Legislating the Future of the Independent Trucking Contractor

The country’s gig economy is closely watching California’s Assembly Bill 5 (AB 5), effective January 1, 2020, as it restricts certain industries from utilizing independent contractors, like truckers.  The new law is intended to protect gig workers by providing them employee benefits.  However, not everyone, including the California Trucking Association (CTA), is seeing this as something positive.

Let’s take a look at the AB 5 timeline:

  • December 3, 2018 - AB 5 was introduced.  Responsibility now falls on employers to show that a worker is properly classified as an independent contractor.

  • September 18, 2019 - AB 5 was signed into law by CA Governor Gavin Newsom and approved by the CA State Senate.

  • November 12, 2019 - The California Trucking Association filed a lawsuit challenging the ruling and seeking an exemption from AB 5, before the law took effect, to protect the independent contractor status for approximately 70,000 truckers.

  • December 31, 2019 - A U.S. District Court Judge issues a temporary restraining order carving trucking out of AB 5.

  • January 1, 2020 - AB 5 went into effect and restricts certain industries from utilizing independent contractors.

  • January 16, 2020 - The U.S. Southern District Court granted a preliminary injunction for California Trucking Association and independent truckers.

According to the California Trucking Association press release, “This ruling is a significant win for California’s more than 70,000 independent owner-operators and CTA members who have worked as independent truckers for decades, and who have invested hundreds of thousands of dollars to own their own vehicle and comply with California’s strict environmental guidelines and regulations over the years,” said Shawn Yadon, chief executive officer for the CTA.

“With its decision, the U.S. Southern District Court validates our claim that the implementation of the new classification test could have been detrimental to the long-standing and historical place owner-operators have had in the transportation industry,” said Robert R. Roginson, attorney for CTA.

The outcome of this legislation still remains to be seen.  This leaves agents with many questions about employment classification and the proper coverage for their independent trucking contractor clients.  Whether your trucking clients are classified as employees or have independent contractor status, All Risks can help protect them.

Since no two truckers have the same needs, All Risks offers Occupational Accident and Workers' Compensation options that can be customized to meet the size of your client's fleet and budget.  Compare the benefits of each coverage and let’s discuss your client’s options. 

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