Retroactive AB5 May Harm Business Owners in California

It’s been over a year since Assembly Bill 5 (AB5) was enacted, and business owners are still worried about this law. Several industries were affected by this legislation initially, but some managed to get by through additional laws. For example, AB 2257 and
Proposition 22 helped creative independent workers and gig workers, respectively.

Independent truckers and the trucking industry were also in the clear after a court ruling at the end of 2020. Unfortunately, there are many business owners in California still experiencing hardships because of this law. 

While AB5 may not directly impact trucking at this time, it’s crucial to understand the difficulties local businesses are going through because they all use logistics and transportation services.

What AB5 Means to Business Owners

Assembly Bill 5 required Californian business owners to reclassify independent workers or contractors as employees. This was a blow to both businesses and employees. Owners felt the financial pressure of having to provide new employee benefits and completely modify their business model. Workers would no longer have schedule flexibility and lose the ability to work for themselves. 

The expenses and effort that business owners were forced to undertake were immense. Additionally, some businesses were uncertain about the classification, and this confusion was even more costly as legal action ensued. This crippled businesses trying to stay afloat in a difficult economic climate.

How Retroactive Cases Can Harm Business Owners

AB5 is filled with technicalities and retroactive applications. This means that AB5 can be applied to businesses that weren’t following the legislation since it was enacted. Business owners in California became an easy target for lawsuits, and some had to close the business down for good.

It can be exhausting to battle a lawsuit. Not only is it expensive to pay for the resources, but it takes time and effort. This is not an easy task during an economic downturn when you are concerned about protecting your business and keeping it open. The combination of an unexpected crisis and AB5 has put Californian business owners in a predicament.

We know it can be costly to keep your business open right now, and you may be looking for cost-effective solutions to keep your business going. If you’re a business owner and need to downsize or relocate to reduce expenses, enlist the help of a local logistics company, like Pyramid Logistics.

>>Get a quote to relocate your business today

Related Article: Office Moving Checklist: Relocating With a Logistics Company


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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