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Hey, Governor Newsom, Why No AB-5 Exemption for the Trucking Industry?

undefinedVince Fong, CA Assemblymember from District 34, told KUSI Newsroom that the Governor should step in and provide immediate clarity to the California Assembly Bill 5 (AB-5) rule. 

Assemblymember Fong is asking the Governor to exempt independent truckers from AB-5, at least temporarily, to relieve the burden on the trucking industry in CA before more of the independent operators decide it isn’t worth it and leave the state.

That could severely disrupt cargo movements from and to the 11 major ports that span our coast. Three of the largest in the world are Long Beach, Los Angeles and Oakland. Billions of dollars worth of goods to fill America’s stores pour through the ports. Likewise, many of our exports go out through the ports. 

Too few drivers already cause extreme backlogs. The AB-5 conundrum will only make it worse if relief isn’t forthcoming soon. The Governor could exempt the trucking industry, as has already happened with other industries.

AB5 does provide exemptions for certain professions and occupations. Lawyers, doctors, dentists, hair stylists, accountants, insurance agents, engineers, real estate agents, financial advisers and some health care workers are included as being exempt from compliance with AB5.” – Everee.com Blog.

Yet, the overland freight movement or trucking industry, a $732 billion industry last year, must meet the “ABC Test” rule to be considered independent contractors under AB-5: 

  1. “The worker is free from the control and direction of the hiring entity in connection with the work’s performance, both under the contract for the performance of the work and in fact.
  2. “The worker performs work that is outside the usual course of the hiring entity’s business.”
  3. “The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.​” – AB-5.

As you can probably guess, “B” is the most difficult for those in the trucking industry. Both are in the same business, hauling cargo, but “A” also comes into play, considering the fleet manager must provide information on where and when to deliver the cargo.

“The FAAAA 49 U.S.C. § 14501(c)(1) says states ‘may not enact or enforce a law, regulation or other provision having the force and effect of law related to a price, route or service of any motor carrier, … broker or freight forwarder with respect to the transportation of property.’” – Freight Waves.

Therefore, one could speculate that if the Supreme Court of the United States (SCOTUS) had taken up the issue, the trucking industry could have been exempted because of that federal law and the fact that the U.S. Constitution states that “…some issues are so important to the nation’s well-being that the federal law should and must override state laws.”  

What AB-5 Does to the Trucking Industry  

AB-5 reclassifies many independent contractors as employees. For many, this allows for the same protections as an hourly wage earner or salaried worker. However, some 70,000 truckers fall under this categorization. 

“The U.S. Supreme Court decision not to take up the case of the California Trucking Association v. Bonta lifts the stay of California’s employee classification law and will have immediate impacts on the trucking industry. The California Trucking Association’s challenge to the law in the Bonta case has failed and sets the stage for California’s AB5 to disqualify many current independent contractor drivers and owner-operators from being classified as independent contractors.” – Freight Waves

It’s almost ridiculous to qualify truckers as “employees” subject to an hourly wage when they could spend 24 hours in their trucks, drive for a maximum of 11 hours per day, work up to 13 and 1/2 hours with a two-hour “adverse weather” waiver and spend weeks at a time on the road.  

Moreover, one of the biggest draws for an independent is the lure of owning your own business and not having to take every load of cargo an employer told you to haul. Many have already decided that hauling freight in CA is not worth the hassle. 

The speed limits are already the lowest of many states, the fines for traffic tickets are higher than most and diesel is at a premium here. 

The AB-5 Potential for Destruction of the CA Trucking Industry

As Assemblymember Fong told KUSI News, “It’s a terrible and ill-conceived law. The impact is massive.” He added, “The 70,000 independent truckers affected could close, they could move out of state.” 

“Those 70,000 truckers conduct 70 percent of the business in and around the ports. Forty percent of the nation’s good and products, equivalent to $400 billion comes through our ports, and 30 percent of exports come through our ports, so this law has massive impacts and negative consequences to everybody.”

Experts warn that AB5 CA will increase labor costsreduce the quality of service, create higher costs for consumers, and undoubtedly reduce the flexibility of workers.” - TransForce.

Given that so much of the world’s cargo comes through California ports, this will affect the entire nation’s economy, not just CA.

Governor Newsom could provide relief to the entire nation by simply adding the trucking industry to the list of hundreds of professions already exempt.

Although traffic lawyers cannot assist with this issue, a knowledgeable and experienced traffic attorney can assist with traffic issues such as tickets and DMV NOTS hearings.

Bigger & Harman Has Experience in Nevada County Traffic Court 

Call Bigger & Harman (661) 349-9300 for assistance with traffic tickets, DMV NOTS hearings and roadside inspection violations in Nevada County.

As a firm, we have been entrusted with over 20,000 tickets to defend in court. Truckers get a bad rap. We defend them. Thanks very much and have a good week!

Se habla Español (661) 349-9755.

Email: attorney@biggerharmanlaw.com

References:

The DMV Portal CA Commercial Driver Handbook Copyright 2022.

The AB-5 rule.

The Everee.com blog, AB5’s ABC test explained.

The TransForce article, What is California AB5? How Does it Impact the Trucking Industry? 

The FreightWaves article, Viewpoint: How a Supreme Court ruling will immediately affect California trucking.

The Good Evening, San Diego KUSI Newsroom Interview with CA Assemblymember Vince Fong (R) – AB-5 Will Crush Consumers if Truckers Aren’t Exempt, Posted: August 1, 2022.