California’s controversial AB5 took effect at the stroke of midnight on January 1st. The law was meant as a crackdown on gig-economy employers like Uber to ensure that workers get employee rights. Owner-operators would have been – and still might be – collateral damage of the law, but a judge issued a temporary hold on enforcement for truckers.
California Assembly Bill 5 puts a strict “ABC” test on independent contractors. If a job fails to meet any of the three requirements, a worker performing that job must be categorized as an employee and not an independent contractor.
The three requirements are:
- That the worker is free from control and direction of the hiring entity
- That the worker performs work that is outside of the core business of the hiring entity
- That the worker engages in “an independently established trade, occupation or business.”
Multiple lawsuits have been filed against AB5 since it was passed, including one by the California Trucking Association. Among the arguments that CTA is making to challenge the law is that it is overruled by the U.S. Constitution, by the Federal Motor Carrier Safety Act, and by the Federal Aviation Administration Authorization Act of 1994.
On Christmas eve, CTA asked for a temporary restraining order on the enforcement of AB5 in regards to trucking. That request was granted on New Year’s Eve. Owner-Operators will have at least until January 13th when the court will make a ruling on a previously filed preliminary injunction.
“AB 5 threatens the livelihood of more than 70,000 independent truckers,” CTA CEO Shawn Yadon told Heavy Duty Trucking. “The bill wrongfully restricts their ability to provide services as owner-operators and, therefore, runs afoul of federal law.”
Source: truckinginfo, truckinginfo, overdrive, freightwaves
Know who you are voting for, or suffer the consequences.
Well put sir!!!!! That’s right in so many ways!
Too much too little too late. My company paid for our independent contractors to relocate out of this state. I saw a caravan of truckers leaving. They had signs on their trucks saying “good riddance California.” Don’t blame them a bit.
Truckers have shafted on every side for years. I have been a trucker. I am not against wanting to be an O/O but I think that drivers are still being screwed. Why do people want to work so much for so little even as an O/O? What good does it do to make lots if money and have no time to relax and enjoy it? I would rather work 40 hrs and have the weekends off and relax….that is in fact better for one’s health…scientifically proven.
Trucking has been absorbed into the 3rd world due to asinine regulations and unrealistic “compliance.”
The balance has given birth to the endless work week and the time off indebtedness.
Driver shortage is code for ,here comes another bus load of cheap foreign labor.
You used to be able to make a few bucks out here and live pretty good. But we are to the point now, that to make a living as an owner operator you need to darn near live in the truck full time. Everyone I know is struggling, or like I said, living full time in the truck and only taking a day off every few months, or longer. And those days are usually spent working on the truck!
It is the expenses, Insurance rates are set to go through the roof, I already parked my own operating authority due to the insurance rates. I can no longer afford to operate on such tight margins. Throw in the cost of fuel, and I do have a very good fuel discount card, the cost of supplies, service on the truck, maintenance, etc., and it is honestly just not worth it.
It used to be you would get a string of good paying months, now you are lucky to get two weeks in a row… Realistically, you get one bad week and then a good one, which keeps you out here even longer to try and make up for the bad, problem is, that rarely happens.
Then the equipment, you need to get to the house on a regular basis to keep up on it. You cannot depend on a shop, they will simply drain your wallet and take an easy repair and complicate it to the point of insanity.
And just getting home, and I don’t care if you are regional or OTR, you need to get home, but you cannot just drop everything and head there at the drop of a hat. I mean you can if you want, but is that a smart move financially? I am weighing that right now sitting here in this truck stop. I am ready to go home, been near a month out here, and I am simply chasing my tail.
I am to the point of parking the truck, I have applied elsewhere for work, just waiting for the phone call and the truck is going in storage, and sadly up for sale. This is just no longer worth it.
You know the American trucking industry will make a slave out of you (or whoever), and if you don’t like it, you can take your truck somewhere else!
We the o/o are a dieing breed the insurance company big companies like uber fright our taking us out one buy !@
Small players in this industry have been the victims of larger players for a very long time.
If the terms of either your contract/s to haul freight, or your contract/s to finance or lease equipment, limits your freedom to haul freight for whomever you choose, then you are neither self-employed nor in business. You are (at best) an employee, or possibly an indentured servant. If you have your own operating authority, and you are free to pull freight for whoever you choose, then this law was never meant to apply to you. But if your lease requires you to stay with under the operating authority of a specific carrier or group of carriers, or demands that you meet practically impossible terms in order to haul freight for someone else, then this is law designed to protect people like you from the overwhelmingly common predatory business practices of the much bigger players in this industry that are probably already victimizing you on a regular basis.
