California's Assembly Bill 5 law, better known as AB 5, is making waves in the logistics industry.
What is AB 5? California's Assembly Bill 5 (AB 5) law makes it harder for trucker owner operators to be seen as independent contractors in the eyes of the law. On June 30, the U.S. Supreme Court denied an appeal on AB 5, allowing for full enforcement of the industry-reshaping law.
AB 5 requires an “ABC test” to figure out if workers in California are 'employees' or 'independent contractors' for legal purposes and to have certain workers rights. Click here to learn more about the ABC test. How will AB 5 effect owner-operators? AB 5 may cause motor carriers and owner-operators to change 30 years of how the industry has operated and shift to a traditional employer-employee business relationship. Details within AB 5 may also prevent independent owner-operator truckers from working with some carriers, leaving these companies no choice but to hire only employee drivers. What's next for AB 5? Truckers and trucker associations are waiting to see. More than 70 trade associations ranging from trucking and retail to agriculture and business, have come together to fight for owner operators and asked the California Governor to delay enforcing AB 5, but that seems unlikely. RealTruckers can go to the The Truckstop Facebook Group to hear what truckers from around the country are saying about AB 5.