What the #&*%?

Below is a letter written by my son and I regarding a situation that is really unbelievable.  We are currently attempting to get someone in authority or in the media to pay attention to this situation and we are working on a documentary to expose a level of societal corruption that is allowed to exist. 

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

crpinkney@yahoo.com

cc:  Frances Lum, Labor Division Supervisor

                   808-586-1450