Recent Rulings Send Message to Employers Who Misclassify Workers

A lawsuit has yielded $5 million in back wages.

The U.S. Department of Labor announced that federal courts have ruled against two Bay Area companies after investigations revealed they deliberately misclassified workers as independent contractors to cheat them out of wages and workplace benefits.

National Consolidated Couriers Inc. has agreed to pay $5 million in back wages and damages to more than 600 drivers it misclassified as independent contractors, according to the agency. The ruling revealed that during the course of the Labor Department's investigation, the company tried to destroy records showing an employment relationship with its drivers and had been misclassifying the workers for at least five years.

In a separate incident, a federal judge ruled that drivers for Mountain View-based Stanford Yellow Taxi Cab, Inc. also were misclassified.

"Misclassification is workplace fraud, plain and simple," said U.S. Secretary of Labor Thomas E. Perez. "It hurts workers by denying them a fair day's pay for a fair day's work, and it also undermines the competitiveness of businesses that are playing by the rules. At the Labor Department, through vigilant and vigorous enforcement, we are cracking down on irresponsible employers who game the system and cheat their employees — and that's what they are: not contractors, but employees."

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