Dive Brief:

• Port truck drivers employed by California Cartage Express are demanding the City of Los Angeles conduct a company-wide investigation over concerns of systemic labor violations.
• On Tuesday, the drivers filed minimum wage violation claims with the Office of Wage Standards, claiming the company, an NFI Industries subsidiary, "fails to pay drivers at least one hour a day, every day," according to a press release.
• The drivers allege the failure to pay is a result of employee misclassification. As independent contractors, drivers are paid in a piece-rate system, which compensates for cargo movements but does not account for duties such as daily inspections, cleaning and repairing, nor does it provide sick leave.

Dive Insight:

The minimum wage claims are the latest legal actions against California Cartage, which has already been sued by the City of Los Angeles, been ordered to pay $3.5 million in back wages by the Department of Labor and been featured in a USA Today exposé about truck driver misclassification.

The drivers claim California Cartage's practices are systemic, affecting not just drivers, but also conditions at warehouse operations.

The concerns over labor violations are extending to NFI Industries (California Cartage's parent company) at large, which in October saw the Los Angeles City Council unanimously veto a proposed permit for a new warehouse that would be run by another subsidiary, California Transload Services.

"Trucking and warehouse companies cut costs by misclassifying employees and independent contractors in order to avoid paying the wages and benefits required by federal, state and city law, and by cutting corners when it comes to worker safety," Councilman Joe Buscaino said at the time, according to MyNewsLa.com.

The website reports the councilman is looking for "safeguards that protect against labor disruptions" in a new permit. NFI Industries was tasked with going back to the drawing board for a new permit that would avoid conflict between the owners and workers.

If the Office of Wage Standards accepts the request to conduct an investigation into of the port truck drivers' complaint and finds systemic violations in the company's payment scheme, it may create a precedent for other drivers and alter the way drayage providers structure payments.

NFI and California Cartage contest employees classified as independent contractors are contractors willingly.

"The independent contractors who provide services to us are entrepreneurs who have chosen to remain independent business owners instead of becoming employees, as evidenced by their decision not to fill the thousands of employee driver positions that are currently open in Southern California," the companies said in a statement sent to Supply Chain Dive. "These hard-working men and women want to remain independent and continue to enjoy the flexibility to provide services when and how they please."