Truck drivers are facing uncertainty regarding how AB5 will affect them after the U.S. Supreme Court declined to hear a case challenging the law. Owner-operators and independent drivers are urged to contact their state officials and ask for clarifications on how AB5 will be enforced. In a letter to Gov. Gavin Newsom, the Owner-Operator Independent Drivers Association explains why it opposes AB5 and asks for more time to study the law.
Although AB5 applies only to full-time truck drivers, some independent contractors are exempt. These drivers must still take the Borello test and must pay their own payroll taxes. Owner-operators are more expensive than independent contractors and cannot afford the costs of full-time employee benefits. AB5 can limit the entrepreneurial dreams of owner-operators and make it difficult for them to get back their equipment investment. Additionally, some truck drivers may not want to become employees. AB5 may affect other states and even federally.
While AB5 does not reclassify owner-operators as independent contractors, it does stipulate a minimum wage and other benefits. The lawsuit is being pursued by the California Trucking Association. However, it is likely that AB5 will still be enacted in trucking. A driver staffing company like Centerline Drivers can take care of hiring and firing gig drivers, removing the risk of misclassifying drivers.
What is AB5 in Trucking?
In 2016, the California state legislature passed AB5, a bill that sought to define independent contractors as “owners and operators of commercial vehicles.” However, it was challenged by several businesses and organizations that rely on independent contractors, such as Uber, Lyft, and the CTA. They argued that AB5 violates the federal Aviation Administration Authorization Act and is therefore invalid. However, the Supreme Court declined to review that decision, and remanded the case to the 9th U.S. Circuit Court of Appeals. In 2017, AB5 was upheld by a panel of three judges, which meant that the federal law supersedes the state law.
In the trucking industry, AB5 could have deep consequences. For one thing, it could split the owner-operator labor pool into two distinct labor pools, with the majority of Californian drivers falling under the former category. The same law could result in the fragmentation of the trucking industry in other states, or even federal regulation could adopt an ABC test similar to the one in California. But it’s not the end of the world.
Who is Affected by AB5 Law?
The AB5 law has many implications for contract workers, and it’s unclear exactly who will be affected by it. In some cases, the law even allows contract workers to become employees. Many exempt workers are doctors, dentists, accountants, real estate agents, securities brokers, hair stylists, and creative professionals. Even if a contractor does become an employee, AB5 gives them several rights and benefits.
AB5 has a significant impact on California businesses. In California, almost 8% of all workers are signed as independent contractors. This increased number is a result of the Dynamex case, which sided with the independent contractor. In addition to increased hiring costs, AB5 requires businesses to pay higher wages and overtime costs. Additionally, AB5 requires businesses to pay half of their employees’ Social Security tax.
Uber and Lyft, two popular ride-sharing companies, failed to receive exemption from AB5 and are already losing money. They are donating $30 million to an effort to overturn AB5. In New York, some companies are considering a similar law, as well. While this bill isn’t yet final, there are a number of groups that are working to make it a reality.
Who is Exempt From California AB5?
There are many types of businesses affected by California AB5. Generally, workers are assumed to be employees unless they pass the ABC test. However, certain types of businesses are exempt. These businesses include freelance writers, translators, and appraisers. There is still a lot of confusion about who is exempt from the law. The good news is that the law is being tweaked and interpreted every day. Read on to learn more.
Proposition 22 was supported by companies such as Lyft and Uber. It passed with 58% of the vote, which would have made Uber and Lyft app-based drivers contractors rather than employees. However, the legislation does not explicitly say if those companies are exempt from California AB5.
Assembly Bill 5 (AB5) became effective in California on January 1, 2020. It added 15 industries to the list of workers that could be considered independent contractors. It also changed the ABC test for determining worker classification. The new law, Assembly Bill 2257, is a tweaked version of AB 5, which still includes the ABC test. Most companies are exempt from the new law, but there are still some industries where AB 5 may have significant implications.
How Will AB5 Affect Independent Contractors?
While AB5 will affect many independent contractors, there are some industries that will be unaffected. For example, truckers are a large group of independent contractors. ATBS reports that truckers may find it harder to go out on their own. The Outline reports that some truckers have lost their jobs due to the new nature of their work. If this is the case, trucking workers should prepare to change the way they operate.
AB5 will have a significant impact on independent contractors and freelancers in California. While it exempts many large businesses from reclassifying their workers as employees, the newest law may reduce the amount of flexibility that contract workers have. The new law will require employers to pay half of their employees’ Social Security taxes by 2020. In addition, California will have stricter rules governing the way independent contractors are classified in the state.
AB5 will go into effect on January 1, 2020. It will also apply retroactively to some existing California Wage Orders. Although many people believe that AB5 will target the Gig Economy, it has far-reaching effects that will affect all independent contractors. Businesses must be aware of the implications of AB5.
Why are Truckers Striking in California?
Why are truck drivers striking in California? They are protesting Assembly Bill 5, a law that would make it more difficult for businesses to classify their independent contractors as employees. In the past, the industry has fought against the legislation, but the new law will make it harder for companies to do so. As a result, more trucks will be stranded in the desert or on the side of the road, while some truckers will continue to work.
Protesters say the new law will force truckers into full-time employment and make it impossible for them to continue their independent work. They also claim that costs for new permits and insurance will skyrocket. They want to meet with Governor Gavin Newsom and Attorney General Kamala Harris to discuss the new law. The unions are calling for negotiations with the governor. But there is no immediate solution.
Is Trucking Exempt From AB5?
AB5 or “gig worker” law has affected truckers in California, but many in the industry are wondering if it applies to the industry in general. The law restricts employers from classifying their workers as independent contractors, a legal status that is favorable for truckers. Many truckers operate as independent owners-operators and have more flexibility in scheduling. Additionally, independent owners-operators are often small-business owners who make money by driving trucks.
The ABC test has several exceptions. Independent contractors that lease their services are known as “1099 employees,” while those who are fully-time employees receive W-2 forms. Some truck drivers are independent contractors, while others operate under the authority of a federal motor carrier leasing company. AB5 exemptions can allow truck drivers to receive freight through their former employer’s brokerage operation. Additionally, companies that operate both freight operations and brokerage operations separately may allow truckers to remain legally employed.
In September, the California Trucking Association filed a lawsuit against AB5. Assemblywoman Lorena Gonzalez, D-San Diego, filed a motion for preliminary injunction, which prevents the state from enforcing AB5 on motor carriers. The state attorney general argued that AB5 is not preempted by the FAAA. In the meantime, the new law has a short-term exemption for drivers in the construction industry. Drivers in that industry can continue to operate as independent truckers during a two-year grace period.
What is the New Trucking Bill?
The new California law makes it harder for trucking companies to classify their drivers as independent contractors and pushes them to treat them like employees. The legislation is aimed at sweepsing up thousands of truckers who either lease their own trucks or own them outright and work as independent contractors while taking advantage of their employer’s insurance and permit discounts. In California alone, there are some 70,000 independent truck drivers hauling goods to the big ports.
The new bill does not include funding for truck parking, a measure that has long been sought by groups like OOIDA. It does not include a controversial increase in motor carrier insurance minimums. The bill does not allocate funding for truck parking, and it did not call for an increase in the insurance minimum for commercial trucks. It also doesn’t increase minimum insurance requirements, but it does mandate that new trucks have automatic emergency braking.
Learn More Here:
3.) Best Trucks