Truckers Challenge Gig Economy Law
The California Trucking Association argues new laws will hurt truckers economically. (Flickr)
The California Trucking Association filed a federal lawsuit on November 12 challenging California’s recent ordinance forcing businesses to treat contract workers as employees. Under the ordinance, workers would be entitled to benefits, overtime pay and sick leave the San Francisco Chronicle reports.
Commonly called the Gig Economy Law, California’s state Senate passed AB5 earlier this fall on September 10 by a vote of 29-11. Eight days later, Governor Gavin Newsom (D) signed the bill. First introduced in December 2018, the bill aims to codify a ruling from Dynamex Operations West, Inc. v Superior Court of Los Angeles by requiring employers to apply the ABC test on potential independent contractors, according to Tech Crunch. To be classified as a contractor, the employer would have to prove that: the worker is free from the employer’s control in performing the work, the work takes place off the site of business and outside the usual course of business, and the worker is engaged in an independent practice or occupation.
The bill’s author, Assembly member Lorena Gonzalez (D-San Diego), cited the estimated $8 billion a year from lost wages, taxes, and expenses as an example of how the Gig Economy Law could help boost California’s economy and workers. A study done by the Labor Center at UC Berkeley found that the Gig Economy Law would apply to up to nearly two-thirds of independent contractors, with most high-wage jobs being exempt.
Although the bill aims to empower contract workers with guarantees of a minimum wage and workers compensation, the legislation has sparked controversy from ride-share apps, food delivery services, and now the trucking industry. Despite Uber and Lyft’s unsuccessful attempt to be exempted earlier in September, the California Trucking Association argues that many truckers will be denied the opportunity to profit from their vehicle and set their schedules, according to the Sacramento Bee. In a statement on Fox Business, the association’s CEO, Shawn Yadon, estimated that the new law would deprive 70,000 independent truckers of their ability to work, claiming that it would illegally infringe on interstate commerce. Yadon later said that “we can protect workers from misclassification without infringing on independent truckers’ right to make a living in California.”
As Uber, Lyft, and Doordash pledges $90 million for a 2020 ballot measure opposing the law unless they can gain exemptions for their drivers, the trucking association’s lawsuit could pave a potential legal road towards gaining further exemptions for other industry workers such as construction workers and janitors.
The San Francisco Chronicle reports that, with the bill coming into effect on January 1, 2020, Gonzalez greeted the additional legal challenges, saying in a statement that she “expected big corporate interests… to take this fight to the place they know they can delay justice for workers: the courts.”