For those of you getting into the holiday frame of mind, here’s a tip about tipping the person who delivers your newspaper: don’t. Or at least before you check the little box on your newspaper invoice tipping your carrier — consider leaving it blank and taping a check in an envelope to your door (or use the envelope many carriers provide themselves).
This summer, I wrote a story about problems with newspaper deliveries in the Twin Cities. Since then, I’ve had several conversations with carriers, mainly those who deliver for the Star Tribune, describing their work environment: the steady deterioration of their compensation; the “take it or leave it” terms of employment under the current system; how difficult-to-impossible it is to get a definitive accounting of their tips; and how unlikely it is they’ll ever band together enough to do anything about it.
All in all, it’s a dismaying picture of what happens when a large company takes the familiar path of offloading employees, their benefits and basic job protections under the guise of granting them freedom to become “independent contractors.”
Most of the people interviewed for this piece insisted on anonymity because of their fears of retaliation. Several others refused any comment whatsoever. But over beers in a west metro bar, two carriers who’ve delivered the Strib for multiple decades described their jobs. It’s a tough way to make a buck.
‘You could make a living’
Under the current system, which has been evolving for almost two decades, the Star Tribune uses 21 “agents” to handle delivery of its papers (down from 46 several years ago). These agents are tasked with hiring the individual carriers and operating the various depots around the metro where carriers arrive in predawn hours to load their private vehicles and set off on their routes.
“The Star Tribune shifted to this independent contractor idea in the late ’90s,” said one of the carriers I spoke to. “But it was still a great rate [of compensation per paper delivered]. You could make a living, and your tip money was passed on straight to you. Now, with this agency concept, which kind of kicked in big time about 2006, it’s not so much. The rate we get is a lot less. There’s no sick-time pay. We cover all the insurance, and of course repairs on our cars. But the tips never seem to match what customers tell us they’ve given, if we get them at all. And we have no way of finding out what the books are saying.”
The two carriers both say that after subtracting for fuel, insurance and repairs (one of the carriers said he’d gone through eight junker vehicles in the past five years) they’re making, “about $5 an hour these days.”
The way tips are supposed to work is this: The customer designates $20 or whatever in the little box on the invoice. The Strib, despite having no official business connection to the carriers, does the accounting work and passes the tip money on to its “agencies,” which then dole out the money — which means a lot more to the carriers today than it did back in the days when their compensation on a rate-per-paper basis was higher.
This tip accounting, they say, comes in what’s called a “green sheet,” which the Strib regularly sends out to the agencies.
Tim Klava, an agent since 2007, is now the metro area’s single largest operator, owning five agencies and employing 116 carriers — “and 90 percent of them have been here since day one.”
Klava hasn’t been accused of improprieties involving tips, and he insists his carriers can come in and check their tip account anytime they want. “Absolutely they can see it. We report weekly what they’re getting.”
But the carriers claim that’s not the case with most agents. “I’ve asked and I’ve never been allowed to see it,” says one of the carriers I talked to. “And I keep asking why we can’t just see the green sheet numbers when we get our checks. Why isn’t that just a routine procedure? And I’m told it’s too much extra paperwork, and basically, ‘Get the hell out of here.’ The point is there’s no transparency. You just get your check. And if you want to raise a stink, well, look out.”
‘It wasn’t their business’
Scott Scheid is one carrier, now out of the game, who will put his name to his story. Now on medical disability after four surgeries for diabetes-related problems, Scheid says the low compensation, nonexistent benefits and burden of penalties for late deliveries, wrong address deliveries, wet papers and on and on has created an exodus of people like him. The agents, he says, “are desperate for people. If they lose someone, or a carrier calls in sick, there’s a good chance they’re going to have to do the route themselves. Either them or someone in the depot. But really, right now, it’s like the Marines at the end in Vietnam. They’ll take anyone. And training, by the way, is also nonexistent.”
“One time, when I asked about tips, the agent just flat out told me: ‘I can do anything I want [with that money],” said Scheid.
In 2008, Scheid managed to beat one of the agents to the green sheet, copying and resealing it and proving conclusively that the carriers had been shorted by an average of $700 per carrier.
The Strib soon stepped in and dropped the hammer on the guy running the agency, who paid out thousands in back tip money and was replaced with a new agent.
But the carriers believe tip skimming continues to this day. “Before we had the hard numbers, we’d complain to the Strib and all they’d say is, ‘Take it up with the agents,’” Scheid says. “Their attitude then and now is that it wasn’t their business.”
No legal obligation
And legally, it isn’t. Despite handling the carriers’ tip money through their accounting department and distributing it back to the agents, the Strib has no legal obligation, much less liability, to see that the money gets to the people their forms suggest to subscribers it will get to. In other words, the “independent contractor” concept saves the company on salaries and benefits but also puts up a wall when it comes to issues such as the tip dispute.
To some, the arrangement doesn’t pass the smell test, even if it’s completely legal. “Obviously, there are practical and legal reasons why they don’t want to see [the carriers] as employees,” said business attorney and Mitchell-Hamline School of Law professor Daniel Kleinberger. “But I don’t know that having acted as, in essence, an accounts payable department for the carriers, they can get rid of that duty [to see that the money gets into the carriers’ hands] simply by delegating it out to these other people.”
Strib spokesman Steve Yaeger defended the paper’s position in all this on the grounds that the players involved — both agents and carriers — are independent contractors, free to negotiate their own contracts and resolve their own disagreements.
“We believe the system is fair to everyone,” said Yaeger. “Our part [of the tip] system is strictly as a pass-through service. The others are independent contractors and if they have disputes, it’s between them.”
‘Forget about organizing’
To outside observers, the situation would seem like fertile ground for a union to try to organize the carriers, but those I spoke to were unanimous in their opinion that it will never happen.
“I can’t say for sure, but I suspect a lot of the Hispanic carriers have documentation problems,” said Scheid. “So they’re not going to do anything that rocks the boat. They just want a paycheck. … And the rest of them? Hell, I’d say 90 percent of the carriers in the metro are Tea Party Republicans. They hate themselves and they hate unions. So forget about organizing.”
Short of some operatic Norma Rae moment, the best option, Kleinberger offers, is for the Strib to step in once again, to “at minimum, make certain in its contracts with these agency people that it is clear what monies go to the carriers.”