If you follow the news at all, you’ve probably seen headlines discussing the “gig” economy and the passage of California’s new law, AB5.
AB5 is a piece of state legislation, but it might have far-reaching impacts on the trucking industry as a whole. In addition, some experts believe other states will use California as an example and implement similar legislation of their own.
What is AB5?
The “Employees and Independent Contractors Bill,” or AB5, passed the California Senate on September 10. The legislation is designed to provide “gig” workers, such as Uber and Lyft drivers, with access to better pay and benefits. However, the current legislation doesn’t feature a caveat amendment for freight-hauling owner-operators. If California Governor Gavin Newsom signs the bill as it stands into law, it will effectively outlaw two separate trucking companies from working together.
What portion of AB5 causes this problem?
AB5 codifies certain provisions of a 2018 California State Supreme Court Decision known as the “ABC test.” The “B” portion of the test is what’s causing problems for the trucking industry. Under the current law, “a trucking company could not hire an independent owner-operator or a driver on lease and consider them a contractor.”
This new law could have huge implications for independent truckers and owner-operators. Dozens of companies in agriculture and retail could potentially go out off business or be forced to operate in a different state.
What can be done?
Currently, industry experts say Governor Newsom will likely sign the bill. However, The Western States Trucking Association (WSTA) is asking its members to contact the governor’s office and ask him to reconsider. If you’re interested in sharing your opinion, you have until October 13, 2019.
