The 1947 Taft-Hartley Act added exclusions of independent contractors and supervisors to the 1935 Wagner Act's exclusion of agricultural and domestic workers. Under the Taft-Hartley exclusions, employers can appear to delegate a degree of autonomy to employees that they wish to transform into "independent contractors, restructuring their pay as "miscellaneous income" rather than taxable wages. Such maneuvering allows employers to escape many legal and financial obligations-Social Security and other payroll taxes, workers' compensation liability, minimum wage and overtime requirements, and others. Employers can also deny contractors the health insurance, pensions and other benefits that are available to employees.
Not least, employers become free to fire workers classified as independent contractors with legal impunity if they seek to organize. They can also refuse tobargain with workers, even a majority, who are seen as contractors rather than employees.10
Congressional and administrative hearings have produced evidence that many employers deliberately misclassify workers as independent contractors, confident that fear of lost income and the stress of legal action will prevent workers from challenging the decision.11 One study estimated that the number of misclassified workers will exceed five million by the year 2005.12 But U.S. labor law still rests on a model of workers holding permanent jobs with a single employer, rather than adapting to new systems of contracting and subcontracting business relationships.
The Dunlop Commission's 1994 report cited earlier noted what it called "abuses and trends" associated with contracting out for labor:13
C Many public and private employers have subcontracted activities to enterprises that use the same workers part-time performing the same tasks at lower benefits and wage rates.
C In trucking, agriculture, and construction the device of owner-operator has expanded rapidly.14
C Homework and subcontracting have expanded in a number of sewing industries.
C These developments at times result in the avoidance of Social Security taxes, workers' compensation, unemployment insurance and benefits such as health insurance and pensions.
C*** These arrangements often attract new immigrants, minorities and women in the labor force who have few options. ***DID YOU GET THAT!??!!?!?
Misclassification of workers as independent contractors and the resulting legal impediments to freedom of association run the length and depth of the economy. In some cities, building owners have subcontracted cleaning operations to businesses that then turn around and franchise parts of the work to different groups of workers, often those in ethnic immigrant enclaves. As franchisees, these workers are considered independent contractors who cannot bargain for better terms and conditions.15
Many limousine and taxicab drivers are defined as independent contractors, even though they work full-time (indeed, often excessive hours) for a taxi company that owns the medallion or charter, the cars, the dispatching system, and other attributes of an employer. As independent contractors, taxi drivers are excluded from coverage by labor laws that are supposed to protect the right to organize. If they try to form and join a union, they can be fired with impunity by the taxicab company.16
Equally vulnerable are truck drivers who transport cargo from the nation's shipping ports to nearby warehouses for transfer to long-haul delivery trucks. Some 50,000 workers perform this labor. These workers used to be union employees making good wages, benefits and pensions before the deregulation of the trucking industry in the late 1970s. Nearly all of them are now reclassified as independent contractors rather than employees of the cargo firms, even though they are still completely dependent on those firms for their work and their pay. They are paid by the load and often spend hours of unpaid time waiting for cargo to be loaded onto their trucks. As one leading industry periodical puts it, port truck drivers "are the collective low man on the
industry totem pole."17 Many of these workers are immigrants who scrape together enough money to buy a truck and haul goods from the dock to the warehouse. They often have to do their own loading and unloading. Many say that when they settle accounts forexpenses, income from the cargo firms, and time spent on the job, they earn barely more than the minimum wage.18 One researcher found that "most non-union truckload employees give away their loading and unloading time and waste many unpaid hours-even unpaid days-waiting to load or unload, waiting for dispatch, and waiting on equipment."19 As one worker put it, "We are like slaves. We are like slaves to the big companies."20
While these workers are classified as independent contractors exempt from labor law coverage, many of them in fact have to sign exclusive contracts with trucking firms prohibiting them from selling their services to higher bidders. When companies shift employees to independent contractor status, workers are suddenly more vulnerable to costs they did not face before. For example, truck drivers injured on the job used to be covered by workers' compensation protection as employees. But as independent contractors, they must carry their own insurance, a benefit many forego as too expensive. Meanwhile, trucking firms escape any obligations to maintain workers' compensation insurance for injured drivers.21
Cargo firms have reacted to truckers' efforts to improve pay and conditions by renewed organizing and bargaining with refusals to bargain, blacklisting, and discrimination against organizing leaders. Excluded from coverage by the NLRA, these workers have no recourse. Employers even threaten to sue the workers under antitrust laws, accusing them of price-fixing for their services
