More than 70% of truckers serving some of the country’s largest ports — including Los Angeles, Long Beach and Oakland — are owner-operators, and AB5 will govern their relationships with carriers, b…
By Augusta Saraiva and Ngai Yeung | Bloomberg
California truck owner-operators must now comply with AB5 after the Supreme Court on June 30 refused to review a case challenging the legislation that sets out the tests for employment-status classification.The California Trucking Association, which brought that challenge, estimates the law may push thousands of independent truckers off the road while they take the necessary steps to comply with the new regulations.
The law comes into effect for truckers in the busiest months of the year as retailers stock up on back-to-school and holiday goods. At the same time, dockworkers and railroad workers are currently negotiating contracts with their respective employers. Additional transportation snarls would only worsen pandemic-era supply-chain chaos and add to inflationary pressures, threatening to slow economic growth.
Given the ambiguity on how AB5 will play out, it may force carriers to immediately downsize their contracted owner-operator fleets, or hire former owner-operators as company drivers effective July 7, said Kevin McMaster, vice president of carrier sales at Encinitas, California-based Flock Freight. But these companies won exemption, along with other professionals, including musicians, freelance writers and architects.
“They’ve known for the last two and a half years that it was equally possible that this injunction would not hold. This is not a shock.”Still, some see in the law an opportunity to address longstanding pitfalls within the industry.
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