An auto parts distributor and an Arizona-based delivery provider have been ordered to pay $5.6 million to 1,398 drivers misclassified as independent contractors, the Department of Labor said in a Thursday news release.
Joint employers Parts Authority and Diligent Delivery Systems will pay $2.8 million in back wages and the same amount in liquidated damages, the release said, after the Department of Labor obtained a consent judgment in federal court on Nov. 17. The judgment also requires the companies and owner Larry Browne to pay $150,000 in civil money penalties, and for Parts Authority to treat delivery drivers as employees.
The investigation and litigation spanned from April 20, 2012, to March 31, 2020. Misclassified employees were denied minimum wage rights, overtime pay and other protections and benefits, Principal Deputy Wage and Hour Administrator Jessica Looman said in a statement. The company also required employees to use personal vehicles for deliveries without compensation, the release added.
The drivers referenced in the case mostly performed light-duty and last mile delivery runs, according to a Department of Labor spokesperson. The judgment calls for some of the drivers to be paid tens of thousands of dollars. One driver is owed more than $120,000 in back wages, liquidated damages and interest, according to the order.
Parts Authority is a national distributor of automotive replacement parts, tools, equipment and transmissions. Diligent Delivery uses a nationwide network of more than 5,600 driver associates to complete thousands of deliveries daily for various industries, according to its website. Neither company responded to a request for comment.
Transport Dive reporter Colin Campbell contributed to this report.