Under the California Assembly Bill 5, which was passed into law in 2019 and is also known as the “gig worker bill”, businesses hiring independent contractors are now required to use a strict three-pronged test to prove independent status or reclassify them as employees.
What Does California AB5 Mean For the Trucking Industry?
The California Trucking Association recently filed a petition stating that the California Assembly Bill 5 violates the Federal Aviation Administration Authorization Act by blocking states from regulating routes, services of motor carriers, or prices. Currently, there is a preliminary injunction granted by the U.S. Southern District Court of California stopping the enforcement of this law.
On the positive side, this law may benefit truckers by giving them more legal rights were they to be classified as employees versus independent contractors. Under AB5, truckers could see more stable hours, healthcare benefits, and compensation for time spent loading and unloading trucks, which currently goes unpaid.
The trucking industry continues to work toward solutions regarding California Assembly Bill 5. One compromise involves using a two-check system, meaning the driver is considered an employee of the carrier and also agrees to rent his equipment to the carrier. This system is not new, and does come with its own limitations, but is being revisited as a creative solution to AB5.