Industry says it’s ‘pouring gasoline’ on supply chain crisis
Tens of thousands of independent California truck owner-operators could be out of business soon under a new statewide worker classification law designating them as employees.
On June 30, the U.S. Supreme Court denied a review on whether California Assembly Bill 5 (AB-5) violates the Federal Aviation Administration Authorization Act of 1994 as it applies to self-employed truck drivers.
“Gasoline has been poured on the fire that is our ongoing supply chain crisis,” the California Trucking Association (CTA) wrote in a June 30 response to the high court’s decision regarding the association’s legal challenge to the bill.
“In addition to the direct impact on California’s 70,000 owner-operators—who have seven days to cease long-standing independent businesses—the impact of taking tens of thousands of truck drivers off the road will have devastating repercussions on an already fragile supply chain, increasing costs and worsening runaway inflation,” the association added.
“We are disappointed the court does not recognize the irrevocable damage eliminating independent truckers will have on interstate commerce and communities across the state.
“The legislature and [Gavin] Newsom administration must immediately take action to avoid worsening the supply chain crisis and inflation.”
The California State Assembly adopted AB-5 in September 2019, sparking CTA’s legal challenge and the Supreme Court’s latest decision.
The bill’s primary sponsor was Lorena Gonzalez (D), a union leader and former Assembly member.
Under AB-5, a self-employed commercial truck owner must satisfy a three-part test to be considered an independent contractor, with exceptions for construction trucking services.
The bill adds that existing law “creates a presumption that a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits arising under wage orders issued by the Industrial Welfare Commission.”
Existing law defines employees for purposes that include “any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee.”
By Allan Stein
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