The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.
It was recently decided in California that the new gig-economy law will not apply to truck drivers. But is the issue settled or is the fight just beginning?
For context, the conflict began with the 2018 ruling in the case of Dynamex Operations West, Inc. v. Superior Court of Los Angeles. The outcome of that case was the application of a presumption that workers are employees and not independent contractors as they had always been classified.
Dynamex is a same-day courier service that switched to an all-independent contracting model for its drivers in 2004 in order to cut labor costs. In 2015, an independent contractor who had worked with Dynamex, Charles Lee, filed a class-action lawsuit against the courier service claiming the company misclassified their drivers as independent contractors. This classification, claimed Lee, allowed the company to violate the transportation-specific IWC State Wage Order 9.
In response to perceived abuse of gig workers, California legislators drafted AB-5, a bill that pushes companies to classify their workers as employees instead of independent contractors. Companies like Uber and Lyft built their companies by having few employees and many contractors, which saves them as much as 30% in labor costs. But while the bill was touted by lawmakers as a way to protect middle class workers, truckers responded with protests.
The trial meandered through a number of legal case precedents, some of them going back to the child labor laws instituted at the turn of the 20th century. Ultimately, it was decided that an ABC Test would be used to prove that a worker is an independent contractor and against the existing assumption that they are an employee.
The criteria of the ABC Test are: (a) the worker is not controlled or directed by the hiring entity in terms of the work; (b) the work done by the contractor is outside the hiring entity’s scope of business; and (c) the worker is regularly and independently engaged in the type of work he or she is performing.
A contributing ambiguity which continues to fuel the battle is “part b” of the ABC Test. Since independently contracted truckers are doing the same type of work as the hiring company, they can’t quite count as independent contractors. This is an anathema to motor carriers that have long relied on such a model to cut costs, even if they no longer have to pay for rest breaks.
The California Trucking Association, the Western States Trucking Association, and a few motor carriers took their case to the California Supreme Court in an attempt to show that federal motor carrier laws make the Dynamex ruling totally inapplicable to the trucking industry. Among them is a 1994 federal law that prevents any state from creating laws that restrict a motor carrier’s prices, services and routes.
But proponents of AB-5, like its author Assemblywoman Lorena Gonzalez, accuse the trucking industry of a longstanding practice of misclassifying workers to the disadvantage of truckers. Her suggestion is to funnel truckers into two different status options – employees or small business owners.
AB-5 did carve out exceptions to the rule and groups such as the Chamber of Commerce wanted to broaden those exceptions to include trucker drivers. Supporters of these exceptions say that the ABC test will remove a sizable majority of independent contractors in California, and hinder the Golden State’s leadership in the national innovation economy.
The CEO of the California Trucking Association has predicted that removing the flexibility to be independent contractors could create disruptions in the trucking industry and adversely affect the price of goods. And truckers themselves do not seem in favor of the bill, gathering in Sacramento during the summer to ride around the capital and sound their horns in disapproval.
Other states are in the process of emulating California. To put this in perspective, there are 500,000 truck drivers in the United States that are independent contractors.
Noble1
How about the Progressive Era ?
What was that all about ?
Allow me to quote :
“The main objectives of the Progressive movement were addressing problems caused by industrialization, urbanization, immigration, and political corruption.
The movement primarily targeted political machines and their bosses. By taking down these corrupt representatives in office, a further means of direct democracy would be established.
They also sought regulation of monopolies (trustbusting) and corporations through antitrust laws, which were seen as a way to promote equal competition for the advantage of legitimate competitors.
Did it work ? Or are we facing similar situations today ? Trustbusting ??? LOL !
How about prohibiting alcohol ? What did that give rise to ? Organized crime !
While many of you dislike Canadians , Canadians supplied you with booze back then ! Canadians didn’t discriminate, LOL !
Quote:
“In late 1917, Congress passed the Eighteenth Amendment; it was ratified in 1919 and took effect in January 1920. It prohibited the manufacturing, sale or transport of intoxicating beverages within the United States, as well as import and export. ”
The Eighteenth Amendment was repealed in 1933, with the passage of the Twenty-First Amendment, thanks to a well-organized repeal campaign led by Catholics (who stressed personal liberty) and businessmen (who stressed the lost tax revenue).”
