BOSTON -- Hundreds of drivers who deliver for The Home Depot claim they're forced to pay thousands of dollars in unnecessary costs because they have been misclassified as independent contractors when they should be considered employees.

NewsCenter 5's Sean Kelly reported Thursday that worker misclassificationis a huge problem in Massachusetts and the country because companies are not only violating workers' rights, but they're also cheating the government out of billions of dollars in lost tax revenue.

Allen Pike told Team 5 Investigates that he has never felt as though he's been in the driver's seat at his delivery job.

"It's a no-win situation. It's costing me money to make money, and it's not supposed to be set up that way," said Pike.

The company he drives for has told Pike and the IRS that he is an independent contractor, not an employee. Pike claims that classification is costing both drivers and taxpayers thousands of dollars.

"I am losing a lot of money. I took home $200 last week," said Pike.

Pike drives for Cardinal Logistics Management out of North Carolina, a company hired by The Home Depot to handle its deliveries.

Its New England operations are run out an office in Foxboro, Mass.

"They direct me on what store I'm supposed to go to, what time I'm supposed to be there, what time I'm supposed to leave, what time I'm supposed to make it to the customers house," said Pike.

Not only does Cardinal Logistics control Pike's schedule, but he told Team 5 Investigates that they require him to work exclusively for the company.

Pike also said he must pay for everything, including the cost of leasing his truck, maintenance, mileage, vehicle insurance and workers' compensation.

"I paid well over $7,000 alone on workers' comp," said Pike.

Richard Bentley also drove for Cardinal Logistics until he was let go this year. The state of New Hampshire determined he was misclassified because he, like Pike, was not free from the company's direction and control.

"I found out that they weren't taking out any employment tax, they weren't taking out any Social Security tax and they weren't paying our taxes. If we are employees, according to the state of New Hampshire, I feel those things should be paid," said Bentley.

And so do dozens of other drivers who are part of a class-action lawsuit in California alleging that

Cardinal is violating their rights with "an elaborate system and scheme to conceal its true status as the employer of its drivers."

"It is deceptive, and I think they're exposed to both civil and criminal charges," said legal analyst Peter Bellotti.

According to Bellotti, companies misclassify their workers for a variety of reasons. “Basically what you have is an incredible financial motivation on the part of an employer to look at his costs and determine where he can save money, where to cut corners, where he can cheat and likely get away with it," said Bellotti.

As for Cardinal Logistics Management, company executives declined an on-camera interview but told us the company "does not misclassify employees as contractors."

A spokesman for The Home Depot said the company requires Cardinal Logistics to comply with all laws and regulations and that it has no reason to believe they're in violation of this obligation.

Worker misclassification is a huge problem not only in Massachusetts but across the country. Our investigation has discovered that companies that violate workers’ rights rarely face any consequences for breaking the law because no one is enforcing it. And that means taxpayers end up paying the price.

Every year, the Government Accountability Office estimates the federal government loses $4.7 billion in tax revenue. In Massachusetts, researchers at Harvard University estimate it costs the government at the very least $152 million in tax revenue.

"If we're going to be raising taxes, cutting services to meet those budget deficits, I'd rather have them going after the people who are cheating, go after them and make them pay their fair share first," said Frank Callahan, president of the Massachusetts Building Trades Council.

Callahan told us he doesn't expect this problem to go away any time soon because of the lack of enforcement by state and federal agencies.

Suzanne Bump, the Secretary of Labor and Workforce Development for the Commonwealth of Massachusetts, told Team 5 Investigates that the Patrick administration, unlike the previous administration, is serious about cracking down on companies that try to cheat the system by misclassifying their employees.

"So far I have two agencies that are working together with the Attorney General's office to get an understanding of the scope of the problem. The governor has included in his budget additional funding for both investigators and lawyers in the attorney general's office," said Bump.

Lawmakers on Beacon Hill are also in agreement that it's worth more money to go after the companies that are cheating the system. Both the House and Senate have allocated an additional $400,000 to the Office of the Attorney General.

Resources:

To report a company you believe is misclassifying its employees, call Massachusetts Office of the Attorney General's Fair Labor Hotline: 617-727-3465

Cardinal's Statement