2019 was filled with ups and downs for the trucking industry. One downfall that has consumed the minds of independent truck drivers and companies in California was the passing of Assembly Bill 5.
This bill places into law an independent contractor test known as the “ABC” test. In order to be considered an independent contractor, a worker must satisfy all 3 parts of the test:
A. That 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.
B. That the worker performs work that is outside the usual course of the hiring entity’s business.
C. That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Carriers, brokers, and even shippers will have to demonstrate that their business arrangements satisfy all 3 parts of the “ABC” test.
FreightWaves explains it as, “A trucking company hiring a truck driver who is independent would not meet that test of independence. A trucking company hiring a cleaning company to tend to its headquarters would meet it.”
Essentially, this bill is putting over 70,000 independent owner-operators at risk of losing their jobs.
After much apprehension over the passing of Assembly Bill 5 in May of 2019, the concerns of truck drivers and transportation companies have been heard. The California Trucking Association had filed a lawsuit in November of 2019 seeking an exemption from AB5.
U.S. District Judge Roger Benitez in San Diego granted a five-page order sought by the California Trucking Association while he considers imposing a permanent injunction.
The ruling implies that under the tenets of AB5, a truck driver would never be considered an independent owner-operator. “Because contrary to Prong B, drivers perform work within the usual course of the motor carrier hiring entity’s business, drivers will never be considered independent contractors under California law,” Judge Benitez wrote.
The hearing is set for January 13th, 2020.