The bill that California Senators just approved called ‘AB5’ is set to swiftly put tens of thousands of independent truck drivers out of business by the end of 2019.

Indeed, this legislation that has just passed the Senate has thrown a wrench in the well-oiled economic trucking engine of the sunshine state.

What initially sounded like a good-intentioned law designed to protect under-paid workers in the ‘gig’ economy has unwittingly imposed severe and irreconcilable consequences on a whole state of independent truckers.

You see, the “Employees and Independent Contractors” bill, called AB5, which passed the Senate on September 10, 2019 is written to protect workers with ridesharing companies like Uber and Lyft from the exploitation of being denied certain wage and healthcare benefits.

The new law determines whether a worker is a contractor or an employee.

All companies in California must use the ‘ABC test’ to determine if each worker is an employee. A worker can only be an independent contractor if they do not fall into any of the three conditions:

  1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
  2. The worker performs work that is outside the usual course of the hiring entity’s business.
  3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

While the law is intended to protect and benefit workers, the reaction from the trucking industry is anything but obliging.

The law makes it practically impossible for companies to contract work to independent truck drivers.

This means that 70,000 independent truckers, most of whom are minority, are being shut down. This is due to the fact that this Senate bill failed to include a carve-out to protect these workers.

Classic case of throwing the baby out with the bathwater.

Whether these independent truckers have recently jumped into the trucking industry, been in it for a decade or 20 years plus, truckers feel that this law targets them unfairly.

In fact, according to a FreightWaves article on the topic, “Some owner-operators who live in California said they are being told to move out of the state, get their own authority, which can be costly, or transition to company drivers, in some cases.”

On the ground, some independent truckers are having to make the hard decision to up and move out-of-state in order to continue working for a company they are happy working for, even if that means leaving kids, parents, siblings and their community behind.

In another article by FreightWaves, Michael Lotito, co-chair of think tank Littler Workplace Policy Institute, said the disruptions to the California economy “are likely to be massive as a result of AB5.”

“AB5 is the most radical reformation of the employer/employee relationship in history,” Lotito told FreightWaves.

CFF President Matt Manero breaks down AB5 and lays out the implications to the trucking industry. Watch the latest Monday Transportation in Minutes Now!

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