AB5 law can put out of work 70000 drivers in California
Trade officials sent a letter to California Gov. Gavin Newsom requesting a temporary suspension of the state contractors law.
The AB5 Act, which was originally due to go into effect in 2020, actually makes it harder for trucking companies to classify drivers who regularly work for them as independent contractors.
It’s also pushing companies to treat drivers like employees with benefits, including full-time job. In other words, the owner operator is no longer an independent contractor, a partner of the company, but one of the employees.
Law AB 5 was passed in 2019, his author is Lauren Gonzalez (San Diego State). The law was approved by Gov. Gavin Newsom.
It states that independent contractors – tens of thousands of truckers across California – must pass an “ABC” test to be classified as such:
A) The employee is free from the control and management of the employer in connection with the performance of work both under the contract for the performance of work and in fact.
B) The employee performs work that is outside the ordinary activities of the employing organization.
C) The worker is usually engaged in a self-established trade, occupation or business of the same nature as the work performed.
The adoption of the law caused a storm of resentment among the masses. Some drivers said they refuse to work at the ports of Los Angeles, Long Beach, and the Port of Oakland in an act of protest.
The Independent Driver-Owner-Operators Association, a Grain Valley, Missouri trade group that represents small trucking companies and independent drivers, said California does not specify exactly how drivers can comply with the law. This creates confusion for truckers trying to figure out how they can do it.
“AB 5 is so broad that many people in the trucking industry don’t know how to comply,” said Todd Spencer, president of the Independent Driver-Owner-Operators Association.
Some drivers are already willing to move out of state to continue working as companies’ owners.
Matt Schrap, chief executive of the Harbor Trucking Association, a West Coast trucker trade group, said the law would force many drivers to choose between becoming trucking firms or registering as independent businesses and working with trucking brokers to secure cargo.
Some truckers say the AB5 is the latest in a string of regulations in California, including new emission limits set to go into effect January 1, 2023, making it harder for them to work.