In a big shift, the California Trucking Association (CTA) chose to end its fight against Assembly Bill 5 (AB5), a law that changes how California labels truck drivers. This choice wrapped up a four-year court battle and started a new phase for the state’s trucking business.
AB5, which became law in June 2022, uses a tough ABC test to decide if workers can be called independent contractors. This law now means many truck drivers must be treated as employees giving them benefits and protections that independent contractors don’t get.
Eric Sauer, who leads the CTA admitted the group struggled to fight AB5. He said that while they thought the court’s first ruling was right, California and those backing the law had to argue that the state’s 70,000 owner-operators should be allowed to work in California.
Even though the CTA has given up its appeal, the Owner-Operator Independent Drivers Association (OOIDA) continues to challenge AB5 in court. OOIDA claims the law singles out interstate truck drivers. It points out that the law provides an exemption for California-based truckers, which drivers from other states can’t take advantage of.
Within the California trucking business, the effects of AB5 are still being felt. Now that the legislation has changed, trucking businesses will have to choose whether to modify their business plans to comply with it, disassemble their commercial pickup vehicles, or possibly stop operating in California.
As the trucking industry adjusts to these new rules, it remains to be seen whether other states will follow California’s lead, or enact federal laws to address labor segmentation in the trucking industry.
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