AB5. Will it be enforced? What do you think?

On the national level the ATA will be fighting it along with everyone else because it would kill their member’s L/P business model.

 

I don’t know how long it will take. But check out the links I posted. I use them to keep track of the bills and the CTA lawsuit.

Again and again, AB5 is in effect in CA. Trucking industry is TEMPORARY EXEMPT because of the CTA lawsuit. Now that the case is still at the 9 Circuit. The Teamster is still trying to get the court to enforce AB5. Check out CTA website for timeline.

I’m not promoting anything, nor encouraging anyone to join a anyone. I’m just tracking information from the starters.

 

In my opinion, I’m hoping that it not only is enforced but that it goes national.

I feel that all independent contractor’s should have to abide and follow the same FMCSA regulations as a carrier with their own authority. Thus if a carrier leases a truck to a driver and classifies that lease operator as an independent contractor (not an employee of said carrier) then that driver should have to obtain his/her own operating authority and be subjected to the FMCSA regulations all carriers must follow.

This would eliminate carriers misclassifying employees as independent contractors. I would not hire a plumber who is not licensed as a plumber even if said plumber is classified as an independent contractor by a plumbing company.

Just my opinion. But I stand by my opinion.

 

A lease purchase program from a carrier who then basically controls the person’s paycheck by how they hand out the freight is quite a bit different than someone like myself who owns their truck and trailer but is leased to a carrier using their authority but let them know when we’re available for work instead of them telling you when you have to work.

I could do the exact same thing I’m doing now with my own authority but it’s more cost effective for me to be leased to a carrier.

The IRS already has regulations about how to classify an employee so I don’t see how changing the rules will fix the rules that aren’t enforced now.

 

Who’s paycheck? The carrier or the independent contractor’s paycheck?

Carrier’s don’t like AB5 because it eliminates a guaranteed revenue stream. If the independent contractor is a motor carrier authorized by the FMCSA to operate as such, the independent contractor would have no need to pay a carrier to use their insurance, their authority, etc. The independent contractor on the other hand can now truly demand market rates for the loads they haul. So, the independent contractor stands to make out better while the carrier’s against AB5 stand to lose a whole lot of money.

Just to give an example, say a carrier has 600 IC’s, each using said carrier’s authority, insurance, plates, etc. For the honor of such, the carrier charges the independent contractor $300 a week. That’s $180,000 every week to the carrier. In one year, that’s $9.4 million dollars. The pockets AB5 is hurting is the carrier’s with massive IC’s on its payroll.

 

Are you talking lease purchase guys? Or owners leased to a motor carrier? I’m not following your logic. AB5 would do away with lease purchase programs, which the megas would just replace with employee drivers because they already have all the trucks and many people doing a lease purchase don’t have the means to purchase a truck outright so they’d remain company drivers. Guys like me who own our equipment would just get our authority, pay extra money for insurance that we’re not paying now, and just keep doing what we’re doing because the carrier we’re leased to is also set up as a broker. Rates would remain the same because the stuff would still be getting hauled like normal.

 

A true independent contractor is free to work for whomever they so please, not being forced to stay with one carrier.

I’m not against you. Do as you please. But just as you said, the IRS has clear definition of what an independent contractor is. Most lease programs run by carrier’s are in direct violation of IRS regulations. The proof is that most lease operators are not motor carrier’s themselves. They cannot just take their trucks and work for whomever they want. They aren’t authorized by the FMCSA. So, how can you be legally an independent contractor if you aren’t authorized by the FMCSA to operate as a motor carrier? If I own a truck and lease it to a company, that doesn’t make me an independent contractor. That’s not within the definition of what the IRS classifies as an independent contractor.

An independent contractor By IRS definition is hiring a person/company to do a specific job. The company/person that hires an independent contractor has no control over that independent contractor. That independent contractor is free to seek additional work elsewhere and is able to hire employees to assist in doing the job. That’s freedom from control over the IC. This is what AB5 is about.

 

Hope you washed your hands after handling those numbers, because you pulled them out of a very smelly place.