus ong Hours Are Routine in executives have estimated that drivers work. estimated that executives have the periodsfully illustrate drivers work Theseaverages do not, of intense One can Losface. however, busy you willAngeles driver be explained:“When working 14-16 hours per with double log day it’s books can you enough make money so that your truck. for No one works only 40 hours per week. sleeping a mule, working like your truck.” in You’re Because independent drivers load, paid by the trucking are absorb companies no costs when drivers wait. do terminal operators, Neither rail yards or warehouse companies. Drivers wait everyone for they bear inefficiency system.else in the Effectively, costs the adjacent participants for all the in supply chain. employee drivers reported being insured. Both of working age the 80 figures well percent are below adults coverage. population general in the who have Major Findings: Integra emerging our analysisThe picture from of driver surveys done by priorresearchers and industry competition, ever-increasing service Fierce requirements,reports is economy. of an underground poverty workforce, level wages,a contingent safety violations, rampant health no care coverage, ineffective or illusorythese the – rules are the industry. of enforcement Drivers accustomed these particularly are to hours but remain frustrated substantial by the amounts part are “waiting waitingof unpaid of it. that, time that on average, time and Grobar found Monaco between for total trip of the accounted time.” and 66 percent 50 L surveyed 2 shows that port drivershours. long truck work worked an driversPort routinely Table of 59 hours a week.average Theseresults actually are Drivers also averaged 11.7 hours per day. 14-hour days average the lower than slightly Researchers studying drivers at the Ports of New York and New Jersey found the result “a frightening and New Jersey result “a the found Researchers Ports New of studying the drivers at York provide of unmet to one-third need. of all driverspicture able … were without health insurance Fully families. their for all no health care at When surveyed families their about where received care, they they theythat didn’t saying were choosing By this answer, medical afford care.’ answered: ‘I can’t get ear health children bring facility families infections, all. When their their any at to they don’t or get conditions examined asthmatic get for antibiotics. breathing, they trouble If they have don’t pneumonia.they If get tetanus vaccinations.” get cut while playing, they don’t The comparative dearth of coverage for independent contractors exacerbates the the risksexacerbates driversdearth for independent contractors coverage comparative of The normalface from the occupational hazards work. of their Resources Natural CouncilDefense The heavily all drivers are impacted and longshoremen by the has, “although that found instance, for negative health impacts of diesel pollution, independent port drivers especially are susceptible when withcompared employee workers.” As shown in Table 2, only 25 percent of independentdrivers 25 percent 2, only reported health care having coverage, As shown Table in be self-purchase, it through spousal employment, assistance. public or stoppages, incidents notable including in Savannah, Los Angeles, Long Beach, Miami, and Oakland.

18 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports Our review of the industry literature and 10 surveys of 2,183 drivers in seven major ports show that: major ports inseven of2,183drivers literature and10surveys ofthe industry review Our • • • • • • they were offered one.“T Bensman andBromberg reported that12percent ofdrivers hadtaken anunsafe chassisontheroad thelasttime drivers.” chassis intheprevious month,and wheels thatholdcargo containers. MonacoandGrobar found thathalfofalldrivers had beenoffered anunsafe The rushtodeliver loadsalsoputs pressure ondrivers tohaulcargo onunsafe chassis,theseparate frame and for 11hours. in any seven-day periodandrequire atleast 10hours rest afteradriver hasbeenonduty for 14hours ordriven The driver surveys alsofound widespread evasion ofsafety rules.Federal regulations limitdrivers to60hours California Highway P dangerous andirresponsible …ButIdon’thave money for new tires. I’mbehindonmy bills.Aslongasthe pointed outapotentiallydeadlybulgeinclient’srubbertire, thedriver shruggedandtoldthereporter, “it’s trucks ontheroad. W drivers anddiscountmechanics,bodyworkers, welders andjunkyards –legalandotherwise”whokeep port In aninvestigative report onindustrysafety, theLosAngelesTimes detailed“ashadowy economy ofrisk-taking Economic Pressures Encourage W per day. year.” report working 72ormore hours inatypicalweek andthathours ofservice typical days aslong16hours. trucking companies to misclassify their workers. companies to misclassify trucking incentives for port create powerful dynamics Industry their services. andincrease their prices are under firms intense and These constant pressure tolower assets. few companies possessing is fiercely estimated 5,000small competitive. an It industry comprises trucking port The routinely ignored. onworkinghoursandvehicle are limits weight limits Safety equipment. andillegal dangerous commonly Drivers use ofsafetyregulations. evasion Economic encourage pressures widespread benefits. to likely have drivers less employee to times insurance three health have andalmost retirement contractors likely Independent less were than two-and-a-half times the across surveys. drivers average incomes 18percent net contractors lowerthan employee Independent reported for for contractors employees. year year $28,783 per and$35,000per was income, andother taxes, Average FICA, before 59hours. earnings was net drivers surveyed The amongst average work week wages. workPort longhoursfor drivers poverty-level truck maintenance, andrepair. insurance, for alltruck-related taxes, responsible fuel, including andliabilities purchase, costs make drivers firms through which means contracting trucking theIndependent is principle contractors. ofindependent proportion industry. trucking Few rely this near for onanywhere other the industries standards port labor which the contracting sets model dominant independent as business identify analysts Industry contractors. independent as drivers truck port 82percent label Companies ofthe surveyed 74 72 71 InOakland,22percent ofdrivers reported working thirteenormore hours perday. Somereported InNew Y 70 MonacoandGrobar’s survey ofSouthernCalifornia drivers found that10percent ofdrivers ork andNew Jersey, 14percent ofdrivers reported working onaverage more than14hours atrol doesn’tstopme,I’llkeep doingit.” hen allantero, theSpanishnamefor thosewhoregroove worn tires withahotknife, his would meanthat10,000unsafe chassisleave theportmakingfreight deliveries every 73 that 22percent reported thatthey had“taken thechassisonroad.” Similarly, idespread Evasion ofSafetyRegulations 69 regulations are “typicallyviolated by

19 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports Of the three Of the 75 tus a 76 ndependent Contractors Contractors Independent rivers D Truck ort The “Suffer or Permit to Work” Test:Fair Act,LaborAct, The Standards the the EqualPay Work” Permit to The “Suffer or and Medical Family Protection Act, Federal and the Migrant and Seasonal Agricultural Worker or permits”for it. to work “suffers whom an employer workers cover Leave Act tests, the “suffer or permit”tests,test has Under employee. the broadest definition of an is it, a worker “suffer the businessan employee if the has be allowed to work performed the in its business its for benefit, even party another though has hired,paid, or supervised worker. the Test:“ABC”test This is used unemployment mostto determinecoverage under state The establishes of employee statutes. a presumption compensation It and some workers’ insurance unless hasstatus it can worker been, be (a) the be, to shown free that and will from continue performance over the work;employer of the by the (b) service the control performed by the is outsideworker usual the of services course the performed employer; putative by the and (c) is engagedworker in an independently established trade, occupation, or business. profession, Test:test This determines such the employee under as status laws The “Right to Control” Act, Tax Unemployment Act, Contributions Revenue Insurance Internal Federal Code, Federal Labor Security National Act, Income the Americans Relations Act, and the Retirement Employee with Disabilities Act. testthisused The version of currently the IRS by on draws factsthree in form enough an employer/ to worker areas the determine business to whether the controls Thosethree areasemployeecontrols, relationship. are financial controls,behavioral the and type between of relationship business the worker. and the • • • ment St Determining Employ The Legal Framework for The classifyingrulesfor or an employeelaid out in state are a worker as an independentcontractor Labor Revenue as such Internal and federal Code, the statutes Fair Standards the Act, and state laws. is compensation some variety While there unemployment among these statutes, they apply status. employment Those three teststests to determineessentially a worker’s one of three different are: The dynamicsthe of port misclassification truckingwhich in industry can flourishcontext a create – a suggestion industry observers competition, ever-increasing service noted before. Fierce have povertyrequirements, workforce, level wages, a contingent rampant lack of health care coverage, safety violations,appear all industries in other and ineffective misclassification in which enforcement is rampant. But, suggestive, while driver the surveys, industry reports, formed that the sources and other empirical basis preceding of the industry overview kind do not provide of detailed the facts about of particular interaction the is drivers necessary truckingand their that companies a legal make to status. employment their of determination Becauseconsisted that, of This we undertook principally original the research presented below. detailed interviews analysisof the of lengthy, conducted with major five 58 drivers at ports documents and hundreds of employment nationwide we collected from these drivers, their including agreements,independent contractor truck leases, stubs, pay provisions, insurance policies, safety drug policies, and alcohol meeting agendas, log books, analyzed data this and job applications. We Revenue set status Internal Service. by the test out of employment the to according Are P Are Analysis The Employees? isclassified or M

