SB 1402

SB 1402. Photo by Unsplash.

Companies using drayage (ship-to-warehouse) services in California should pay close attention to California Senate Bill 1402, a new law that went into effect Jan. 1, 2019.

The bill essentially makes your company responsible for unpaid wages, expenses, damages and penalties if the port trucking companies you hire have labor and employment violations.

SB 1402 required California’s Division of Labor Standards Enforcement (DLSE) to establish an online “blacklist” directory with the names of port drayage companies who have unsatisfied labor malpractice legal judgments against them. Companies appear on the list only after the period of possible judicial appeals has ended.

Under the new law, any businesses who hire these blacklisted port drayage companies will be held jointly liable for 50 percent of the wages and damages owed to its drivers.

To avoid fines and responsibility, employers should never hire a blacklisted provider (check the list regularly!), and focus only on companies that pay their drayage truckers hourly. It is also wise to avoid, or carefully question, drayage providers who hire independent owner-operators.

If your company has an existing contract with a blacklisted provider, you are not liable for damages until the contract ends, or 90 days after the company appears on the blacklist (whichever is shorter).

View current blacklisted providers.

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