How Does California’s AB5 Affect Truck Drivers?

Regardless if you’re a California truck driver or not, you’ve probably heard about the recent employment legislation that could change the entire trucking industry. As of June 30, 2022, Assembly Bill 5 (AB5) is in effect and making sweeping changes throughout the transportation industry. Over the last few months, there has been an excessive amount of news and information surrounding the legislation and the impact it could potentially have. So, what’s the truth about AB5?

We’ve created a comprehensive guide to California’s Assembly Bill 5 that explains the bill and how it will affect truck drivers and the industry.

What is California’s AB5?

In September 2019, the California Governor, Gavin Newsom, signed Assembly Bill 5 into law to provide gig workers with more rights and benefits. Specifically, the law promises gig workers who classify as employees minimum wage with overtime pay, standard employee benefits, expense reimbursements, health insurance, adequate breaks, and other benefits that were not previously promised under California labor laws. So, how do employers determine who classifies as what?

The ruling of AB5 is based on a 2018 California Supreme Court ruling, known as Dynamex Operation West v. Superior Court. The legislation replaced the 11-prong Borello test with a 3-prong test and established that workers were classified as employees unless otherwise proven by the hiring company. The new 3-prong test, known as the ABC test, determines whether a person can be qualified as an independent contractor.

For a worker to achieve this classification, the following three statements must be true:

1. The worker is free from direct control or direction of the hiring entity when performing their duties.

2. The tasks and services performed are outside the hiring entity’s usual business activities.

3. The worker regularly performs independent services similarly performed for the hiring entity.

If a worker does not meet the three requirements, they must be classified or, in some cases, reclassified as an employee and receive the rights and benefits that come with that title. The problem with the new ABC test is that it has created rigorous standards for employers, and it’s challenging for workers to pass.

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