Written by: Rob Dissman, Principal of Pyramid Logistics
California AB5 is back in the news as an update sparks interest for a potential immediate course of action. The last time we covered this law in November 2021, we reported that a Supreme Court petition was created by the California Trucking Association (CTA) and was pending review from the Solicitor General. See more about what the Solicitor General had to say and what’s next for AB5.
California AB5 in a Flash
Back in 2018, a statute was expanded based on a landmark Supreme Court of California case which impacted the trucking industry. All California trucking businesses were required to hire independent contractors, in this case, truck drivers, to be employees instead of freelance workers. The biggest scrutiny regarding Assembly Bill 5 in California was the three-pronged test, which made it difficult for independent contractors to be hired without being classified as an employee.
Related Article: California AB5: California Trucking Association Petitions Supreme Court
The Trucking Industry and AB5
Most Californian trucking companies hire independent drivers to handle freight deliveries, and this posed a problem for both parties. Trucking companies faced challenges because they had to provide compensation in the form of direct salaries and benefits, and independent contractors faced losing their independence and flexibility. For many, California AB5 seemed to cause more harm than good – a disparate difference from what it was meant to be.
Had it not been for the CTA filing an injunction in November 2021 to temporarily pause the enactment of this law, it would have immediately gone into effect. It was then that the Solicitor General was asked to provide an opinion regarding how to proceed.
Related Article: California AB5: What It Means For Trucking Companies
The Solicitor General’s Opinion
California trucking business owners waited eagerly for the last 6 months to hear the Solicitor Generals’ opinion regarding this law. In May 2022, the answer arrived; however, it was a surprise to the trucking sector that the Solicitor General “urged” the Supreme Court not to review the case, as reported by Freight Waves.
It’s important to note that the court can ignore this opinion. However, if the Supreme Court decides to deny review, then California AB5 is to be enacted immediately. It’s unclear whether a decision will be made before the start of summer, and if not, it may even extend to October.
Only one thing is certain: California trucking companies remain at the edge of their seats until a definitive decision is reached.
About Pyramid Logistics
Find effective specialty transportation services that are responsibly priced, timely, efficient, damage-free, and in conformity with the highest industry standards with Pyramid Logistics. We utilize cutting-edge technology to provide your team with the warehousing capabilities of the future.
Located in Los Angeles, California, and Las Vegas, Nevada, we are equipped to handle a full range of services near our facilities and all over the nation. As the industry continues to go digital, Pyramid Logistics remains at the forefront of warehousing. If you’d like to learn more about partnering with us, click here.