Santa Rosa, Calif., taxi company A-C Transportation Services Inc. has agreed to settle a $522,300 citation for refusing to provide its 30 drivers with workers’ compensation insurance coverage and for misclassifying them as independent contractors.
Company owners Kevin and Jennifer Kroh, also doing business as Healdsburg Cab Co., agreed to pay a fine of $200,000 in installments, with final payment in June 2021. If they default on the payments the agreement is void and the full $522,300 judgement will be due. The company also agreed to cease all operations.
The agreement comes after the company was issued a stop order judgment in October by a Sonoma County Superior Court judge for continuing to refuse to provide workers’ comp.
An investigation into the company in 2014 and found that it had failed to provide workers’ comp coverage from 2011 through 2014 and was misclassifying drivers as independent contractors.
A citation for $522,300 was issued and appealed by A-C Transportation claiming drivers were independent contractors who leased cabs from the businesses.
It was later determined that the drivers were employees and not contractors. A-C Transportation petitioned for a review the administrative decision in Sonoma County Superior Court, which found there was substantial denied the petition.
When A-C Transportation continued to operate and refused to secure workers’ comp, stop order was issued.
“Hard working business owners across California get up every day and play by the rules, even when it isn’t always easy. This case sends a powerful message to businesses that break those rules by misclassifying their employees,” California Labor Commissioner Julie A. Su said in a statement.
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