As the nation endures an ongoing supply chain crisis, the situation has become much direr thanks to a disastrous California law.
As the nation endures an ongoing supply chain crisis, the situation has become much direr thanks to AB 5, a disastrous California law that upends the “owner-operator” model that is responsible for a significant portion of the state’s trucking.
As the Chamber has said on numerous occasions, since the state legislature passed AB 5 in 2019, this law will turn the state’s business community on its head and wreak havoc by reclassifying millions of independent contractors as employees. The ill-conceived legislation followed the state supreme court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which redefined the standard for determining whether an individual may be classified as an independent contractor. AB 5 codified that standard in state law.
In short, the new standard makes it much harder for businesses to classify an individual as an independent contractor, leaving businesses either to assume all the liability associated with an employer-employee relationship or to stop using the services of independent contractors who do not meet AB 5’s test.
The impact on the trucking industry is especially profound, putting many truck drivers into disarray and potentially removing thousands of these drivers from the road. The result has been widespread turmoil and legal challenges to the new law.
One challenge came from...
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