This is designed to protect the trainees and port drivers, who get classified as independent contractors in order to evade employment law responsibility, workman’s compensation and unemployment insurance liability, to eveade minimum wage law, and to shift equipment, maintenance, and regulatory costs and responsibility onto drivers and away from carriers.These drivers often have no idea what they are getting into, and the recruiting and indoctrination process bears strong similarities to cultism or human trafficking. Real owner-operators pass the ABC test. I would argue that so do most Uber and Lyft drivers, since they have the freedom to turn the app on or off, drive for a different app provider, and none of that affects their car financing…
The point of concern would be the second criterion, that drivers are engaged in the “core business” of the app provider or carrier. This is a matter of interpretation and/or organization. If your core business is logistical management (basically, dispatch), well… that’s not what you are contracting with drivers, to do. Maybe Generic Logistics has a standing contract with Generic Trucking for most of it’s road transportation needs, and Generic Trucking employs W-2 drivers. This allows Generic Logistics to hire That Guy Trucking, as an independent contractor, when Generic Trucking is not the most desirable solution for Generic Logistics’ road transportation needs.
Next, Generic Trucking employs drivers through Generic Driver Management, and leases it’s rolling stock from Generic Equipment Leasing, to insulate assets, freight contracts and revenues from legal liability (lawsuits). And finally, Generic Driver Training trains/indoctrinates drivers, and Generic Driver Management pays the tuition for any driver from Generic Driver Training who stays with them for at least a year. Generic Leasing offers the same to anyone completing at least a one year lease. The lease terms require prohibitive financial disclosures in order to run freight for any other logistics manager other than Generic Logistics, and you’re right back to the same old predatory business model as before – only fully justifiable under the new legal framework.
Got my CDL in October of 1963. I’ve seen a lot of changes, a lot of crybabies & wimps that just can’t adjust to anything. I’ve lost count of how many trucks I’ve owned mostly because it don’t pay the bills, so I look forward to what makes a $$$ and yes I’m still trucking after well over 6 million miles but the miles tomorrow is what counts. It’s really easy to make a $ just shut up & take hold of the stirring wheel and don’t look back and put some $$$ in the bank. If I had a Dollar for every crybaby trucker I’ve ever heard I’d be a BILLIONAIRE
Well said Trucker!!
It’s in your blood to do it and love it, or not being smart enough to do anything else in life except hold on to a steering wheel and regretting the job. (That’s the difference between a trucker and a driver.)
I couldn’t have said it better myself very well said
I read the bill ab5 itself instead of relying on the media spin. There is nothing on that bill that says you cannot go out and by a semi truck to be an o/o in California. It does however clarify that for example, if a carrier company gives u a truck, and also controls your dispatch and rate of pay, then you are by definition an employee not to be classed as an contractor. CTA is misrepresenting just to get those “1099’d employees” back.
I’ve got 26+ years in this industry. And my observation is there is no fair way, but in my opinion, California is over reaching.
There were no CDLs in 1963.
I was looking for that comment, LOL! he sounds like a super trucker to me…
Wrong. There was no Federal mandated CDL back then. Most states issued either a Chauffeur`s license or a classified license marked Commercial. I tested for and received my first “Commercial Driver’s License” on my eighteenth birthday in 1972. (Now watch, someone will attack that statement as well)
Keep On Truckin’
From the article above…
“AB 5 threatens the livelihood of more than 70,000 independent truckers,” CTA CEO Shawn Yadon told Heavy Duty Trucking.
Who is screaming the loudest here? Is it the trucker or the trucking company? Time we vacate the old 1933 standards we are all forced to work under and get more up to date on how everyone behind the wheel is treated both economically and how they are regulated.
They keep heaping regulations on the driver, not these companies. We need to go back to regulating the industry like it used to be. No more operating authority just because you filled out a few forms and can suck air through your pie hole. We need strict regulations on who can and will be allowed to operate a trucking company. It should not be easy to obtain operating authority.
And then we need a revamp in pay, trucking used to be one of the highest paying jobs in the country, we need to go back to those days.Yes, regulate it back to the Stone Age, to the days of real regulation, not this BS we get today that only punishes the driver and enriches third party outfits like the ELD manufacturers, the data miners and Sleep Apnea scammers.
This industry needs to go back in time. No more free wheeling on the rates with these brokers and agents, we need transparency, real transparency. We need workable rates, like we used to have out here, rates that pay the bills, pay for the maintenance of the equipment and provides a real wage for the work involved. We need rate standards, if they have to be set by the government so be it. I am not a regulatory hawk, but in the case of trucking, we need regulations where they will help the industry, not destroy it, as that is where we are headed.
You are 100% correct I’m a super trucker. But one thing I don’t think we can be regulated into prosperity. I’m not trying to be mean to anyone. I was here during regulation and I remember folks going broke then also. Do you all remember when some shut down because a $1.00 a gallon was too high for fuel. But some still had to have chrome to keep moving. It was never too high. Now I like chrome but I like staying in business more. Today the problem is brokered loads and truckers that don’t know that the loads they are hauling paid more back when fuel was $.35 a gallon. But if you’re a super trucker like me you will get through it all. It always cycles. Hang on but no matter how strong the urge is please don’t haul for under your cost + some bank money on every load LET someone else have it.
“I’m so glad that the government came and stepped in to regulate us.”
— said NO ONE, …EVER.