The California Labor Commissioner’s Office has cited Costco Wholesale Corporation, Ryder Last Mile Inc., and Mega Nice Trucking LLC for nearly $870,000 in misclassification and wage theft violations affecting 58 delivery drivers in the San Diego region. The investigation revealed that Mega Nice Trucking, a subcontractor for Ryder Last Mile and Costco, misclassified its drivers as independent contractors, effectively denying them basic labor protections. Despite reclassifying the drivers as employees in 2023, investigators found that violations continued through falsified payroll records and unpaid overtime.
According to Labor Commissioner Lillia Garcia-Brower, the companies set delivery schedules, enforced uniform requirements, and monitored each drivers’ performance. These activities established Costco and Ryder as joint employers responsible for any labor violations that occurred. “Companies that exert control over workers cannot evade responsibility by hiding behind layers of subcontracting,” García-Brower said. “Misclassification strips workers of their rights and protections, and employers who direct and control their workforce are responsible for paying all wages owed.”
This case underscores a widespread issue in California’s trucking and logistics industries, where tens of thousands of drivers may be misclassified as independent contractors to reduce labor costs. Misclassification allows employers to avoid paying into workers’ compensation, unemployment insurance, and Social Security, while burdening drivers with the expenses for fuel, maintenance, and insurance. According to estimates from the Employment Law Institute, a typical truck driver classified as an independent contractor would lose as much as $21,532 per year in income and benefits compared with what they would have earned as an employee.
Holding large corporations accountable for misclassifying workers is crucial for ensuring compliance, fair competition, and for restoring affected workers’ rights. When companies wrongly label workers as independent contractors, those workers are excluded from the very system designed to protect them. By enforcing accountability among joint employers, cases like this reaffirm the importance of ensuring all California workers can access the rights and benefits they have earned.