20 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports narrative responses addressing the critical dimensions of a classification analysis. dimensionsofaclassification the addressing critical narrative responses to dense, elicit were designed Thequestions respondent. ofeach asked questions largely open-ended of protocol series that ofa semi-structured consisted a were following conducted The interviews companies. that workingrelationships drivers’ their structure with androutine paperwork policies, contracts, We their from companies. received this way, ofdocuments gathered hundreds including many ofthe had they allthe with documents to us provide drivers Wetwo hourseach. the interviewed asked also experts, the final protocol had 67 primary and 82 follow-up questions. and82 follow-up the finalprotocol had67primary experts, legal andconsultations outside pre-testing with drafts, several After interpreting that test. decisions and court andinagency test, in IRS identified the areas onkey focused questionnaire interview Our employee status, and (b) a comprehensive review of the drivers’ employment documents. these drivers, drawing on (a) exhaustive interviews resulting in 33 measures of work arrangements and in small, medium, and large companies. The goal of the legal analysis was toassess the likely status of arrangements of a group of drivers who represent typical, modal work arrangements in major U.S. ports We therefore developed a research methodology consisting of in-depth legal analysis of the work such determinations are fact-intensive. ofattorneys, Inthe language abusiness. with ofaworker’sfacets all virtually of ofemployment analysis test status relationshipIRS requires The Research Methodology status reflect in part the inherent indeterminacy that suchfactors introduce into legal proceedings. make about the likelihood of drivers being found to be misclassified under legal tests of employment factors. Ideally, such factors would not enter into final decisions. But they often do.Qualifications we evidence, which factor of a multiple-pronged test a judge assigns the most weight, and multiple other quality of legal representation, the performance of witnesses, biases of the fact-finder, the availability of reproduce in this research setting. Specifically, in a legal setting, determinationscan be swayed by the mirrors are subject to several variables that we account for in our final determination butcannot Lastly, it is important to note that judicial or agency legal determinations of the type this analysis We status. a worker employee whendetermining follow that approach here. and examine the abusiness andagencies totalityofthe relationship courts Instead, between decisive. have andagencies held is that to courts fact theRight In applying Control nosingle IRS’ test, tests. Permit orABC underthe statutes employees that the be broaderSuffer use wouldalso or they under this test, law. status definitionofemployee inAmerican the are itis strictest employees drivers port If because We bythe IRS. follows the to Right Control analysis articulated Our as test follow this measure protocol for interviews of this nature, drivers were guaranteed anonymity. of this nature, were guaranteed drivers protocol for interviews Following inthe human standard notes. subjects confusion some there was incase responses to enable the were authors taped interview to recheck the interviews Except declined, whenadriver were completed byMay. inMarch 2010and began Interviews eachsure ofthe locale. three to firms at largest include at least making wanted forwhichlocale todraw we each at interviews, each category in firms we identified large and thathavecompanies, small,medium, suggested employment may practices between differ researchers prior Because page. and contributions ofthe inthe are teams acknowledgments noted York andNew Beach, Long Angeles, Jersey. Los andNew ofSeattle,Oakland, Ports The composition the from drivers to teams survey interview andtrained of2010,weassembled inFebruary Starting 77 The interviews lasted up to lasted Theinterviews 78

21 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports whether the the whether

100% 90% 80% 70% 60% 50% 40% 30% 20% Percentage of Drivers Reporting of Drivers Percentage 10% Source: Authors’ analysis of 2010 port Authors’ Source: truck driver interviews T 1: Types of oversight drivers reported in interviews reported drivers of oversight T 1: Types 0% CHAR Drug tests Drug Medical tests Medical records attendance logbooks Regular meeting Regular Truck inspection Truck ts Monitored driving Monitored Truck maintenance Truck Worktime and delivery and Worktime “Behavioral Control”: The First Dimension of the IRS Test of Employment Status First“Behavioral The Dimension of the IRS Control”: at looks control,” “behavioral status, employment of test IRS the of dimension first The Research Resul business has the right to control aspects of the worker’s job. The more a business has the right to right the has business a more The job. worker’s the of aspects control to right the has business how at looks examination This employee. an is worker a that is it likely more the control, exercise a establishes training; provides work; the about instructions gives business the ways what in and much and use; to tools what determines work; to when workers the tells workers; disciplines sequence; work below. areas these of each in findings our detail We performed. personally be work the that requires Behavioral Control – Company instructs driver about work drivers: Most of the we interviewed kindsthey of instructions a numberreferredreceived of different that to the trucking from companies, circumstances. in a number of different In the end, we completed 58 interviews. discardedcompleted we end, In the interviews four because We they incomplete were results. compromised the group in a or done setting that interviews, completed the Of were 24 and conducted 10 in Oakland, in Seattle, 10 in Los and Long Angeles Beach and 10 in New York Fifty-three 54 driversNew called of the were trucking the by Jersey. firms. independent contractors One was treated as employee. an Forty-two owned trucks their and leased a trucking back to them lease-to-own had entered Five agreements trucking with the companies. hauled One company. loads haul that independent contractors Two known an arrangement as “sub-hauling.” driver, another for Ports of Los the Angeles and Longat Beach trucks drove owned companies. by their interviewsthe After completing and document collection, interview we put the responses and documents a database, into summarizing drivers’ the answers our questions to under headings corresponding IRS the to legal test. So constructed, database the allowed assess us to companies’ the IRS the threeof dimensions drivers with the along their test, analyzedwe relationship which using 17 Tables 5, 8, and 11. gleanedindicators IRS from the rule. listed These are in indicators

22 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports company was 16 pages long. company 16pages was the to application work the wishing forwith form drivers andalcohol policy. drug Atan 11-page another company, Attached to itwas for trucks. checklists schedule service with 4different safetymaintenance policy ofafleet pages and6 safetyprocedures ofoperational 3pages included manual procedures One17-page manuals. performance detailed drivers At twocompanies hadgiven least should howtruckers dotheir about work. ofinstructions sets detailed include These that to us. workers agendas provided the to is twomeeting their drivers instruction Anindication ofthe extent exams. to undergo companies provide some medical to which at least required periodically. that ofthem hadbeen One-third indicated they are drug-tested All drivers oneto months. three place once took every that meetings these reporting most with meetings, toForty-one attend that are indicated required ofthe 54drivers they safetyorother periodic Y 4 -11months 1 –3months Unspecified Frequency ofInspections Drivers subjecttoregular truckinspections early TABLE 3:Company inspectionofdrivers’ trucks Source: Authors’ analysisof 2010porttruckdriverinterviews Agenda from RegularCompany MeetingW 47 of54 27 11 5 4 Excerpt from P ith Drivers Contractors andEmployees olicy ManualGiven to

23 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports ndicating Forms Indicating Forms Coversheet river Applicants Driver From Required You call-in in the morning and you and morning the in call-in You day. the throughout in check to have writefor dispatches down your You container the drop you After day. the to got place. each at You call-in you go – you day each terminals different they need you. where In addition, everyIn addition, Daily reports driver submits a variety included of reports employer. their to logbooks, delivery logs (usually returned daily), wait reports, time cards, cards transfer interchange and manifests. reports Periodic included truck repair reports and truck inspection reports. Twenty- seven drivers – about half of our interview they their required – indicated are that have sample to truck inspected every frequently. or more 90 days Behavioral Control – Company trains workers: he wasNo driver indicated that jobon the put without received having initial from training the this One driver explained that trucking company. training included details as such negotiate how to terminals,the get a load, speak phone, fill on the out paperwork, and use chassis.the level Though of detail training varied, and 18 drivers indicated they Three orientation. had an that driversthat said they received on-the-job form of a training in the One ride-along company. driver the with another for his lasted training course driver said that a full week. of training,One driverone month said he had had working with a friend. Behavioral Control – Company sets work sequence: All drivers they indicated are that For in some manner. company dispatched by the some of these, a daily in-person with the check-in is requiredtrucking before work. company For others, a schedule is given before work. night out the phone is by radio or cell still others, a check-in For performed. means, Whatever the all drivers do their same sequence, the in roughly establishedwork not by themselves, trucking the but by companies. Each own They yard, dispatch. awaiting company’s they their a terminal or rail yard, or at line up at day, first load, up their drive itsto pick checkterminalit the destination, rail or in, drive to yard, back when and the workers tell companies load. The check in again, next wait up the in line, and pick call-in in take it. up a load to pick and where to One driverwhere “You described way, this his work write down the for dispatches your You day. the check in throughout to morningthe and you have terminals – each day different go to each you call-in You place. at container, After the you drop day. theyyou go where need you.” Behavioral Control – Company determines and wherewhen the work is done:their Through system, truckingdispatch dole out loads companies drivers.to Loads given are out one-by-one with the pick driver to the where telling dispatcher company take it.up a load to and where number While the are of loads time each takes and the complete to variable because the at in traffic or of conditions over what terminals, no control to little drivers have loads they get or when they get Drivers them. report being disciplined or evenrefusing firedfor loads.

