WASHINGTON: The practice of underpaying their employees, which recently landed an Indian diplomat into police custody, has now entangled a Pakistani-owned car rental service into a lawsuit.

Sunny’s Executive Sedan Service, one of Washington’s largest, provides luxury limousines for dignitaries and its clients include foreign missions, commercial organisations and US think-tanks.

It also provides an entire fleet of cars whenever a Pakistani head of state or government visits Washington as the Pakistan Embassy is one of its major clients.

Among US politicians, Hillary Clinton, John McCain, John Kerry and Newt Gingrich have all used Sunny’s limousines. Prestigious media organisations CNN, MSNBC, Fox News and Al-Jazeera among them – also use Sunny’s for bringing guests to their studios.

So Sunny’s is not new to the US media but recently it has been in the news not for ferrying VIPs around Washington but for underpaying its employees.

As many as 25 of its drivers have sued the company, accusing Sunny’s of systematically ripping them off as they drove their clients.

One of them, Ishaku Atam told a US federal court that the company’s owner Shafqat Iqbal Chaudry, aka Sunny, cheated his drivers “out of wages by misleading them as to what he billed the networks and other clients in his 50-driver sedan business,” the Huffington Post reported.

The suits allege that he pocketed much of the gratuity charges (tips) that customers would have assumed went to the drivers. And the drivers also claim that Mr Chaudry made them pay for petrol, even though clients were billed for fuel surcharges, and buy accoutrements, like bottled water and soda, for the sedans from him at marked-up prices.

The Sunny’s drivers claim their boss took advantage of a scheme widespread in the transportation business: the misclassification of employees as “independent contractors”.

According to Huffington Post, the scheme allows the employer to avoid unemployment taxes and workers compensation costs, and in many cases, shift liabilities to those who would otherwise be considered their employees.

But the arrangement is also supposed to offer certain benefits to the worker, particularly in the form of tax write-offs. But the Sunny’s drivers told the Post that they were unable to enjoy many of those advantages. Ishaku Atam, Goitom Bisrat and a third driver, Babar Khan, told Huffington Post that while they had fuel costs deducted from their pay cheques they were instructed by Sunny’s not to write off that expense on their tax returns.

Recently, a US federal judge ruled that the complaint filed in Virginia by the 25 drivers wouldn’t hold up as a collective lawsuit, but 13 drivers have now refiled their own individual lawsuits against Sunny’s in Washington.

Mr Chaudry, when contacted by the US media for comments, said he would respond later but did not. And a lawyer for Mr Chaudry said they wouldn’t comment on the drivers’ allegations.

The drivers claim that they offer first-class rides to their clients who, in turn, pay a premium for the escort.

They also say that driving for Sunny’s required them to be available 12 hours a day, six days a week, which made it difficult to pursue other opportunities.

They also said that management required them to wear uniforms. One suit alleges that Sunny’s management “controlled all aspects of plaintiff’s job duties through threats... and through the ability to withhold assignments”.

According to the lawsuit, the drivers’ statuses were only changed from independent contractors to employees in 2011, although the pay arrangement stayed generally the same.

According to the complaint, the drivers also weren’t paid for the time they had to spend getting their cars washed, taking care of vehicle inspection and fetching sedans for Mr Chaudry.

The drivers claim Mr Chaudry billed clients at a rate higher than what he told his workers he charged, paying them less than what their agreement entitled them to.

Mr Khan, who emigrated from Pakistan, told the Post he felt like Mr Chaudry runs the operation “like a Pakistani brick factory”.