What congress should do since they’re good at ratifying is RATIFY THE FAAAA ! Then perhaps truck drivers can have a similar wage structure created as the one in the construction trade . Try doing that now and your friendly “carriers” through their associations will CRY FAAAA preemption !
So until then we have to become a little more creative . By uniting we can expunge those who are preventing wage progression . In doing so not only will we increase truck driver wages for those who unite , we’ll also be receptive to those who want to “lease on” due to their unwillingness to really be independent by allowing them to haul for us , LOL ! You can ride on our coattail for less than if you were united among us . (wink)
Then we would all be happy , no ? Truck drivers united get what they want and more , and you so called O/O’s get what you want , to be “independent” . You get to ride on our coattail as ” independents ” , LOL !
You got that truck drivers ? The O/O’s won’t be our equal united partners , they will be our underlings because O/O’s like “My Own Boss” insist on being “free and independent” , LOL !
In my humble opinion ………..
Noble1
Look up Robert Owen
This man had tremendous influence on creating what most don’t even realize about where the eight hour day , 40 hours a week came from .
Do you know the origin of “Labour Day” ?
The Haymarket tragedy came at a tremendous cost to the Noble and Holy Order of the Knights of Labor due to a bombing in a labour demonstration advocating for the 8 hour work day .
Look up Haymarket affair/Haymarket Riot
If it were not for labour unions and people such as Robert Owen back then , most would still be overworked like most truck drivers currently are in the trucking industry .
Anyways ,
Quote :
“On the first anniversary of the event, May 4, 1887, the New-York Tribune published an interview with Senator Leland Stanford, in which he addressed the consensus that “the conflict between capital and labor is intensifying” and articulated the vision advocated by the Knights of Labor for an industrial system of worker-owned co-operatives, another among the strategies pursued to advance the conditions of laborers . The interview was republished as a pamphlet to include the bill Stanford introduced in the Senate to foster co-operatives.”
Now how do you like that ? Apparently I’m not the only one who has and had a similar “vision” . However, not to portray myself as better, “my vision” aka concept is a little more complex in regards to the strategies and the web it incorporates .
Perhaps I was there in another life , LOL ! I came up with the idea(s) way before I ever read this stuff . Obviously there’s a connection , perhaps through a collective consciousness of some sort . Now I’m diverting into an esoteric subject , and I’ll stop it at that .
Quote:
International Workers’ Day
“The date was chosen by a pan-national organization of socialist and communist political parties to commemorate the Haymarket affair, which occurred in Chicago on 4 May 1886 “.
In conclusion : Unions certainly have had their place . However, I would prefer to say the mentality behind it did . It’s a good basic foundation . Uniting to improve one’s conditions . However, the concept needs to be broadened and improved .
In my humble opinion ……….
Noble1
For our friend who tends to believe he’s his own boss due to having “a little say” in how he can conduct himself .
Quote :
“The Teamster Revolt Against the Hoffa Era ”
Unifor the biggest Organized Labour Union in Canada
Quote :
“Unifor president speaks out following Monday arrest”
If you really believe that I’m the sort to follow these sorts of primitive mentalities , then you truly lack good judgement comrade .
The “unification” that I refer to surpasses these cohort regimes by ages . These regimes goes way back to the original concept which has never changed . One was close to doing things a bit differently(Noble and Holy Order of the Knights of Labor with Terence V. Powderly at the helm) but then caved to the striking ways . Trade unions used to be outlawed but then were legalized in 1872. Their origin began in Great Britain . They certainly had an influence on creating positive change for workers which I would be a fool to deny . However, their “methods” are old school . They haven’t improved . Their motto is to put pressure through a labour strike if they don’t obtain their desires . I don’t share that concept . They may be viewed as better than nothing until improved . Then again , take that better than nothing statement with a grain of salt .
My concept is to have employees unite and become a collective business and compete with the so called “employers/corporations” by taking them over . If you’re stubborn and unfair , I won’t provide you with a second occasion to act that way . I’ll be damned before I keep crawling back to a so called bargaining table begging for better conditions etc. I’d much rather pull the rug from under you and remove your power in the process permanently . There are many wise and legitimate ways of achieving this .