24 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports although the surveys suggest a small number of asmallnumber suggest although the surveys who hadmore to than driver let, one truck single Wewho hadanemployee. a didnot interview We driver asingle otherwise. did notinterview is the reality qualifications, these met employees guarantee that its can and oftrucks afleet owns who contractingcompanies could aLessor with be the andwhiletheoretically hire employees, that indicated could the drivers we reviewed ofthe record. 20contracts Whilemost driving anappropriate with safetyand training andtests, insurance, having undergone the necessary the appropriate carrying individual, a qualified are by rendered drivers truck byport performed services or bythe nature business, ofthe trucking Bycontract personally: performed be to services requires –Company Control Behavioral regulations. to these ignore employment. acondition of as orservices equipment, products, orrent to purchase drivers anyrequiring Federal prohibit companies regulations from trucks. leased with corresponds this service Beach, InLong paychecks. drivers’ from deducted costs with for their drivers, roadservice provide Beach Long Angelesand Los andfivein Jersey and New the company.New in firms trucking Three York to pay workers’ compensation premiums through orare required cards, fuel receive roadservice, Asmallernumber andparking. radios, phones, the receivefrom companies includedrivers cell that andservices tools Commonly provided foritems aprice. are provided these Unlike for traditionalemployees, their jobs. for oftools the types companies to certain provide rely often on Drivers andequipment: supplies furnishes –Company Control Behavioral companybasis. office daily ona and have there. lockers Half the ofthem call at acompany checks use office, company parking, day. every office Many of thempick up their drivers goAbout halfof toa the company offices. time at companyregular dispatch significant, spend Many also drivers are goingto work. miss that inifthey are toindicated obligated call they control that the is fact 30drivers overworkload Further ofcompany indication ofthe degree 79 Standard industry practice appears practice appears Standardindustry CHAR TABLE 4:Drivers reporting equipmentorservices Insurance Radio P Fuel W Equipment orService Truck registration fees ($550/year) Repair fees (varies/repair) Truck-board computer($12/year) Administration fee ($10/week) Neon vest ($10) Company truckinspections($50) Company fuelcard ($3.50peruse) Diesel fuel(varies/gallon) Radio ($13/week) Oil change($375) Truck wash ($10/week) Truck parking($150/month) Insurance (15%ofgross/week) Sample ChargestoInterviewed Drivers Source: A arking check inwithyour company eachday? orkers’ compensation T 2:Interview Question: Are you required to 10 15 20 25 30 35 40 45 Source: A 0 5 that theircompany provided foracharge uthors’ analysisof2010porttruckdriver interviews uthors’ analysisof2010porttruck driver interviews No Yes Number ofdrivers 52 23 19 6 5

25 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports

81 although federal federal although 80 Coversheet for Job Application Coversheet Frequency Always Always Always Always Usually Sometimes Always Always uthors analysis of 2010 port truck driver interviews analysis of 2010 port truck driver uthors ource: A Source: nterviewed Drivers among Interviewed Relationship under IRS Test Employer ompany instructs driver about work instructs driver Company driver trains Company sequence sets work Company the determines when and where Company is done work furnishes supplies and equipment Company service to perform driver requires Company personally drivers evaluates Company drivers can fire Company ehavioral Control Factor Control Behavioral ehavioral Control Factors Indicating an Employee/ Factors Control Behavioral of BLE 5: Frequency TA Trucking companies exert Behavioral exert companies Control – Summary: Trucking activitiesa high work degree the over truck of the control of drivers. times truck drivers set at Port business work by the activities companies, of the under a sequence set by company dispatchers. Drivers’ behavior is monitored and evaluated. All drivers can be fired.the degree of One indication to which drivers their is shown in the trucking control companies detailed forms of two companies. application application The employeeforms drivers were for and independent contractors identical. by indicated facets behavioral control examination of this Two themselves. workers the Drivers’ contracts permit use the of some to degree, can control, workers In addition, the “helpers.” all but one that we found they worked. hours that However, the 16, indicated driver works full time, and a surprising number, they a daily schedule work with set hours. drivers haul loads drivers haul in trucks owned drivers.other by Thirteencontractsthe prohibited of assignment person. another personally to to Drivers them contract for believeof the contracts are the that perform. event,any In business larger has none of them organization offer any to beyond his personal labor. Behavioral Control – Company evaluation and dismissal of workers: Some drivers described a evaluated were performance-monitoring and many companies instructions their system through at and tests. 54 drivers of the Fifty-one believe they can that be time. drivers Examples any at fired gave as potential cause firing for includedrefusing receiving a load, in line, or cutting a traffic violation. of means further a as viewed be can which system, “escrow” an of use the reported drivers Some begin they when funds escrow deposit drivers their that require companies Some control. behavioral this of variation a In $2,500. to $600 from ranged amount the drivers interviewed our Among work. Drivers premiums. insurance of pre-payment (16-week) long require companies of handful a practice, leave drivers when payments escrow return not do companies some that reported regulations closely prescribe how companies may collect, account for, and return escrow funds. escrow return and for, account collect, may companies how prescribe closely regulations

26 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports make more money. could Most notanswer could what of the dotoeach drivers they Weexpand their routes orhours. asked also could conceive ofany way that could they drivers noneofthe interviewed When asked, ofloads. number particular to a the provide companies didnotundertake stating that were explicit this, about reviewed Two-thirdssystems. (14)ofthe we contracts through their dispatch gets driver each loads control also companies The trucking which don’t youintrouble…. That’s They theabout rate.jobs. give you Ifyouask, yourpunishment.” at theoptionof sole company. matter, apractical As said“You onedriver can’t the company ask their company hadunilaterally ratesthat indicated lowered andfive ratescontracts be lowered could that volunteered and 80percent drivers saidthat Three therefor ofrates. negotiation noroom is percentthat noted oftheday the drivers notice.companies control Eighty-six the are rates paid, they atrates changed any could timeonseven- be company may determine.” saidthat Asecond that solely onwhat the the “rates are based Onecontract stating madethis explicit, rates. companies load unilaterally these establish to terminal Trucking arailyard. a port containers from moved timethey $40 each receiving reported inourinterviews drivers a“piece rate.” called is For instance, several payment that structure inother industries bythea payCompanies load, drivers much work orhowmuch are they paid. they havedrivers little to nocontrol overhow matter, apractical As their work. truck port for profit entrepreneurial in opportunity have orloss:Port drivers profit no truck for –Opportunity Control Financial business.” separate a whetheraworker“truly has measures test of IRS the aspect This to multiple businesses. andwhetherthe workerservices provides expenses; whetherthe unreimbursed paid; workeris has investmenttheworker’s orherwork; financial inhis how theworker loss; for profit and opportunity ofaworker’s Facets job. aspects ofthis examination ofaworkers’economic include the degree control,”“financial dimensionof second this test, The athowlooks muchbusiness controls a the the IRSTs “Financial Control”:TheSecondDimensionof you jobs. That’s jobs. you your punishment.” “You don’tgive They can’t in you trouble…. the ask company ask, Ifyou about the rate. t ofEmployment St a tus preferred loads. preferred in for them exchange totakeenables bribes aresponsibility which getwhichdrivers loads, controlwhich Dispatchers delivered. be must muchhow orwhere the routepays load of thanto make because others moremoney allow drivers loads Some value todrivers. significantly vary in their Loads bribes. taking dispatchers reported regions surveyed ofthe each from to happen and drivers forthis ample opportunities creates system the tobribe dispatcher.be The dispatch way that hecould would make moremoney that the only toldus half-jokingly driver One Source: A Company-owned Driver-leased Driver-owned, leasedbacktocompany Ownership uthors analysisof2010porttruckdriver interviews TABLE 6:Reportedownership of interviewed drivers’ trucks 2 5 42 Number

27 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports 87 orts of Los In this context, a $15,000 86 e do agree this is a rent-to- e do agree e have reviewed several of several reviewed e have 88 85 ith the advent of clean truck programs at the P at the of clean truck programs ith the advent lump-sum payment is simply beyond the reach of most drivers. the reach is simply beyond lump-sum payment own scheme, and it is sharecropping or involuntary servitude, or involuntary and it is sharecropping scheme, own loan industry look ethical in the payday makes and it really comparison.” issues, these leases have In addition to the basic fairness classification. In employment for drivers’ important ramifications most of drivers’ control trucking companies exercise particular, over them leverage gives control essential tool, their truck. That in all other aspects of their work. behavior drivers’ The leases also contain large balloon payments at the end of at the end of balloon payments leases also contain large The explained his driver one interviewed is how their terms. Here to the truck, I’ll have to keep if I want situation: “After 5 years, detailed the truck.” Industry reports $15,000 or $16,000 for pay and pay limited take-home have drivers describe how above to paycheck. paycheck live frequently of Director Joe Rajkovacz, Congress, before During testimony Independent Driver Operator Owner- the for Regulatory Affairs has not enforced government Association noted that the federal such leasing schemes. from drivers meant to protect regulations as part of clean truck agreements He then described the new and a agreements” an “explosion in the sham lease purchase “W market: in the drayage failure key einforce einforce R Leases Truck Clean New Drivers of Control Company W new the use of expensive requiring Long Beach Angeles and become common have leasing arrangements trucks, complex also sometimes leases are These there. working among drivers W in Oakland and other ports. found as subjects interview by provided were leases, which these new as other drivers. well lease weekly make typically drivers Under these contracts, paycheck through for work they to the company payments trucking but distinct arrangements, deductions. In related lease-to-purchase or finance drivers’ companies co-sign In and collect lease payments. with banks agreements on the truck until the principle and interest pay drivers theory, the owns conclusion of the lease period. At that point, the driver truck. which through mechanisms several have companies However, particularly vulnerable are the trucks. Drivers can repossess they when arrangements under these kinds of lease to repossession or diesel prices rise, or when companies drop volumes cargo driver to a particular of loads given the volume decide to reduce in that occur regularly – circumstances reasons their own for the industry.

