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.”