Back in 2019, a bill was proposed called the AB 5 independent contractor law. It was intended to regulate companies that hire massive numbers of gig workers, like Uber and DoorDash, but when the law went into effect on January 1, 2020, it radically changed worker classifications.
Millions who were previously defined as independent contractors are now considered employees. While the trucking industry was previously exempt from AB 5, the Supreme Court’s recent ruling changes everything. Now, the law applies to trucking too, sparking industry-wide frustration.
No Buts About It: The AB 5 Law Is Bad for Trucking (But not BYX)
Now that AB 5 impacts all 1099 truck drivers, the majority of trucking companies will be impacted.
The law states that to be classified as an independent contractor, three conditions must be met:
(a) The worker is free from control and direction in the performance of services; and
(b) The worker is performing work outside the usual course of the business of the hiring company; and
(c) The worker is customarily engaged in an independently established trade, occupation, or business.
For trucking, the B stipulation essentially makes it impossible for carriers to contract with owner-operators. Owner-operators often lease their equipment to larger carriers and operate under their management, or they operate as their own entity and contract to transport freight for larger carriers. Now that the AB 5 law applies to them, their entire method of operation is at risk.
Many owner-operators relocating to other states
Even those who were born and raised in California are wondering if it’s time to move. How else can they avoid being taken down by AB 5? It’s unclear how stringent the courts will be in the application of this law to truckers. Many drivers don’t want to wait to find out. The point of AB 5 is to prevent companies from taking advantage of independent contractors who deserve to be treated as employees.
Unfortunately, this radical policy actually harms many independent contractors who have been proudly operating as owner operators. Additionally, the law is likely to make California’s backed up ports even worse, adding to the supply chain issues that have been plaguing the U.S. for over a year.
The Good News: AB 5 Can’t Touch BYX
Most trucking companies employ owner-operators because it’s more affordable. Luckily, BYX is among the few that does not. We’ve always employed every one of our drivers, providing full benefits, uniforms and state of the art equipment. If you ship with us, you don’t have to worry about AB 5 at all.