84 One said One 82 83 While drivers sums had invested large of money trucks their in their to relative incomes, significant most not have did at entities other to compared investment port.the those who own trucks For that they lease trucking to companies, most had bought oldest, the least expensive resaletruck they find, little could with value. Forty-two of our interviewees owned owntheir trucks. Thirty-seventhese of trucks 10 years than old. more are of Of those us an estimate who gave worth truck,the of their 25 percent own trucks worth less $5,000. than the question.the A few they said drive could faster hours. more or work he could make more money more make port if the he could efficiently. worked more Financial Control – Investment in business: port Many truck drivers own or lease trucks, their indicates a fact that business. their in some investment The fact of truck ownership alone is not, to a establish sufficient driver as however, a true under the independent contractor IRS status. test of employment In several cases, merely that courts found have doesowning a truck vehicle or other not investment capital a sufficient constitute be business.” to “in Another 25 percent own 25 percent trucksAnother worth between $5,000-$10,000, with 30 percent worth truck the of the asestimating between $15,000-$25,000. No driver owns a truck unless this worth than more leasedit is either or purchased with a subsidized loan. drivers of the we interviewedFive were trucks.leasing Three had new “green” leased truck their directly from the and two, they driving were company for, both from Southern California, were driving company-provided trucks. Of the interviewed10 workers Ports from the of Los Angeles and Long Beach, only two

28 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports insurer. insurance company didn’t with hehadtocompany goget talk the to officials whohewas; know though saidthat the a claim, workerthe Andonedriver whenhefiled payseven the premiums. the company that that madethrough covers noted hadtothe them.claimsalways be company, Some the know nameorcontact information for that donoteven volunteered drivers they made. Some to what insurance be about exactly coversconfusion the andhowaclaimwas company-provided insurance routinelyDrivers’ cards the list company expressed party. drivers the insured as Several them inbusiness. andkeep the trucks to purchase onthe companies andpublicfunds that depend they areundercapitalized so they trucks, For emissions-compliant whoare fortunate those new truck. to their enough drive own owned You ourinsurance.” use insurance toown work for my company. It’s You ofthe deal… part You work for us. insurance. need insurance itthroughpurchase andmust obtain the company. Another said,“You have cannot your ofTransportation Department own license, hecannot his authority andbusiness has adriver unless matter,that apractical as insurance onlyavailable is through the company. that stated Onedriver under the insurance impressionto the purchase from that arecompany. required they said Others are drivers some purchases, prohibit contracts required andsome regulations Although federal compensation, accident andfor occupational insurance. paychecks. Some also deduct for liability insurance for deduct andtheir the bobtails, drivers also Some paychecks. onthe company drivers’ from one depends to insurance, ofwhich provide theare costs deducted but driver interviewed Every example ofthis. agood provides Insurance coverage inthe industry tocontrol financial of the subject butinstead company drive. for which ofcustomers, number they to reinforce that sell to thata businesses reimbursement are notinindependent serves drivers However, generallyanindicator status. ofemployee or travel expenses, inthis context, lackof reimbursement receives for Nodriver business ofexpenses: –Reimbursement Control Financial 80,000 lbs. trucks for limitednumbers ofhours before takingarest. Fines: Federal andstatelaws tightlyregulate certaintruckoperations. Drivers can,for instance,onlyoperate their Danger Zone and hedoesn’t want towork. Sothatwas it.” hours andIwant togohome.Sohewent home.Hewas fired thenext day because they saidhedenied the work needed tobeturnedintothe harbor. Helives inFontana, whichisfar… hetoldhim,I’ve beenworking toomany “This guy[atmy company] was tired andhewanted togohomeandthedispatchertoldhim hehadaloadthat A SouthernCalifornia driver toldusthefollowing storytoexplainwhy drivers take over-hour and overweight loads: longer thanlegallimitsand hauloverweight loads. You You work forus. insurance. You need our insurance.” use “You insurance cannot have your own towork formy company. It’s ofthe deal… part Lessor… osAngelesCompany V of thesecondweek, withoutfurthernotice,andLesseeshallimmediatelysurrender theLeasedEquipmentto If thedifference isnotmadeuponthefollowing week…this Leasewillautomaticallyterminateonthe Sunday give noticetoLesseeoftheinsufficientdeliveries andLesseemustmake upthedifference onthefollowing week. If, attheendofany given week, Lesseehasfailed todeliver atleastfifteen(15)containers that week, Lessormay 91 P ort truckingcompaniessometimesrequire thattheirdrivers violatetheselaws, forcing themtowork ehicle LeaseAgreement 90 Trucks andtheirhauledgoodsgenerally cannotexceed 89 for workers’

29 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports 9 3 12 10 15 25 28 36 Number of Drivers uthors analysis of 2010 port truck driver interviews analysis of 2010 port truck driver uthors T operating authority T operating ource: A Source: es es, company required it required es, company es es, company required it required es, company Y No Y Y Y No ompany sign only Company sign Driver river has own business license has own Driver river has DO Driver Indicia truck Signage on drivers ndicia of driver ability to offer services independently of company ability to 7: Indicia of driver BLE TA About half of the driversAbout half of the possessed Department business own licenses their and of U.S. 12 of 22 who But of these, over half (nine of 15 who had a DOT number, number. Transportation indicatedhad a license) they only did so becauserequired Only three to. trucking them the company ownhad their placard truck. on their own their business 54 drivers have None card. Only one of the had incorporated corporation his the business. lease have he did so to in order his explained that He truck. driversOf the who answered our question about ports, how they the themselves at represent all they truck company’s hasfor which the drive. company driver’s themselvesthe identifiedEach by Each fills out paperwork signthe the name of on its in door. DOT company’s number and the in the insurance Nearly all have A few business company. cards name of the have in the company. They a business not operate do the truckingfor companiesseparate from company. name of the theywhich drive. Financial Control a degree - Summary: trucking over exert Port companies of financialcontrol with a view is inconsistent drivers that of the as contractors independenttheir business people. Like wageother earners, and but by working harder way drivers in any their work cannot profit from or practicalities, By contract they a time, and do not offer restricted are at one employer to longer. services general public. the to Theyreceiveregular a (if in irregular paycheck amounts). Financial Control regular – Payments in amounts set intervals at set: All drivers paid at are intervals. 54 drivers, of the 47 a weekly on comes pay basis, For usually Fridays. on Thirteenthe 20 of examined we be would included payment aftercontracts clauses that 15 days made an invoice that was received, a method usually of payment associated of these in nine work. with contract However, cases, drivers us week. is actual told by the payment amounts were The variablepayment and dependednumberthe and on value of loads a driver got in a given week. Financial Control – Services offered market: No driver on the offered servicesto or the market on general public.the

