Some California truckers say a proposal working its way through the Legislature could cause disruptions in the shipping and logistics industry if a deal isn’t reached with lawmakers.
Assembly Bill 5 would codify a new standard for classifying workers as employees, making it harder to hire them as contractors. The trucking industry has evolved to rely on independent truckers to fill gaps in the supply chain and cover specialized jobs. In its current form, AB 5 would require many of those independent truckers to become employees under larger companies.
Assemblywoman Lorena Gonzalez authored the bill and says she is working with industry leaders to find a compromise.
“I think in the end we’re going to come up with an opportunity for truckers to either be employees or truly small businesses,” she said. “But we are not going to give a carveout to an industry that has systematically and continually misclassified workers.”
According to Shawn Yadon, CEO of the California Trucking Association, most of the state’s trucking operations have five or fewer rigs and contract with bigger companies.
“Just imagine if that segment of the industry [did not] have that flexibility to be independent and haul and truck for various parts of the goods movement chain,” he said. “It has that type of a dramatic impact on the industry — and really on the economy.”
Yadon says that could disrupt the supply chain and impact the price and availability of consumer goods.
Truckers have made their voices — and big rigs — heard. Many have testified at committee hearings, and last week a group drove around the Capitol, sounding their horns to protest the bill.
Yadon says the association was not involved in organizing the noisy protest.
Gonzalez has criticized the industry’s history of misclassifying workers, claiming “trucking companies have done everything to avoid treating employees as employees.”
But she has signaled that a deal is being negotiated. It would likely require truckers to go through the process of starting an independent business in order to contract with larger trucking companies.
The legislation could codify a 2018 California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which established a new test for classifying workers.
And truckers aren’t the only ones clamoring for an exemption as the end of session nears. Health care workers, like psychologists, and franchise business owners are petitioning for a exemption.
Hair stylists, lawyers, dentists and freelance writers are some of the occupations that already secured exemptions.
Meanwhile, Gonzalez says there will be no deal in the bill for gig companies like Uber and Lyft. The two companies have an estimated 220,000 drivers in California, who are currently classified as contractors.
Gig companies argue the flexibility of contractors is essential to their platforms. They have proposed a third classification of worker — something with the flexibility of a contractor that guarantees certain benefits and protections — but so far have not secured a compromise with lawmakers and labor unions.