California Labor Commissioner’s BOFE unit cites Costco, Ryder Last Mile Inc., and Mega Nice Trucking LLC for $868,128 in misclassification violations
Mega Nice Trucking, based in Chula Vista, served as a subcontractor for third-party logistics companies, including Ryder Last Mile, which contracted with drivers to deliver large items from big box retailers across the San Diego region.
An investigation by the LCO’s Bureau of Field Enforcement (BOFE) determined that drivers working under Mega Nice Trucking were systematically misclassified as independent contractors, depriving them of basic workplace protections such as minimum wage, overtime pay, and legally mandated meal and rest breaks.
Although the drivers were reclassified as employees in 2023, the violations persisted. Workers continued to receive a flat daily rate without proper compensation for overtime hours or missed meal breaks. Investigators also uncovered falsified payroll records, suggesting deliberate efforts to conceal these ongoing labor law violations.
What California Labor Commissioner Lilia García-Brower said: “Companies that exert control over workers cannot evade responsibility by hiding behind layers of subcontracting. Misclassification strips workers of their rights and protections, and employers who direct and control their workforce are responsible for paying all wages owed.”
The LCO also found that Costco and Ryder Last Mile exercised both direct and indirect control over the delivery drivers. They scheduled deliveries, mandated uniforms, enforced specific protocols, and closely monitored driver performance. These actions establish a joint employer relationship with Mega Nice Trucking and make Costco and Ryder Last Mile equally liable for the misclassification and resulting wage theft.
The investigation began in July 2024 after two former Mega Nice Trucking employees filed complaints alleging wage theft and misclassification. During the investigation, Mega Nice Trucking admitted to misclassifying its drivers. Investigators also discovered that the company had previously been penalized by the California Employment Development Department for similar violations, indicating a repeated pattern of noncompliance.
Costco, Ryder Last Mile, and Mega Nice Trucking have been jointly cited by the LCO for a total of $868,128, of which $662,978 is payable to the affected workers. All three employers have appealed the citations.
About the Bureau of Field Enforcement
BOFE is a unit within the LCO enforcing key labor laws through on-site investigations and strategic enforcement actions.
BOFE targets industries with high rates of labor violations, conducting workplace inspections to uncover wage theft, child labor violations, failure to carry workers’ compensation insurance, and other unlawful employment practices. Its work helps ensure fair treatment for workers while promoting a level playing field for responsible employers.
BOFE has issued more than 2,200 citations against employers for labor law violations between January 2022 and October 2025, recovering over $48.4 million in stolen wages, damages, and interest on behalf of workers.
This comes on top of multiple announcements this year highlighting a range of violations, including a settlement of $431,601 to return unpaid wages and damages to 86 carpenters, $1.1 Million in penalties issued to a Buena Park restaurant over wage and sick leave violations, and a citation of over $2 million for another case of misclassifying workers.
BOFE has also issued more than 3,100 notices to discontinue labor law violations in the past year, and corrected violations that collectively impacted more than 40,000 California workers.
To meet growing enforcement demands and expand outreach, BOFE has also increased staffing across key regions, strengthening its presence in communities most impacted by labor violations.
Workers who have questions about labor laws enforced by the LCO can call 1-833-LCO-INFO (833-526-4636) between the hours of 8:00 a.m. to 5:00 p.m. Monday through Friday, with services available in Spanish and other languages.
LCO is a division of the Department of Industrial Relations.
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Employers with Questions on Requirements May Contact: MakeItFair@dir.ca.gov
Media Contact: Communications@dir.ca.gov, (510) 286-1161