The “Alliance” concept is a form of mixture between secret society & conglomerate cooperative with subsidiaries galore to prevent a potential breakup . There has never been anything remotely close to being created of which I speak . There are similarities , but nothing as powerful and or as ingenious which would bring labourers together and render them equally extremely prosperous & powerful in a capitalist era through a collective web .
What Hoffa sr. managed to do was incredible and should not be denied . However, he played with fire and once that flame asked him to walk away , he chose differently due to not wanting to let go of his “brainchild” . He should have walked and viewed his union as a prototype to be refined and not repeat the same “mistakes” with a new stronger , better , wiser, more powerful Alliance structured concept . In fact had he done this , in 1980 once deregulation occurred and the Teamsters lost their power he would have gained tremendously through the new concept .
You have no idea how I wish that man were still around . To this day , nobody has refined and improved the “labour union” concept , nobody . Rather , it has become warped and compromised .
To go a step further in the “twilight zone” , if government were a little more awake , they should buyout all essential businesses in three sectors . Transportation , agriculture(commodities) , and basic materials(mining) and forestry . Then expand to buying out supermarkets to distribute the food , then mining & construction , and food processing , manufacturing(especially toilet paper) ,and pharmaceuticals . Anything related to medicine ,drugs , is government owned .
Pour those corporate government profits into labour wages & benefits , education , health care etc . Abolish all form of taxes . Restructure education . Incite education and render it free . Develop the people into geniuses by the time they reach grade 6 in elementary school .
Wars will become history , ethics will become reality . We would be in a position to expand through outer space , we wouldn’t be in fear of overpopulations . That means no longer any products created on the bases of rendering one diseased , aged , weak , etc. We simply wouldn’t be any longer thinking in ways to cause harm . Pharmaceuticals would be redefined as an aid rather than as a crutch . Traditional medicine would be used in extremes and eventually completely replaced with mind boggling technology compared to our current primitive concept .
Holistic medicine would become the norm until no longer needed due to understanding ourselves better . Organized crime would no longer be old school of what crime is viewed to be , it would become the unconventional way to find the flaws in our “system(s)” and pushing us to improve .
In other words , there would no longer exist a mentality that would render one into a “rebel” . Chemical mind imbalances and trauma would be part of the past . Birth defect occurrence no longer possible .
What we currently distinguish as forms of “negative” thinking and or mind alternation due to chemical imbalance would no longer exist due to mind evolution and better understanding . We would literally vibrate at a higher level and all act as the gods that we are rather than primitive homo-sapiens . We certainly have a long way to go since we’re still arguing about wages , humane treatment , and labeling killing animals in their natural habitat as a sport , LOL !
Keep technology as free enterprise and based on a capitalist regime as an incentive . However , all essentials should be government owned and profits distributed and invested to increase the quality of life for all . Government would not be a position fulfilled by a typical mind . Positions would be filled by philosophers at the highest level . Ethics is key .
You don’t take from one to give to another . You buy them out , change the law , subsidize to incentivize them to develop something more meaningful and contribute to evolution . Government owns and controls the bottom more primitive essential needs . Government philosophers must interact with children on a regular basis since those children will be in the process of becoming wiser than the philosophers .
Ahhh it’s nice to dream . However , reality must first be dreamt before it has a chance to be developed into reality .
In my opinion ………….
Noble1
Furthermore , I’ve never seen a “business owner” be controlled when it comes to production in their business . I’ve only seen this in regards to truck drivers .
Though “owner operators” and or IC’s as you like to term them are paid by production and their production is limited by “regulators” due to their regulations . You can’t even set your own price in your industry . You’re following on that too !
This industry has gone mad ! Then we have these so called independent business owners through the label of Owner Operators/IC’s bending and accepting this absurdity .
This “independence” is a mirage , an illusion ! You’re so controlled you don’t even realize it anymore . Even worse , when you do realize it , you justify it ! Then when someone comes along and says hey we’ll enlighten you in that regard , you object ! You’re a dependant contractor who abides by someone else’s rules . That’s your classification as a lease on . THEY CONTROL YOU ! You’re not an independent business . This industry has managed to twist your minds .
Simply put :
UNITE , create your own collectively owned empire by restructuring the pieces cleverly . By uniting you gain power due to “volume” . Divided you’re giving that power away and it’s being used against you .