30 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports renewed upon completion. upon renewed contract automatically either hadnoenddate, oritwas that contract allindicated about length, question their a automatically. whoanswered Ofthe 47interviewees of the hadnoenddate contracts orrenewed forworked their company than ayear. less half(11) Over had andonlyseven forhad worked oneto years, three forworked the12 samecompany for years, overthree 34had continuing relationship the with company haul. for which Ofour54 interviewees, they hada weinterviewed drivers Most thecompany: with Type relationship -Ongoing ofRelationship acommon carrier…” as ofproperty transportation ofinterstate inthe business engaged is Carrier novehicle(s), owns andWHEREAS, Carrier “WHEREAS, for the contract: the purpose company’sof the trucking which described contracts, We their business. to integral –itis thenot just companies’ business found inone notable aclause is perform companiesPort have drivers trucking nootherbuttojob port job convey cargo. Thethat restaurant. to the same services preparerproviding a restaurant more is likelythan anemployee atax to be likely that the worker consideredanemployee. should be that are of the acore company’s part worker services activity, provides business regular more itis indicates that ifa IRS : The ofthecompany activity acore are Type -Services ofRelationship benefits. provides andwhetherthe business work together; parties the relationship contract presence ofawritten relationship andits to the howthe with business; work central is whetherthe tooperation; anongoingorexclusive worker the business has Facets the ofthis examination worker andthe include business. whether the performed between ofthe relationship thehow closely worker into integrated is andthe thepermanency business of relationship,” “type test of IRSstatus, The employment third andfinaldimensionof the assesses the IRSTs “Type ofRela bindingthem to the company. further to theand costs drivers, inthis context instability onfinancial to serve to contractor indicate pass independent status, used while formally factors, income. These aparticular guarantee Nordothey for theexpenses drivers. Two contract The indicatingdonot independent statuscompanies reimburse were factors present. TABLE 8:Frequency ofFinancial Control Factors Indicating anEmployee/Employer RelationshipunderIRSTest t ofEmployment St Driver doesnotoffer servicesonthemarket regular periodof time Driver receives aregular wage amountfor a Driver isreimbursed for expenses Driver hasnosignificant investment Driver hasnoopportunity for profit orloss Financial Control Factors tionship”: TheThirdDimensionof Source: A uthors analysisof2010porttruckdriver interviews a tus 92 For example, alinechef workingin TABLE 9:Lengthoftimeatcurrent company More thanthree years One tothree years Less thanoneyear Length ofTime Always variable amounts Always regular periods, Never Usually Always Frequency Source: A uthors analysisof2010porttruckdriver interviews 34 12 7 Number ofDrivers

31 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports “I work only for them. My them. for My only “I work is for them. I am insurance them. for They me,working hired the have drive.I cannot I don’t paperwork, agreement. but the read agreement the veryI didn’t know but I for I work seriously, them.” Number of drivers 13 32 4 94 uthors analysis of 2010 port truck driver interviews analysis of 2010 port truck driver uthors So too, IRS the advises it need stating that a contract not follow 93 ource: A Source: imits on drivers’ ability to work for another company ability to work BLE 10: Limits on drivers’ TA ontract language explicitly prohibits Contract work limitations prohibit Practical has a second job Driver imits on working for another company Limits on working Type of Relationship - Employee benefitsType drivers: None of the we interviewed provided were with benefits, traditional workplace any such as pensions, or time. health insurance, or holiday vacation, Type of Relationship - Written contracts: we reviewed that Type Every contract parties the stated that Most of these documents relationship. employer-employee, and not establishingwere a contractual, – all drafted recitals lengthy trucking drivers from by the the that – have withoutinput companies to “observations”effect.the driverto In one in question case,carefully a long list of an addendum gave Though it was contract a between and an a truckingcompany rules.” these “not were that stating desires do as to in, “your company it carefully driver the referred as to a “company,” individual driver, business with our company.” Nonetheless, worker a business fact the the contractor” calls an “independent that or that a worker signs agreement an independent does contractor it legally not make true. Case is nearly law parties’ the unanimous that label is not dispositive and will be ignored actual conduct if their relationship. establishes a different As a matter of regulation, leasesAs authorized a matter the carrier provide that must lessee exclusive have shall lease, of the possession, duration use and exclusive the equipment the though for of the control, the or for, possession equipment be is time the operated clause the applied may to only by, authorized carrierlessee. Eleven contracts we reviewed, of the 13 drivers, and carrier the that said possession contract. of the has duration exclusive the for Thirteencontracts not were assignable, meaningthat to another pass driver not on to the could contract the perform. These provisionsto prevent contractual operate from freeing trucksworkers themselves or their either Also, 45 drivers said company. other any for do work to as company other they any allowed not for were work to some although of practice had contracts which a matter allowed consent. Only four outside with company work a – one drove company another for work drivers did any taxi during off hours,three did the other and occasional work.hauling required time nor the the DOTIn addition, driversthey neither noted have number that or was The overall expressedthissentiment one, by one company. than more for work to insurance Seattle interviewees:one of the I am working for them. is for insurance My them. only for “I work the paperwork, have readthe Theythem. hired I the agreement. me, but cannot drive. I don’t I didn’t them.” agreement I know for but very I work seriously, that the worker is an independent parties the worker contractor: “How the determines together work that whether is an employee or an independent worker the contractor.”

32 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports their dependence on the trucking companies. companies. onthetheir trucking dependence exacerbates andso the from companies drivers, to risk the individual business passes circumstances andinsurance like fuel rather expenses for ofthese business than – each receivereimbursements –andallmust pay their company orlease own they Whilemanycompany trucks drive for work. andare entirelyto companythe general public, on that dependent at atime,donotofferservices for profitis their to work onlyopportunity harder andlonger. work only Drivers for one trucking work on the for. dependent Port arecompanies they financially drivers Like otherrate piece workers, fired. be can andalldrivers andevaluated monitored is company behavior Drivers’ dispatchers. by set sequence undera of the companies, activities by workset the business The drivers at times in,andthen check lineupagain. unload, lineup,dispatch, drive, load, inspect, path ofreport, a set days Their at drive. follow which they ofthe andmonitoring speed ofsafetyrecords, review tests, drug inspections, to truck are subject They controls. behavioral to strict Port are subject drivers that: reveal anddocuments employer-employee Specifically, relationships. the interviews identificationlasting that and dependence, characterize financial of the controls, stringent behavioral evidence wehave found significant andemployment documents, interviews ofdriver In this analysis Conclusion: TheTypical Por relationship. ofthe parties’ evidence substantial the as contracts wedonotview ofit, characterization than the parties’ important caution that andmany Since courts thecontractors. the nature IRS ofthe relationship more is arethat independent they workers that contracts with companies provided always specified Second, today,like many to industries the drivers. benefits companiesemployee donotprovide trucking First, drayage drivers. With present for port are to never this dimension,twofactors respect and onlythe work ofthis company. relationships onecompany. generallyhadlongstanding with always we interviewed was Theirwork Thedrivers companies. thework always sole ofthe almost trucking itis Infact, companies. trucking into integrated Type work fully that Port is drivers’ truck -Summary: ofthe ofRelationship andexacerbates companies. drivers onthe their trucking individual dependence riskPerhaps more to the business tellingly, such provide benefits. passes benefits lack the of We industries employers since little inlow-wage few thatgiven weight, should be this factor believe the partieswork together Contract languageanditsrelationship tohow Employer provides benefits for oneemployer atatime Continuing relationship withemployer, works Services are acore activityofthebusiness Relationship Factors TABLE 11:Frequency of Relationship Factors Indicating an Employee/Employer RelationshipunderIRSTest Source: A uthors analysis of 2010porttruckdriver interviews t TruckDriverisaMisclassifidEmployee V Never Usually Always Frequency ariable

33 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports Port drivers are closely identified with the companies they haul for. Drivers work for years for the the for years for Drivers work theycompaniesfor. drivers closely identified the are Port haul with placards usecompany as others beingto themselves represent company, from the employer, same iswork Their integrated fully and permits,company. the independentlyof their work offer and rarely trucking of the is and trucking companies almost of the sole always that work the companies.into strict the of in light IRSViewed status, test of employment these findings suggestthat strongly drivers majority of the the we studied misclassified. were broadscopeThe of industry-wide misclassification is clearer when less even such those standards stringent status as of employment taken into are statutes insurance unemployment wage in federal and state found minimum laws typical the that we conclude industry, will withinthe be While there account. some exceptions portindependent contractor truck driver we interviewed is misclassified a employee.

