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New California Law Makes Retailers Liable for Trucking Labor Violations

Importers in California are now jointly liable for labor violations at trucking providers at the twin Ports of Los Angeles and Long Beach.

Signed into law by Gov. Jerry Brown, the bill, sponsored by State Sen. Ricardo Lara (D., Dist. 33) is considered the first in the nation that attempts to spread such financial liability through the supply chain.

Lara’s office issued a press release on Monday that said more than 40 percent of U.S. shipping-container traffic moves through the ports of Los Angeles, Long Beach and Oakland. But California’s 25,000 port truck drivers routinely face wage theft and illegal pay deductions while hauling goods for the world’s biggest brands.

“Gov. Brown’s signing of SB 1402 will allow port truck drivers to share in the benefits from California’s leading role in global trade,” Lara said. “Retailers using their power to end exploitation and restore good jobs for workers at our ports will mean port truckers are left behind no more.”

The Port of Long Beach, which with its neighbor Port of Los Angeles is the nation’s largest megaport and handles about 25 percent of the nation’s cargo container traffic, has been embroiled in labor disputes for many years. Lara noted that an investigation last year by USA Today found that “port trucking companies in Southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford.” The investigation found instances where drivers “end up owing money to their employers, essentially working for free.”

The California Division of Labor Standards Enforcement has won more than $45 million on behalf of 400 individual drivers.

The bill makes retailers jointly liable for violations of state labor and employment laws when they hire port trucking companies with unpaid final judgments for failure to pay wages, imposing unlawful expenses on employees, failure to remit payroll taxes or provide worker’s compensation insurance, misclassifying employees as independent contractors, and other labor law violations.

The law calls for port trucking companies to have access to a list of trucking companies prepared by the Division of Labor Standards Enforcement that have failed to pay final judgments. Retailers hiring port trucking companies with final judgments would be liable for future state labor and employment law violations by these trucking companies.