Government can be influenced and unfortunately bought and fooled . Laws can be changed . The FAAAA can be ratified etc etc etc . What is important is to be fair , ethical , prosperous , and happy while doing what you enjoy without harming another in the process . Not set rules that favour some rather than all . This industry & government hasn’t been fair . It generally responds to a capitalist mindset in a capitalist era . This era will transition into the next one just as feudalism transitioned into this one .
The only reason major carries objected to AB5 is because they can’t afford it ! They can’t afford having workers properly classified ! They are making a hell of a lot of money the way it is at your expense .
Every driver and or O/O should be earning double what they are currently earning ! That’s a hell of a lot of money coming out of your pockets and going into another’s !
So rather than fight all the BS against you , UNITE , restructure and earn without a limit by truly becoming “independent” !
Me, myself , and I is the wrong mindset to have . It’s the mindset behind fiat currency ! That’s another issue that is greatly weighing against many while favoring a few . However, we can get around that injustice by playing their game . Their game is their strength as well as their weakness .
All I’m saying is that there is a better way . At this point you’re not calling the shots . You’re victims of others calling the shots that managed to fool you into believing that you’re calling the shots .
It’s only been 40 years you’ve been cutting your throats while competing against one another and living on diminished wages(inflation adjusted)while doing the same thing in this industry as drivers . Though you want to fight till you’re blue in the face to keep it that way while pointing at me and saying that I have a screw loose ??? LOL !
Ok , no problem , enjoy your so called “independent success” while bending over following another’s imposed regime on ya for your momentary peanuts . It’s just a question of time before it completely collapses on it’s own . I’d say it’s currently at around 94% .
Once these carriers you so much want to cling to start replacing you , then perhaps you’ll wake up , but it will be too late by then in this industry .
For now , enjoy trying to survive under this regime . Some of you are still in la la land . So smile !
IMHO !
Noble1
FOR THE RECORD !
Quote :
Third Circuit Rules That FAAAA Does Not Preempt New Jersey’s ABC Test for Determining Independent Contractor Status
“In finding the New Jersey test had no “direct” impact on prices, routes, or services, the Third Circuit observed that the ABC test makes no mention of carrier prices, routes, or services. Nor does the test single out carriers; it applies to all New Jersey businesses. Moreover, the Third Circuit noted that the test does not regulate carrier-customer interactions or other “production outputs,” addressing instead only employer-worker relationships. ”
BOOYAH !
AB5 is based on the “ABC Test” !
In my humble opinion …………..
My Own Boss!
A win for communists everywhere… as short lived as it may be.
Noble1
You remind me of the feudalist mentality before the capitalist era . You want to believe the world is flat and you’re argument is based on the lack of understanding gravity .
Eventually we will become “one” , no matter how hard your types attempt to keep us divided .
It’s called progress . Division is old school . Progress cannot be held back for very long , it never could . Technology has brought us closer than ever before . Ride the wave rather than fight it . You can punch and kick water and air as hard as you like , you won’t win against it . My mind and vision is like water and air , shapeless & formless . Be flexible , you can adapt to anything ! Be like water my friend . Didn’t Bruce Lee suggest the same ?
You are too rigid my friend ! Why persist to stubbornly remain in a mould created by another ???
You want freedom , then free yourself from the shape someone else has moulded you into !
You’re fighting to remain in another’s mould ! That’s what you have decided to do , to abide by someone else’s rules . Though you’re referring to me as a dictator ? All I want to do is free you from your mould formed by someone else . Though I understand that you find comfort in it and fear the unknown . If most of us clenched to yesteryear as you so desperately are fighting to do with your outdated mould , we wouldn’t have progressed from feudalism to capitalism .
Are you a leader ? If so , then stop following someone else’s regime and LEAD !!
In my opinion ………….
david aguero
Trucking is truly independent and shouldn’t be in the same class as those who deliver bread or furniture. Flowers foods is the biggest violaters of ab5 the company that delivers wonder bread Dave’s killer bread and tasty cakes in California. They have total control over the days u work control of the money u make. I can go on and on . There are people who work 70 hr weeks and take home nothing . Flowers foods needs not only to be fined but in my opinion be shut down in California for fraud extortion and abusive behaviour towards workers.