34 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports be abandoned inorder to environmental, the address abandoned industry’s efficiency,be andworkforce problems. onto risk their andbusiness workforce, costs capital companies must shift inwhich trucking model, studieshave trucking’s economic that concluded independent-contracting port Several business operate. that they thetrucks andown thedrivers to employ companies trucking port requiring RECOMMENDATION rules should adoptuniform 1:Policymakers enforcement strategic with necessary. is policy industry-wide combines sound However, problems wehave the approach aunified solve fundamental identified, that to truly industry. trucking port the beyond thatfar go problems andaddress ofmisclassification drivers real can provide relief for individual They arelaudableapproaches These andwell pursuing. worth practice. if the provisions industry companyis astandard violationcan show misclassification that its that a the allows “safecompany –arule effectively as rule amend whatfrom known relief is harbor” The Taxpayer Responsibility, Accountability,S.2882) would of2009(H.R.3408, Act andConsistency workers. oncompanies for misclassifying apenalty andimpose workers oftheir employment rights, alltheir accurate companiesnotify require to andcontractors, keep records oftheir employees S.3254)would 5107, Prevention Act(H.R. Misclassification The Employee ofworkers. classification ability to agencies’ enforce federal wouldstrengthensome proper Recently legislation introduced would allowthem to recouptheir expenses. that assets have firms toFew since are workfew willing trucking oncontingency attorneys private that ofaction stem claimsorother misclassification. tofrom causes attorney pursuewage-and-hour litigation. afford Moreover,endless often cannot to hire drivers an port workers, like many low-wage workers claim that exposing to contractors, workersasindependent are thereby classified properly simplywaythat some small change and in their areofmisclassification then foundcontracts guilty inother contexts, companies the case been has as name.Second, underanew andreopening closing may drivers inthe result instead company its companyencourage to aparticular stop misclassifying enforcement litigation tostemming orprivate which enough agency are from actions substantial ofwhich frequently. happen both companies andfold existing ones, penalties Inthis environment, compete fiercelywith oneanother. trucking new itsimple makes to form assets lack Their of is dominated by numerous trucking companies thatport First, for two reasons: case is the This relief. limited onlyprovide industry trucking port to enforce efforts labor, Butindividual contractors. independent workers as safety,laws in the tax and of misclassification andcorrect to expose tool apowerful been often andpubliclitigationPrivate has be remedied. must industry trucking port in the Misclassification model. as abusiness contractor misclassification the surrounding nation’s crises health adoptionofindependent ofindustry’s result are adirect ports onthe road.Theenvironmental andpublic trucks andmaintainingby purchasing diesel the oldest anddoso expenses, capital the contractors industry’s independent bear low-wage because arise consequences industry, trucking further Inthe port protections. basic workers without vulnerable andleaves at disadvantage; acompetitive law-abiding businesses puts compensation, and other taxes; Security, Social workers’ drainspublic cofferspayroll, through uncollected Misclassification Recommendations After reviewing literature on the industry and conducting our independent research, wehave research, andconducting our independent literature onthe industry reviewing After 95

35 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports

96 Reflectingthis on position, a friend 100 101 And Southern fuel California truck alternative for market preeminent is the 98 99 The result is that 94 percent of 94 resultport moves The that are cleanpercent is being made by gate truckscargo 97 Such requirements would directlySuch address misclassification and the a single establish stroke with a revived, for conditions cleaner industry. 2: Congress pass should the CleanRECOMMENDATION Ports Act 2010 to allow of port authorities to tackle misclassification as it pertains to environmental impacts, or safety, efficiencyof port trucking operations. uniform standards the best in the authorities are and enforce positionPort implement to recommended port above. Since trucking public must firms access ports – passing tightly through and – ports work their conduct operational, to gates safety, an ideal apply controlled to sit at place standards these to firms.environmental of Los it Port Angeles adopted operation.In 2008, the Since standards a program put such into to 80 Program has truck reduced drayage began, emissions by approximately average Clean the Truck percent; banned 10,000 older model, than heavier more polluting trucks; provided nearly $70 million in port subsidies; and leveraged gas in clean diesel and natural private $600 million in investment fuel trucks. The Clean PortsThe ActClean of 2010 (H.R. Act clarifies The would this 5967) to problem. solve federal specifically allowing law, preemption portsto establish rulesfor port trucks would improve that have As we or efficiency. operational pollution, safety, congestion,environmental highway traffic and misclassificationimprovements status shown, to related employment specificallyintimately are in all these areas.Portsthese The ActClean would make necessary improvements possible, in actions. with targetedconjunction public and private enforcement The American TruckingPort of LosAssociations’the Angeles programto reliedfederalchallenge on The American local it claims prohibit standardspreemption rules that authorities from establishing any which or route, service”“price, affectcould the of a trucking firm. reached the same conclusion. In particular, we have found that driver misclassification that found we have an integralis In particular, reached conclusion. same the addressed it will part be only business that dominant model comprehensively of the conclude and with fundamental a restructuring industry. the of The most this effective to to do uniform is establish way rulesrequire that port companies trucking drivers their and own trucks employ the to studies conducted drivers on Economic the operate. behalf of port authorities and local governments, organizations and environmental community ownership and driveradopting uniform requirements of vehicle concluded that similarly have most is the effectiveemployment competitiveto a establish harbor doesway truckingthat market of pollution cost not unsustainably public or individual push the the reduction workers. onto of the court brief filed by the U.S. Department of Transportation Administration the Bush under U.S. courtDepartment briefof the filed of the by or safety, took position address environmental, ports the to authority that the have do not currently port to related concerns congestion trucking. (as of September 2010). technology. technology. Associations obtained an injunction has American by the blocked Trucking key portionsHowever, programof this over two years. for Other ports significantly scaled have their or delayed back own district of similar While the clean litigation. truck threat programscourt the recently due to ruled Los the Angeles program that was not preempted, industry the group has filedappeal an writing, time of this the against program at and an injunction in place the remains jeopardizing its achievements.

36 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports through programs. publicsubsidy unable are financially drivers maintainto properly new, truck havethat leased they trucks port clean for ajoint Club, example, environmentalstudySierra that andlabor issued found that individual The the success programs. ofall these jeopardizes model contractorThe independent business andWashingtonBoard State’s that are amongthose dothe same. AirAgency Clean Sound Puget At AirResources the operations. the state California improve level, port orto otherwise trucks port from toemissions Transportation reducediesel funding –provide ofEnergy andthe Department –including the Environmental agencies Agency, of federal Protection the Department Several misclassification. that enddriver onadoption ofrequirements contingent activities andotherport reduction emissions diesel for RECOMMENDATION funds should incentive make agencies andlocal 4:Federal,state ofnow-rampant misclassification. free is contribute the to industry ensuring andsignificantly drivers truck largewould helpthatofport numbers violations address harm directly industry enforcement trucking Concerted contractorport independent in misclassification. the inaddressing partners important havebeen andstateLabor agencies of Department The enforcementas it relates powers. to their specific misclassification andsafetylaws have labor authority similar to correct enforcingState charged with tax, agencies wage, orother, ofminimum through injunctive cases reliefpractice ofmisclassification in violations. companies to endthe trucking require anditcan workingconditions; orillegal in substandard produced goods seize It itcan holdmultiple can employers accountable standards; labor for lax laws. andERISA leave, unemployment family minimum insurance, offederal wage, OSHA violations as apriority. contractor independent abuses identified correcting the It has authority to address itself has Labor of Department The andmultiple state agencies. of the U.S. ofLabor Department under the enforcementissue inareas is a key contractorauthority Independent misclassification industry. trucking the port in ofmisclassification toendthepractice action coordinated substantial, should take agencies enforcement andstate Labor,RECOMMENDATION of theIRS, Department 3:The U.S. provisions. way to enforce effective the most taskforce wouldbe these Aninteragency employ their drivers. operate; b)pay maintenance; for they companies truck to a)holdtitle to andc) alltrucks directly contractual2) establishment companies relationships ofdirect that the trucking with requires EPAcurrent to meet fleets standards; emissions that models port require onolder truck 1) bans wouldinclude: programs Those programs. truck clean adoptingeffective contingent onthe ports authorities to port directly andother grants operations funding reductions emissions providing into by trucking acleaner,Federal port transform industry can andstate programs family-wage the industry.way Theonly to do that is the trucks. companies to to own the trucking require andmaintenance, ownership oftruck in the costs are internalized includingoperation, particularly until of the costs necessary be will Butsuch unsustainable. subsidies contractors are likewise byindependent owned afleet to upgrade largethatrequired The ongoingpublicsubsidies havebeen into service. trucks madebyputtingcleaner gains these compromise reductions theemissions diesel inevitably time,that onthemaintenance. table andtruck lackofmaintenance food Over will between choose 102 The drivers still earn so little earn arethat forced effectively still to Thedrivers they

