After Assembly Bill 5 was passed in California last September, many owner-operators, or OOs, were outraged. The law was designed to make a clear distinction between independent contractors and employees,with strict requirements for companies that wish to count workers as independent contractors.
By counting more workers as employees,these people would be owed benefits, such as paid sick leave,workers’ comp, and more. In theory, the law should have strengthened the power of workers, but the law didn’t take into consideration the unique situation of owner-operators.
One of the requirements of the law was that independent contractors must perform work “outside the usual course of business.” For trucking companies hiring owner-operator truck drivers, this doesn’t fit. Obviously, trucking is the business, but owner-operators are not the same as company drivers.
Many owner-operators feared they would have to leave the state entirely. Fortunately, it looks like drivers that stayed may be able to conduct business as usual.
The Aftermath of Assembly Bill 5
By the end of November, the California Trucking Association had filed a lawsuit in an attempt to exempt truckers from the bill, or AB5. However, one month later Uber, Postmates, and other freelance platforms filed their own lawsuit against the bill on the grounds that AB5 violates constitutional guarantees due to “targeting specific workers and companies”.
Because owner-operators were caught up in the law, it might be difficult for the gig economy giants to prove that they were specifically targeted. Nonetheless, as of December 31st, a federal judge put a temporary hold on AB5.
But this does not mean the bill is dead.
Roger Benitez, U.S. District Judge in San Diego, put AB5 on hold until an official hearing is held on January 13th. Depending on the outcome, AB5 may undergo any of the following changes:
- No changes.
- Bill is completely terminated.
- Biill is revised, and possibly owner-operators will be spared its effects.
According to Benitez, “Having considered the parties’ arguments set forth in Plaintiffs’ supporting papers, as well as Defendants’ opposition papers, the Court finds that Plaintiffs’ requested temporary restraining order is warranted”.
What This Means For Truckers
If AB5 is given the all clear on the 13th, owner-operators in California are back to square one. They will need to move business out of the state or find a way to negotiate with trucking companies on how to conduct business. That said, if AB5 is terminated, California will likely try to come up with a new plan to ensure workers in the gig economy and others are granted their rights.