AB5 ROLLS ON
We warned you about this piece of legislation a few months ago, and unfortunately, it’s still going strong. Last month, a 9th Circuit Court panel reversed a California Trucking Association injunction that would have exempted truck drivers from this law.
As a quick background, California’s Assembly Bill 5 requires companies to treat independent contractors as full-time employees under most circumstances. As part of its ABC test, the bill requires that contractors can only be hired for services that are outside of a company’s usual course of business.
If your mind immediately went to the owner-operator contract relationship, we’re right there with you. This bill has the potential to completely upend the business model that many truckers and companies have come to rely on. And it would have a dire impact on 70,000 owner operators based out of California.
Our industry isn’t going down without a fight, but we’re still feeling the squeeze. And if AB5 continues to prevail in court battles, it won’t only impact owner operators in California. Other states (looking at you, Massachusetts, New York, and Illinois!) could take it as license to enact their own version of this legislation.
All is not lost. The California Trucking Association is currently filing for a rehearing with the 9th Circuit, and a Supreme Court battle could follow. In the meantime, we’ve got a few NTI- approved recommendations for protecting your owner-operator relationships here, here, and here.
