National Consolidated Couriers Inc. agreed to pay $5 million in unpaid wages and damages after misclassifying more than 600 delivery drivers in California as independent contractors, the US Department of Labor announced today.

The case is one of two misclassification cases announced by the Department of Labor. In another case, the department is pursuing almost $3 million in back pay and damages against Stanford Yellow Taxi Cab of Mountain View, Calif., for misclassifying dozens of drivers as independent contractors.

“As these court rulings indicate, the tide is turning against those employers who misuse independent contractor status to take advantage of workers,” said Regional Solicitor Janet Herold of the Labor Department’s Western Region, who litigated both cases. “The courts recognize the nature of this problem and stand ready to ensure that justice is served.”

National Consolidated Couriers misclassified workers since April 2010, according to court records. The San Leandro, Calif.-based firm required drivers to operate at its direction and wear badges. They were also subject to discipline by the company and did not negotiate pay.

The company also tried to destroy records showing an employment relationship with drivers during the course of the federal investigation, according to the Labor Department.

Judgement in the National Consolidated Couriers case was filed last month.

In the taxi case, Stanford Yellow Taxi Cab required drivers to be on the job six days per week for 12-hour shifts but did not compensate them for all hours, according to the department. Stanford also did not allow drivers to change their schedules or operate independently by reaching out directly to passengers. The company also had a dress code.

In addition, the cab company threatened and intimidated drivers who were cooperating with investigators, according to the department. One worker was fired days before trial.

“Misclassification is workplace fraud, plain and simple,” said US Secretary of Labor Thomas Perez. “It hurts workers by denying them a fair day’s pay for a fair day’s work, and it also undermines the competitiveness of businesses that are playing by the rules. At the Labor Department, through vigilant and vigorous enforcement, we are cracking down on irresponsible employers who game the system and cheat their employees — and that’s what they are: not contractors, but employees."

Investigations by the Labor Department’s Wage and Hour Division resulted in more than $79 million in back wages for more than 109,000 workers misclassified as independent contractors.

In other independent contractor classification news:

• A case claiming the Yelp Inc. online review site should treat reviewers as employees was dismissed, according to court records. The case, Lily Jeung et al. v. Yelp Inc. has sought class-action status. Contributing reviews to Yelp would at most be characterized as an act of volunteerism, according to the court. And if plaintiffs are at most volunteers, no claim is possible under the Fair Labor Standards Act.
• Fitzhugh Contracting LLC, a logging and trucking contractor based in Alabama, agreed to pay nearly $113,000 in back wages and damages to settle a misclassification case, the US Department of Labor’s wage and hour division announced. A US Labor Department investigation found Fitzhugh Contracting paid 63 workers straight time for all hours worked, in violation of the Fair Labor Standards Act which requires overtime payment of time and a half the employee's rate of pay for all hours worked beyond 40 in a workweek. The employer also misclassified 46 employees as independent contractors.
• Right-to-control proved a major factor in a recent California Court of Appeals decision that found four Southern California truck drivers were employees, not independent contractors. Logistics provider Seacon Logix used the drivers to haul items from the ports of Los Angeles and Long Beach to warehouses. But drivers took issue with paycheck deductions for use of trucks, and the state Labor Commissioner’s Office and trial court ruled the drivers should be reimbursed because they were employees and not independent contractors. The Court of Appeals agreed saying Seacon exerted “tremendous control,” and independent contractor wording in contracts was not dispositive. The four drivers were awarded a total of $107,803.06.
• Another driver in California filed a lawsuit against Uber claiming the ride-sharing firm misclassified him as an independent contractor, joining other suits already filed, PCWorld reports.