Noble1
In my opinion a genuine Owner Operator under their own authority that offers their transportation services to a business other than which performs the same service as they do , is truly an independent contractor/business owner .
If the O/O signs a contract with a , ie: shipper , not only is the O/O offering a service apart from which the shipper does , the O/O is also cutting out the “middleman” and in doing so reaps more income .
If the O/O wants to hire a driver to drive a truck the O/O owns , then that hired driver is undeniably an employee and should be classified as such .
An O/O dealing through a load broker would be considered a genuine O/O as well , however , the O/O is sharing a chunk of their profits with a middleman .
Understandably huge shippers need capacity . Major carriers can offer capacity .
What the FAAAA does not preempt is for transporters to cut corners unethically in their attempt to reduce costs .
Thus , laws are created to prevent them from doing such .
However, transporters attempt justifying cutting corners unethically through their FAAAA argument which preempts laws that have an influence on price, route, and service .
So they use the FAAAA preemption argument ABUSIVELY in an attempt to do as they please no matter who’s rights they violate in the process . They argue that compensating you through proper classification would weigh on price ,and the FAAAA preempts that , ROTFLMAO !
In my humble opinion .
My Own Boss!
“If the O/O signs a contract with a , ie: shipper , not only is the O/O offering a service apart from which the shipper does , the O/O is also cutting out the “middleman” and in doing so reaps more income. ”
Business lesson Noble1: Income is what is left after you subtract your costs from your revenue.
The middle man isn’t always the enemy and being able to charge a shipper directly doesn’t guarantee more income. A large shippers may not want to do business with 1,000 one truck operators which means we wouldn’t have access to the lion’s share of the freight.. And we don’t all have the technological capability to do business the way these shippers want and there isn’t one tech all shippers use. Then what? Another middleman? And what about leveraging buying power? Last I checked OOIDA,, which is a good organization can’t sell me fuel at as good a price as I get from my fleet today. There are many other reasons why one may or may not want to contract your business with carriers directly. The key is understanding YOUR business and making an informed decision on what is best for you.
I declare my income, I follow the tax law and take advantage of the opportunity available to me. I run a legit business and I pay my taxes. I work hard and carry a lot more risk than an employee and as such I am entitled to the rewards. I earn substantially more as an IC than I ever did as a Company driver. Being leased on to a carrier is not illegal and doesn’t strip me of my rights and opportunities, despite what the Dictatorship of California or the Teamsters think.
Noble1
replied to you in prior comment above .
Mike
We need to define what an “Independent Contractor” actually is. I just parked my truck today, moving on… I had my truck leased to a carrier, as I just turned off my operating authority. I am 1099’d, but I cannot just go haul freight for say JB Hunt whenever I want. I am relying on the carrier I am leased to for cargo insurance and all of the other legalities. Back in the day, if you found a good outfit to lease on with, this setup was mutually beneficial. Now, with the government handing out operating authority like candy, to every mouth breathing non English speaking foreigner that comes along, the game has changed. Canada has this same issue, it has gotten so bad they gave it a name, Driver Inc.
Time to turn back the clock, stop punishing the driver with regulation and ELDs, how about we go back to the old days, with regulations that work. Prior to deregulation, trucking was a profitable industry for all involved, we need to think about going back to those days. Just my .02
Noble1
Quote:
” I had my truck leased to a carrier, as I just turned off my operating authority. I am 1099’d, but I cannot just go haul freight for say JB Hunt whenever I want. I am relying on the carrier I am leased to for cargo insurance and all of the other legalities.”
That’s the definition of a “dependant contractor” , not an “independent contractor” . A dependent contractor is economically dependant on its principle .
Quote :
“Now, with the government handing out operating authority like candy, to every mouth breathing non English speaking foreigner that comes along, the game has changed.”
Handing out authorities is not the “problem” per se . Handing out authorities to candidates who fulfill requirements simply renders the industry more competitive .
What you do with that “authority” may or may not lead to a problem which is what may need to be addressed .
” Canada has this same issue, it has gotten so bad they gave it a name, Driver Inc. ”
One issue among others in regards to the driver inc. abuse is found especially with “dependant contractors” .
Say a guy such as yourself leases on with a carrier . You then hire a misclassified employee as an independent contractor too cut costs to drive your truck hauling loads for the carrier you’re leased with .
