$800K-Plus Citation For Misclassifying Truckers as Independent Contractors

On Board of Field Enforcement investigation, California’s Labor Commissioner has citedCostco, Ryder Last Mile, and Mega Nice Trucking $868,128 for misclassifying truck drivers as independent contractors.  Ryder subcontracts big box store deliveries, and subcontracts in turn to Mega.

The BOFE found that Mega wrongly classified the drivers as independent, and Mega’s attempt to relabel them from independent to employee was a distinction without difference.  Mega continued to pay them a daily rate with no overtime and no meal premiums for missed meal breaks. Investigators also found falsified records.

The Labor Commissioner’s Office  rolled the findings up to Costco and Ryder as joint employers for their scheduling deliveries, monitoring driver performance, requiring uniforms and designated protocols.

Labor Commissioner Lilia García-Brower noted: “Companies that exert control over workers cannot evade responsibility by hiding behind layers of subcontracting. Misclassification strips workers of their rights and protections, and employers who direct and control their workforce are responsible for paying all wages owed.”

The companies are appealing the citation, but if they lose, 58 delivery drivers will share $662,978 of the total amount.

Take-Aways: Independent contractor status is not a matter of employer or employee choice.  Management should consult employment counsel to confirm that classifying workers as contractors meets California’s strict criteria.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Find Out What’s New In 2026 For a Happi(er) New Year – Annual Virtual Seminar for Employers
• Seemed Like a Good Idea: Home Care Outfit to Pay $2.3M for Misclassifying Caregivers as Independent Contractors (March 21, 2025)
• California’s Newest Independent Contractor Law Part I: Revamped Business-To-Business Exceptions (September 17, 2020)

Helena Kobrin
December 5, 2025