As the American Trucking Associations continues its legal struggle to stop the Port of Los Angeles from implementing a concession program that would ban owner-operators from the port, the drayage companies that contract with those drivers will likely be facing new claims that the drivers are just misclassified employees.  Total Transportation Services Inc., which runs more than 150 drivers at the Port of Los Angeles and Port of Long Beach, was recently sent a determination letter from the IRS ruling that one former driver - classified as an owner-operator - was actually an employee. But the IRS determination doesn't end with just that one driver.

"This ruling pertains to all workers performing services under the same or similar circumstances," the IRS letter says. But it also says that "the determination is based on the application of law to the information presented to us during the course of our investigation... we are not in a position to personally judge the validity of the information submitted."

In fact, all the IRS information on the specific case was obtained from the driver. Although the IRS said in its letter that it contacted the company, it got no response, so it based its determination on the information it had available. "Any other conditions that were not known or furnished may change this determination," the letter advised.  TTSI President Vic LaRosa said the company has no record of any such communication from the IRS, and the IRS has not been able to document that such a message was sent. It's hard to believe that a message from the IRS would not get noticed, he said.  If the IRS determination were to stand, it would be devastating for the company, which would have to come up with withholding and other appropriate employee taxes and payments for its drivers.