Dateline: Los Angeles/Long Beach

Disguising Employees

January 15, 2011

If it looks like an employee, works like an employee, acts like employee it must be a — “contractor?”

Disguising employees in order to avoid paying workers’ compensation, unemployment insurance, health insurance and state and federal taxes is a scheme that port trucking companies have mastered in the last three decades.

“These companies are cheating everyone and they are getting away with it. If someone in my family gets sick we have to go to a public hospital and use up tax payer’s money. It’s not fair because these companies have money. Every year billions of dollars come through these ports, so then why are my neighbors and your neighbors paying my family’s health care?” said Jose Guzman, a port truck driver at the ports of Los Angeles and Long Beach.

Jose’s frustration is reflected in a February 2009 U.S. Treasury Inspector General estimate, which found that the unpaid Social Security, Medicare, and Unemployment Insurance taxes that companies skirt due to misclassification have cost the nation $15 billion!