California’s AB5 has made for the kind of articles media outlets dream about.
As it’s been litigated over the past couple of years, we’ve seen unions jostle with lobbyists, spirited protests slow commerce (see last month’s blockade at the Port of Oakland) and a larger ideological showdown that pits ideals of workers’ rights against the flexible labor that gig economy proponents say is a feature, not a bug.
Amid the rancor, a lot of uncertainty still surrounds AB5. Carriers are unsure what it means, to whom it applies, and how it will even be enforced.
Essentially, the bill requires that many companies using independent contractors reclassify those workers as employees, which in the trucking world could have industry-shifting implications.
In a recent survey, FreightWaves asked carriers what they thought about AB5.
We left the survey open from July 21 to Aug. 1, and 171 people completed it. We do not ask respondents to share their or their companies’ respondents.
The survey found that some respondents view the bill as an existential threat to the current way American supply chains function. To others, it’s a necessary legislative step to prevent companies from taking advantage of workers.
The majority of respondents (53.8%) said they were in management positions, while 11.11% identified as drivers.
There’s substantial disagreement with the statement, “California’s independent contract law (AB5) has no impact on my business.” It scored the lowest weighted average of the bunch — 1.95 or, in effect, “moderately disagree.” A full 56.73% of respondents selected 1, however, which equals “completely disagree.”
But the rest of the statements are more split. The only other one that enjoyed fairly significant agreement is “AB5 has limited my freedom of choice,” which scored a 3.67, indicating moderate agreement.
In the survey we asked the open-ended question, “What do you think about AB5?” [Note: This is a small selection of the responses received, and some have been lightly edited.]
“It will hurt the California economy and therefore the U.S. economy. With the Ports of L.A. and Long Beach being the largest import berths in the U.S., this will only further increase the supply chain issues.”
“This is a good move by the government, and it needs to be adopted across the nation. Too many companies are taking advantage of the owner-operators and they need to get all of the benefits that are due to them. Many owner-operators do not understand this law and think that it was intended to hurt them, while it will actually help them in the long run. Many companies are intentionally offering high-mileage old trucks to drivers so that they can keep them off of their company roster and avoid the taxes and benefits that they would otherwise have to provide. Because of this third-party relationship with the shippers, many owner-operators are finding that the carriers are baking the books to take money off of the drivers’ rates. It all needs to stop. All truck drivers should get paid fairly. This model is a smoking mirror, making owner-operators think that they are in control when they actually are not, but instead are getting taken advantage of.”
“It’s completely stupid. Truckers are having a hard time as it is. First the CARB law, now ELD, now this. Being a trucker is not easy work, though it can be when you’re rolling. Let drivers decide their own fate. AB5 will throttle the entire business. For those truckers who break the law and cause accidents, the rules should be swift and severe. But don’t penalize the entire industry. Give the truck driver some autonomy to choose their own path.”
To see more reader responses, download the PDF of the full article.
Bee
We need government out of our lives. They seem to work for the oligarchs of the world. These people couldn’t care less about the truckers or the poor people. If trucker’s start fighting back the grocery shelves and gas stations will empty overnight. I wish every government official will resign and let ordinary people run this country the right way. Really really sick of government.
L D
If you have a Motor Carrier Operating Authority, own your own truck, and pay your own fuel and other expenses, then you are an Owner Operator. However, If someone hires you, then you will have to become an employee of that company and pay employee taxes and workman’s comp policy. The rates you are paid will have to go up to pay those payroll expenses. Some folks are saying an Owner Operator can become an LLC or S Corp and pay employee wages with payroll taxes and have a workman’s comp policy on themselves and they would be able to operate. We shall see if that works. But again, the rates will have to go up, for these owner-operators to make a profit.
The whole point is California wants to collect payroll taxes and have everyone on a Workman’s Comp policy. Everyone will be an employee of someone. No entrepreneurs anymore.
Richard Davis
Does it really matter if you own your truck, that you be considered an employee? It’s not like a person driving a company truck gets it any better, when it comes to sitting at a dock for free. Most don’t get paid either.
DE
If a truck / driver works for only one company and has to essentially accept the dispatch – that person is an employee of the dispatching company. Right to refusal and ability to take other work are my determining factors of independent / employee.
Carlos_P
🔥#REAL Carriers think it’s another power trip by the government FULLY INTENDED to kill👹☠️👹 Small Business.. threat to BIG BUSINESS Corruption 🔥💰🔥💰🔥 whom pays all their Lobbyists and ENRICHES the politicians that support them. FACT. 💰💰💰💰💰💰💰💰💰💰