STG Logistics to Pay $2.2M to Drayage Drivers in New Jersey Misclassification Settlement

Published Aug 3, 05:41 PM UTC

STG Logistics has settled a worker misclassification case with New Jersey, agreeing to pay $2.2 million to drayage drivers who were misclassified as independent contractors. The total settlement is valued at $80.9 million, but most of that amount will be discharged through STG's recently concluded Chapter 11 bankruptcy, which eliminated 90% of the company's debt. The cash payout to drivers is considered a priority claim under bankruptcy law, ensuring they are compensated before other creditors. An additional $555,000 will go to New Jersey for penalties and unemployment compensation funds. The case, first filed in 2023 under a 2021 state law, stems from an investigation that began in 2019 when the drayage operations were still part of XPO Logistics. The settlement comes just before New Jersey codifies the ABC test on October 1, raising concerns among carriers.