37 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports , 2008, 393-408; p. (4) vol. 10 Haveman Jon and Kristen Monaco, Comprehensive Management Truck Program: An Economic Analysis 2009); (Apr. John Husing et al., Pedro Bay Ports Clean Air Action Plan: Economic Analysis. (Sept. 2007); Sejal Patel, Clean From to Clunker: The Economics of Emissions Jon Zerolnick,Control(Apr 2010); Road to The Shared Prosperity:Regional The Economic Benefits of San PedroPorts’ Bay Clean TruckProgram (Aug. 2007); EdnaBonacich and Jake B. Wilson, Getting the Goods: Ports, Labor and the Logistics Revolution, (Cornell University 2008); and David Bensman, “Port Trucking Down the Demos Low (July Road,” 2009). Cargo volume data from the Association of American Port Authorities’ database. North American Port Container Traffic (1990-2009). Date of study refers to the study’s date of publication. assemble thisTo data and obtain aggregated results, reviewed 1) we each survey and accompanying report; Compiled b) a database of principal measures and data from each survey; Identified 3) and compared surveyattributes measures and to assure data consistency; Communicated 4) with survey authors to clarify survey methods, measures and results where necessary; the Weighted 5) results from each survey by the relative size of the port in which the survey was conducted, Treasury Inspector General Administration, Tax for While Actions Misclassification, Have Been to Address Taken Worker Employmentan Program Tax Agency-Wide and Better Data Are Needed (Feb 2009). Linda H. Donahue, et al., Worker Misclassification The Cost of York State.Cornell in New University ILR School (2007). See also Fiscal Policy Institute, Compensation:State Workers New Big How is York the Coverage Shortfall?, (Jan. 2007). Horton,Jerome California State Assembly Assembly 51st Member, District, recorded interview within “1099 Misclassification:Time PlayIt’s to by Rules,” the video streamavailable http://www.mosaicprint.com/client_preview/1099/at index.html. CGR Management Consultants, Survey “A of Drayage Drivers Serving the San Pedro Bay Ports, prepared Gateway for Cities Council of Governments (Mar 2007) 11. p. John Husing et al., Pedro Bay Ports Clean Air Action Plan: Economic Analysis. (Sept. 2007) p.v. Kristen Monaco, Incentivizing Retrofitting Truck Portin Drayage: A Study of Driversat Ports the of Los Angeles and Long Beach (Feb 2008). Kristen and Conditions Working Monaco, Wage Drivers of Truck the at Ports Long of Beach and Los Angeles. (2008) 18. p. Art Marroquin, rules “Judge Port of L.A. can fully implement Clean Trucks Program,” Daily Breeze, (Aug. 26, 2010). Environmental Response to the National Protection Environmental Agency, EPA’s Justice Advisory Council Report: Reducing Air Emissions Associated with Goods Environmental Movement: Toward Working Justice. (July 2010). Natural Resources Defense Council, Harboring Pollution: Strategies to Clean U.S. Up Ports 2004). (Aug Measures across Today, USA U.S. target port pollution (Mar 26, 2009); See also press release: EPA IMO Sets Sail Global for Action Pollution on from Large Ships 2008) (Oct 10, cited in Janea Scott and Hilary Sinnamon, Protecting American Health from Global Shipping Pollution (2009). InterviewTelephone with Carl Pope, Chairman, Sierra Club, December 6, 2010. Art Marroquin, “Port to decide truckers future,” Los Angeles 2008); Times Evelyn (Mar Larrubia, 17, “Labor, environmentalists unusual allies,” Los Angeles 2008). Times (Nov 27, Shane Hamilton, Trucking Country:Wal-MartRoad to The America’s (PrincetonEconomy Dorothy 2008) 227-231; pp. Robyn, Braking the Special Interests: Trucking Deregulation and the Politics of Policy Reform (University of Chicago 1987). David Bensman, “Port Trucking Down the Demos Low (July Road,” 2009). See, example, for Moffat & Nichols and BST Associates, Container Diversion and Economic Impact Study: Effects of Higher Drayage Costs San at 2007); Pedro Bay Ports Boston 27, (Sep Consulting San Group, Pedro Bay Ports Clean Program: Truck CTP options analysis (Mar 2008); Beacon Economics, Clean Program Truck (Feb 2008); Robert Leachman, Port and Modal Elasticity Containerized of Asian Imports via Ports the (Jan Seattle-Tacoma 2008); Anne Goodchild and Karthik Mohan, “The TrucksClean Program:Evaluation Policy of Impactson TerminalMarine Operations,” Maritime Economics and Logistics All quotes and other information about Max Galvan and the company works he come from for direct interviews with him. Mr. Galvan was of the one not 58 drivers interviewed in the course of the misclassification analysis. Frederick Johring, before Testimony the United States House of Representatives Committee Transportation on and Infrastructure (May 2010). Department of Homeland Security, Transportation Security Administration, Transportation Identification Worker Credential (TWIC) Implementation in the Maritime Sector: Notice of Proposed Rulemaking, Federal 71 Register 98 (May 22, 2006) 29427-29428. pp. John Husing et al., Pedro Bay Ports Clean Air Action Plan: Economic Analysis. (Sept. 2007) iv. p. In a recent letter decision that mirrors our analysis, the Internal Revenue Service determined that a independent contractor port driver was a misclassified employee. InternalRevenue Service Letter Decision Case 2010). (Nov. #76535 Lalith de Silva et al., Independent Contractors: Prevalence and Implications Unemployment for Insurance Programs, prepared U.S. for Department Employment of Labor, and TrainingDivision by Planmatics, Inc. 2000) (Feb. p.i-iv. Government Accountability Office,Employment Arrangements:Improved Outreach Could Help Worker EnsureProper Classification,GAO-06-656 (July 2006)p. 25. Treasury Inspector General Administration, Tax for WhileActions Misclassification, Have Been to Address Taken Worker Employmentan Program Tax Agency-Wide and Better Data AreNeeded (Feb 2009).

25 26 27 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1 2 3 4 5 6 7 8 9 Endnotes

38 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports 56 56 55 54 53 52 51 50 49 48 47 46 45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 30 29 28 University of North Florida: Northeast Florida Center for Community Initiatives (Nov 2009) p. 3. 2009) (Nov Initiatives for Community Center Florida Northeast Florida: ofNorth University Authority. Port at Jacksonville on Survey Port Truckers Report 1.3: Report Rowley,and Adam Research Jaffee David p. 14. 2009) (Jan ports Jersey at New Survey truckers on Port Report Yael and Bromberg, Bensman David 2000). Policy for Public (Oregon Center Overview Brief and A History How Poverty: We Measure Willis, Jessie overview,see For a brief the 1930s. in developed were formulas poverty The original (2010). #8090 publication Brief, Issue Reform on Health Focus Exchanges, the in Subsidies CHIP, and For Medicaid, Processes Enrollment and Eligibility Reform: Health Explaining Foundation, Family Kaiser children. with amajority found also children on dependent results reported that studies p.18. All (2004) Beach Long and Angeles ofLos Ports at the ofDrayage Grobar, AStudy Lisa and Monaco Kristen p.18; 2008) (Feb Beach” Long and Angeles Los of the Ports at Drivers of Study A Drayage: in Port Retrofitting Truck “Incentivizing Monaco, p.10; Kristen (2007) Growth Economic and Truck Drivers, Health, Public Endangers Port the at Contracting How Road: Independent Low the Taking Greenwich, p.51; Howard (2007) Seattle Truckers ofPort in Study A Haul: Short Rig, Big p.19; Jobs, Port (Apr. 2009) Analysis Economic An Program: Truck Management Comprehensive Monaco, Kristen and Jon by Haveman were found 79% 59%to from ranging rates marital found surveys Driver 53-3032. Code: Occupation Statistics, ofLabor Bureau 2010). (May Infrastructure and on Transportation Committee ofRepresentative House the Testimony before Johring, Frederick Trucking. ofWest Coast manager general then- Gatchet, Dan quoting (Oct.10, 2005) Post-Intelligencer more acute,”Seattle grows shortage Wong,Brad “Truck driver 23. p. (2008) Transportation Intermodal in Challenges and Inc, Trends Officer,Roadlink Commercial Ken Kellaway,Chief 23. p. (2008) Transportation Intermodal in Challenges and Inc, Trends Officer,Roadlink Commercial Ken Kellaway, Chief p. 7. (2006) 2006 Outlook Trucking Express, Counties Southern President, Griley, Brian p. 5. 2009) (Nov Initiatives for Community Center Florida Northeast Florida: ofNorth University Authority. Port at Jacksonville on Survey Port Truckers Report 1.3: Report Rowley,and Adam Research Jaffee David 1994). Institute Policy (Economic Industry Trucking ofthe Deregulation Toll: the Economic Paying Belzer, Michael 20%. at to deregulation solely due total the puts Belzer Michael data, firm-level Using account. into taken are changes technological and demand market power, labor reduced union declining as such factors related arguably when deregulation to wereattributable declines ofwages 12.4% p. 107. estimate al. 2006) (May et Monaco Economics ofApplied Journal Rail,” and ofMotorCarriage AStudy Industries: ofWages Deregulated in “A Analysis al., et Series Monaco Time Kristen in graph See pp. 105-118. 2006) (May Economics. ofApplied Journal Rail,” and ofMotorCarriage AStudy Industries: ofWages Deregulated in “A Analysis al., et Series Monaco Time Kristen contractors. independent other are just they firms, trucking ofthe standpoint From the truck. the owns that driver the with 50/50 proceeds their split they because drivers 50/50 called are Jersey, sub-haulers New In p. 8. (2006) 2006 Outlook Trucking Griley, Brian p. 47. Economy. forthcoming., aGlobal in Freight Moving Transportation: Freight Intermodal (eds.), Meyer Michael and Guiliano Genevieve Hoel, Lester in Resources” Human and pp. 210-11; “Labor Belzer, Michael 2004), (June Economics ofNetwork Review Versus Regulation,” Deregulation Ports: and Carriers Transportation Intermodal of p. Wayne 3; Talley, “Wage 2009) Differentials Road,” (July Low Demos the Down Trucking “Port Bensman, David p. 48. (Apr 2009) Analysis Economic An Program: Truck Management Comprehensive Monaco, Kristen and Jon Haveman p. 18. (2008) Transportation Intermodal in Ken Kellaway, Trends Challenges and p. 25. (2006) Coalition Transport Ocean Agriculture the to presentation a Link, Missing The Drayage: Ken Kellaway,Intermodal p. 20; (2006) Association Footwear and Apparel American the to apresentation Industry, Trucking on the Perspective p. Gill, 18; Jim (2006) 2006 Outlook Trucking Griley, Brian p. i. 2007) (Sept. Analysis. Economic Plan: Action Air Clean Ports Bay Pedro al., et H

