Gary
S. Ige
Deputy
Attorney General
State
of Hawaii
Department
of the Attorney General
Labor
Division
Hale
Auhau
425
Queen Street
Honolulu,
Hawaii 96813
Dear
Mr. Ige,
I
filed an SS-8 Worker Classification form with the IRS. The IRS determination stated “the worker is
an independent contractor.” The
determination hinged on labeling the fees I paid to my employer as an
“investment”. The IRS determination
claimed that by paying the fee I became a member of the Hawaii Porter Service
Association which was considered as the same entity as the Hawaii Porter
Service. Thus, since I paid $15 per day
to the Hawaii Porter Service, the determination interpreted this fee as an
“investment” in which there was a possible return. It was absolutely not an investment. I never at any time had any input into the operations of the
Hawaii Porter Service.
The
IRS alludes to the service agreement that Hawaii Porter Service has with the
airlines as if I am a party to the agreement.
I, as a porter, had no more to do with the agreement between the Hawaii
Porter Service and the airlines than a pilot has to do with the airline’s
contract with vendors.
Amazingly,
in the process of making the determination that porters are independent
contractors they cite Section 4 of the Hawaii Porter Service “by-laws” stating
that “HPS can adopt new by-laws, repeal or amend them at any time without prior
notice to Porters.” Such a condition
clearly indicates an employee/employer relationship. An independent contractor would not allow a change in the
contract without their authorization.
The
ruling is fatally flawed. It attempts
to establish the logic that porters are essentially part owners of the Hawaii
Porter Service (which has the contract with the airlines) by paying $15/day to
be a member of the Hawaii Porter Service Association (which is the same,
according to the determination as the Hawaii Porter Service). Being part owners of the Hawaii Porter
Service places them in the same status as the Hawaii Porter Service in relation
to the airlines – independent contractor.
One
does not have to have an MBA or be a labor attorney to understand that porters
do not contract with the airlines. They
do not set their own hours or determine the manner in which their work is
performed. They possess no special
skills or have the opportunity to work for other companies or at different
locations. They can be fired at any
time and cannot hire anyone to assist with their responsibilities.
Perhaps
the most outrageous circumstance is the fact that the porters do not receive a
wage. How can a person who does not
receive a wage or any kind of payment from the organization that contracts with
them be an independent contractor?
The
IRS determination is absolutely ridiculous and does not come close to following
the “Common Law” principles it purports to use as its guidelines. In the determination it states:
Generally, the
relationship of employer and employee exists when the person for whom the
services are performed has the right to control and direct the individual who
performs the services, not only as to what is to be done, but also how it is to
be done.
The
above, from the IRS determination, describes the relationship between the
Hawaii Porter Service and the porters yet it is somehow twisted into a
justification for declaring that the porters are independent contractors. It is
evidence of gross incompetence or deliberate corruption. Shouldn’t the IRS as the collector of taxes
for the government be concerned that for ten years a business owner has avoided
paying employee taxes by not paying employees?
Shouldn’t the IRS be concerned that an employer has been for ten years
and continues to collect at least $15 per day in cash of unreported income from
over 100 employees? If you do the math
the $15 per day fee alone amounts to over 5.4 million dollars in
unreported income. The unpaid and
untaxed wages amounts to over 15 million dollars. That means Mr. Michael Warren has stolen in
excess of 20 million dollars from hard working men and women over the
past 10 years and is continuing to add on to that total. The amazing thing is that he has done this
in plain sight and with the cooperation of the airlines, the State of Hawaii,
and the United States government.
When
will someone speak up for the little guy and simply enforce the law or shall
greed and corruption prevail indefinitely?
Are you Mr. Ige responsible for upholding the law? Mr. Warren has been for over ten years and
continues to do so currently, exploiting men and women of Hawaii and violating
several Hawaii statutes.
Mr.
Warren has continuously violated HRS 387-2(3): failing to pay required
statutory minimum wage; HRS 387-6: for failing to keep records, post notices,
and failing to furnish pay data as required by statute; HRS 388-2: for failing
to establish at least two pay periods each month and paying earned wages within
seven days after the end of each pay period; HRS 388-7: for failing to notify
employees at the time of hire of their pay rate; HRS 387-4.5 and 388-8: for
contravening the statute by private agreement; and HRS 388: for collecting an
illegal deduction (the $15/day fee).
These violations where first ruled on by the Department of Labor in
2004; Case # 002291.
Violating
these laws continuously since 2003 has allowed Mr. Warren to amass a fortune at
the expense of his employees. Who is
responsible for enforcement? What are the
penalties for stealing millions of dollars via this type of extortion and
exploitation?
I
recently heard a report on National Public Radio's All things Considered
that reviewed a book call Blindspot: Hidden Biases of Good People. The book outlines how prejudices are
often connected to perceived social status.
That is, when a person is perceived as being from the same or higher
social status professionals such as yourself are more likely to do their best. When persons or clients are perceived as
being of a lower social status professionals are likely to give less than their
best and create an unconscious double standard. I have felt like you identify more with the wealthy business man,
Michael Warren, than you do with me, the poor unemployed student. Thus, you are less likely to give me your
best and willing to overlook the egregious violations of Mr. Warren.
Mr.
Warren has been extorting and exploiting millions of dollars from unsuspecting
hard working Hawaii citizens. The
evidence is available in abundance. He
continues to do so up to the present and is showing no indication of ceasing
his illegal activity. The question for
you, Mr. Ige, as Deputy Attorney General for the State of Hawaii, What are you
going to do? When will we take him to
court and hold him (and others) accountable?
This
afternoon I visited Hilo Airport and spoke with two porters and asked them if
they would be interested in filing complaints against Mr. Warren. The said they were familiar with my case but
were fearful that if they took any action they would lose their jobs. One of the porters admitted that it had been
a rough week for him and that he had only collected $7/day in tips while
working 9 hours per day. They were
clearly intimidated by Mr. Warren and he is using their fear to continue to
exploit them. What more is needed to
establish extortion of employees?
Please
respond to my questions in writing.
Respectfully,
Craig Robert Pinkney
Craig
Robert Pinkney
cc: Frances Lum, Labor Division Supervisor
808-586-1450