The carrier you leased with not only “controls” you , but also controls your “sub-contractor/driver” . The carrier tests your driver , has your driver apply with them , has your driver go through their drug tests etc etc etc . This is completely unreasonable . Now your driver is not just misclassified with you but is extremely controlled by 2 outfits , you the dependant contractor and the principle carrier . AB5 eliminates this problem . You being dependent on the carrier and under their control would be categorized as an employee . An employee cannot hire an employee , which would further solve another misclassified employee problem .
AB5 got it right . The ABC Test got it right . However , major carriers and the one’s who agree to being misclassified are both reaping some sort of financial benefit which shouldn’t be if proper classification was applied .
What AB5 is attempting to do is eliminate ABUSE ! If people want to misinterpret eliminating abuse as limiting their freedom to prevent them from being abusive , then so be it .
Carriers need to be prevented from encouraging the misclassification issue . In Canada they are attempting to render the “Carrier” 50% responsible for the employee misclassification occurrence engendered by the “independent contractor(s)” they do business with .
In my humble opinion …………..
Noble1
Furthermore , in Canada they also want to render the “shipper(s)” responsible by 50% for truck driver employee misclassification(s) by the “independent contractors” the shipper(s) has a contract with .
They want shippers to drill their transportation contractors with driver classification questions .
This can be viewed through the OTA & CTA websites . I used to share my views with the CTA quite often on these and other subjects a year or two ago through their website . I no longer do due to the fact the CTA represents carriers more than anything and or anyone else . They are biased .
On another note :
Shippers are guilty of back door dealing . Often they will contour the organized labour union by hiring “contractors” rather than employees in their attempt to cut costs .
Crown corporations are guilty of this sort of manoeuver as well . They will hire an “independent contractor” , which is actually a “dependant contractor” , this “dependant contractor” will then hire a driver and misclassify that driver as an “independent contractor” .
So it will be interesting to say the least in regards to how the government will lean on this “issue” .
Lots of cut throat unscrupulous dealing in this industry , from “government” at the top all the way down to the “employee” . This is one reason among others for which I label this industry as a “can of worms” .
In my humble opinion ………..
My Own Boss!
Noble1, your union drivel sounds smart, but you keep brushing over the important details.
There’s a difference between Driver Inc and IC’s or Owner Operator’s as the Canadians call them. IC’s or OO’s purchase or choose to lease a truck (both are allowed under the law) versus one who incorporates as a Personal Services Business and chooses to drive a truck someone else’s business has purchased or leased, with no risk of loss. You keep talking about the number of customers someone has as the defining reason to be an employee versus contractor. Tax law doesn’t insist you have more than one customer to legitimize your business. Leasing on to a carrier and operating under their authority and insurance doesn’t make you their employee. You still get to choose what you do, when you do it and how you perform the work and you still have to manage your costs, take care of your assets and pay the bills, including paying yourself.
Stop trying to paint us all with the same brush. As much as Union Trolls would love to see our independence stripped away, there’s a difference between Employees and IC’s and it is not hard to defend. Tell Hoffa to find another industry to “save” LOL.
Noble1
Quote :
” Leasing on to a carrier and operating under their authority and insurance doesn’t make you their employee”
It renders you “dependant” upon them . That’s the issue .
Why render yourself “dependant” upon a carrier rather than uniting and becoming the “carrier” you’re dependant upon ?
Broaden your horizon .
Why worry about what an insurance co. will dictate in regards to your premiums rather than uniting and creating your own “mutual” aka insurance co. ?
Why worry about fuel prices & costs rather than uniting and creating your own financial entity that trades the markets to increase your profits and lower your costs ?
Why stubbornly argue to abide by and stick to the status quo rather than innovate ? Conventionality is not progress ,unconventional thinking is .
You want to absolutely remain in old school . You’ll be left behind . Times are changing . Either you change your way of seeing things and thinking on your own or you’ll be forced to due to progress .
You can make more money by restructuring and thinking out of the box .
BTW , Hoffa is on his way to being voted out . I don’t believe in the primitive unions of yesteryear ways of doing things . My vison is much more empowering and much more profitable than a simple labour union concept .
In my opinion ………….