What Does AB 5 Mean For Truck Drivers?

Most truck drivers are already aware of the significant supply chain issues affecting the country – and the world. While many of these issues are outside lawmakers’ control, one potential problem could be – and that’s Assembly Bill 5.

What does this law mean for independent truck drivers and their ability to do their job? Learn more about AB 5 and how it affects truck drivers in California below.

What is Assembly Bill 5?

Assembly Bill 5, also commonly referred to as AB 5, was an assembly bill put together by Asm. Lorena Gonzalez and approved by Governor Gavin Newsom.

This bill outlined that independent contractors would have to pass an ABC test to remain classed as independent contractors.

According to the California Trucking Association, the ABC test is as follows:

A: In contract and in fact, the person is free from the control and direction of the hiring identity.

B: The person performs jobs outside the hiring entity business’s usual course.

C: The person is engaged in an independently established occupation, business, or trade, of the same nature as the work performed.

It all seems straightforward, right? Except, according to the California Trucking Association, it’s tough for independent truck drivers to meet those standards. As a result, the enforcement of Assembly Bill 5 might mean that up to 70,000 independent truck drivers will be taken off the road, creating port backlogs and even more issues for the already problematic supply chain.

The main problem lies with point B. If you’re a trucking company that regularly hires independent contractors, you might be unable to do this without classing them as employees since the job is within the business’s usual course.

As a result, once-independent truck drivers might be forced to work for companies rather than themselves as self-employed drivers just to remain in work in California.

How Does The New Bill Affect Truck Drivers?

AB 5 would see many truck drivers unable to work as independent contractors for trucking companies. Instead, they would become employees of the companies they worked for.

For many, this would mean they were eligible for regular pay, salaries, health benefits, work stability, and mandated breaks. Some truck drivers would see this as a win, particularly those struggling to achieve regular work and desirable pay as independent contractors.

However, many truck drivers who have established their own businesses would see this bill as a step in the wrong direction. Instead of being able to take on work that suited their lifestyles and working the hours that suited them the best, they would have to tie themselves to an employer and give up their independence. Otherwise, they would have to make the life-changing decision to leave California.  

Some business owners vowed to take on less work and charge more, and others said they would sell their trucks and exit the industry altogether. Truck drivers also warned that the law would reduce trucking capacity, drive up shipping rates, and worsen COVID-19-impacted freight backups already being experienced in ports.

What Are Truckers Doing About Assembly Bill 5?

Independent truck drivers aren’t taking AB 5 lying down, but they aren’t having much luck getting through to the powers at be. The California Trucking Association challenged AB 5 in court, but the Supreme Court refused to review the lawsuit. Many truck drivers are now holding protests in the hopes of having truck drivers excluded from the new law.

However, not everyone is against AB 5. The International Brotherhood of Teamster labor union said that AB 5 is about protecting truckers, stating that truck drivers have been deprived for several years because trucking companies class them as independent contractors.

How Will AB 5 Impact Business Owners?

It’s not just independent truck drivers being impacted by AB 5. Business owners will be, too. Any business owner in California who hires independent drivers or contractors to move or deliver goods might be affected.

They might have to outsource their freight to a logistics company or consider hiring a truck driver as an employee, which can come at a high cost. Failure to comply with the new law could also mean they face lawsuits and fines.

Ready to Exit the Trucking Industry? TruckVin Can Help

If AB 5 goes full steam ahead without exemptions for the trucking industry, truck drivers might decide to exit this line of work in their droves. Are you ready to sell your truck? Talk to the expert buy team at TruckVin to learn how America’s foremost truck buyer can provide you with a fast, fair offer.

TruckVin is America’s Foremost Truck Buyer! As a trusted partner to thousands of fleets across the nation, you can rest assured we’re professionals when it comes time to divest your assets.

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