Let's talk about AB5. What is it?

In January of 2020, California's AB5 law went into effect. The law calls for a more strigent test to determine whether a worker is an employee or an independent contractor. Under this law, a California court would have to use the ABC test to determine the worker's status.

The ABC Test

(A) The company does not control or direct how the worker performs the work, either directly or through a contract.

(B) The duties of the worker are outside the normal scope of the company’s business.

(C) The worker has their own trade or business where they routinely carry out the work they are doing for the company.

If the answer to all of these is "yes" then the worker is an independent contractor, but if even one of the answers is "no" they are an employee. "B" is where all trucking jobs will fail the test and have to be classified as employees.

The problem with classifying all truckers as employees is that it increases the exspenses of smaller trucking companies that scale their business using owner-operators. These new employees will be entitled to health care, sick leave, and other regular employee benefits. It also puts a strain on the California ports that relay on drayage services.

Leave a comment

Please note, comments must be approved before they are published