39 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports , (D. NJ (D. , 04-2846); No. Clarissa BridgeTransport Terminal , 765 F.2d 1317, 1328 (5th 1985) Cir. (court found that owning 1317, F.2d , 765 a Owner-OperatorIndependent Operators Association, et al. v. , 109 F.R.D. 568, F.R.D. , 109 589 (E.D.N.C. 1986) (farm labor contractors’ investment in scattered buses and trucks is minimal Port Jobs, Big Rig, Short Haul: Study A in of Port Truckers Seattle (2007) 24. p. Howard Greenwich, Takingthe Low Independent Road: How Contracting the at Port Endangers Public Health, Truck Drivers, and Economic Growth (2007) 10. p. See David Bensman Bromberg, and Yael Report Survey Port on Truckers New at Jersey Ports (Jan 2009) 16. p. Robin Cohen and Michael Martinez, Health Insurance Coverage: Early Release of Estimates the From National Health Interview Survey (National Center Health for Statistics Sept 2010). Diane Bailey et al., Driving Fumes, on Drivers Truck Face Elevated Health Risks Diesel From Pollution. NRDC Issue Paper (Dec. 2007). David Bensman Bromberg, and Yael Report Survey Port on Truckers New at Jersey Ports (Jan 2009) 16. p. Brian Griley, Southern Counties Express,Trucking Outlook 2006, 13. p. Kellaway, ChiefKen Commercial Roadlink Officer, Trends Inc, and Challenges inIntermodal Transportation (2008)31. p. The statement was given in the course of our interviews aboutlegal status, methodology the of which is described in the body of the report. ‘Double log books’ refers to the practice of keeping authorities log for one enforcing the hour work limits and another the for drivers themselves. Kristen Monaco and Lisa A Study Grobar, of Drayage the at Ports of Los Angeles and Long Beach (2004) 13. p. HavemanJon and Kristen Monaco, Comprehensive Management Truck Program: An Economic Analysis 2009) (Apr. 53- pp. 55; Kristen Monaco and Lisa A Study Grobar, of Drayage the at Ports Los of Angeles and Long Beach (2004) 27-33. pp. “Wildcat Strike Idles Cargo L.A.-Area at Ports,” Los Angeles Times (Nov 13, “Many 1993); truckers stop driving” Savannah 2000);Morning News Back, “Truckers (Oct port Florida but 17, protest Times 2000). over,” not Union (Oct 10 Louis Sahagun, “Unsafe trucks ports,” stream The Los of LA’s Angeles out Times (Jan 2008). 21, 49 C.F.R. §395.1-.25. Kristen Monaco and Lisa A Study Grobar, of Drayage the at Ports of Los Angeles and Long Beach (2004) 18. p. David Bensman Bromberg,and Yael Report Survey Port on Truckers New at Jersey Ports (Jan 2009) 31. p. Howard Greenwich, Taking the Low Road: Independent How Contracting the at Port Endangers Public Health, Truck Drivers, and Economic Growth (2007) 32. p. David Bensman Bromberg,and Yael Report Survey Port on Truckers New at Jersey Ports (Jan 2009) 2. p. 29 U.S.C. §203(g); 29 C.F.R. §785.11. United States Department of the Treasury, Internal Revenue Service, “Independent Contractor Employee?” or Publication CB 296, in the Revenue Ruling 8-2008). IRS In 1987-1 (Rev. 1987, developed1779 87-41, a 20 factor test used to determine liability Social for Security, Medicare and Unemployment Insurance taxes. The current three factor test refinementis a of thatearlier test that largely incorporates the earlier 20 factors. The questionnaire was translated Spanishinto and interviews done were throughSpanish translation in Los Angeles, Long Beach and Oakland. A Vietnamese translator also assisted interviews on in Oakland. Example interview questions include: does ‘How the company keep track of deliveries ‘If wanted you and pick-ups?’; to quit, ‘Do wouldhow have you to it?’; do check you in with the company any at time during the that?’; do you day? do and How ‘Who keeps track of whether are you doing your job correctly?’ See49 also C.F.R. 12(i). 49 C.F.R. 12(h). This issue was also raised by driversduring strikeweek-long a at East Coast ports 1999. in See “Trucking Journaltime bomb,” of Commerce (Sept. 1999). 16, 49 C.F.R. 12(k). The drivers’ discretion in selectionroutes of is circumscribed by their job, which is defined by the location of originand destination of the haul given to them by their dispatcher. In Seattle, two of the major destinations, the Burlington Northern and Union Pacific intermodal yards, mileslocated are 1-2 Port from of Seattle terminals. In otherthe ports, drivers typically drive longer distances, always but with piece one of cargo going between two distinct points. See, example, for H. McLeod Beliz W. & Sons v. Packing Co. truck and a van was a “capital not investment” sufficient toconstitute being in a separate business in a FLSA Haywood case); Barnesv. compared and to constitutes grower, “nearly zero” capital investment). Some drivers had inflated ideas about the value of their truck. For example, one driver estimated his1993 Freightliner was worth A local $15-17K. dealer lists that year and model of truck as worth $2,000. Some of this may be to due the economic downturn which has reduced cargo volumes and hence the need and for value of trucks. bans Truck from California have also lowered the value of trucks because many pre-2003 trucks are moving of California out and into other markets sale. for Consumer F Kell-Holland, “Lease Fleece?” or in Landline Magazine (July 52-55. p. 2010) 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88

40 The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports 102 101 100 99 98 97 96 95 94 93 92 91 90 89 Alliance and the Int’l Brotherhood of Teamsters (Apr. ofTeamsters 2010). Brotherhood Int’l the and Alliance BlueGreen the LAANE, Club, the Sierra of a report Control, Emissions of Economics The Clunker: to From Clean Patel, Sejal 2008). Oct. Cal, No. 08-56503(C.D. Reversal, al. et Angeles, v. Los of City Associations Trucking American §14501 U.S.C. (c)49 (1). 2010). 25, Oct. (C.D. Cal, No. 08-56503 Appeal, al. et Angeles, v. Los of City Associations Trucking American 2010. 15, on November viewed Move Analysis, Gate Truck Program Clean Angeles, ofLos Port 2010. 15, on November viewed sheet, fact Truck Program Clean Angeles, ofLos Port (Apr 2009). ofOakland Port the by commissioned Analysis, Impact Economic Program: Management Truck Comprehensive Monaco, Kristen and Jon Haveman 2008); (Mar Angeles ofLos Port the by commissioned Analysis, Options CTP Truck Program: Clean Ports Bay Pedro Group, San Consulting Boston (2007); Economy for aSustainable Alliance Bay East ofthe areport Growth, Economic and Truck Drivers, Health, Public Endangers Port at the Contracting How Road: Independent Low the Taking (Apr. ofTeamsters Greenwich, 2010); Brotherhood Howard Int’l the and Alliance Blue-Green the LAANE, Club, the Sierra of a report Control Emissions of Economics The Clunker: to From Clean Patel, Sejal 2009). (July Road, Demos Low the Down Trucking Port David, Bensman, (Feb2008); Program Trucks Clean Economics, Beacon (Apr. 2009); Analysis Economic An Program: Truck Management Comprehensive Monaco, Kristen and Jon Haveman 2008); (Mar analysis options CTP Truck Program: Clean Ports Bay Pedro Group, San Consulting Boston irs.gov/businesses/small/article/0,,id=99921,00.html. (Self-Employed) or2010) Employee? (Aug 3, at http://www. Contractor Independent Service, Revenue Internal States United v. McComb Corp. Food Rutherford for example See (2010). 15-A Publication Online Service. Revenue Internal 658.17. C.F.R. 23 395.1-.25. C.F.R. 49 trailer. ofthe independent is that engine, and cab the including tractor, truck the to refers ‘Bobtail’ , 331 U.S. 722 (1947). 722 , 331 U.S. , Brief for United States of America as Amicus Curiae in Support of Support in Curiae Amicus as ofAmerica States for United , Brief Pending Injunction Preliminary for Motion on Plaintiff’s , Ruling

41 The Big Rig: Poverty, Pollution, and the Misclassification of TruckD rivers at America’s Ports the BIG RIG Poverty, Pollution, and the Misclassification of Truck Drivers at America’s Ports a survey and research report

Rebecca Smith Dr. David Bensman Paul Alexander Marvy