Trucking Industry Must Comply With California Independent Contractor Test

The California trucking industry lost their bid for a rehearing at the Ninth Circuit this week, which means that they are required to abide by the state’s contractor labor law Assembly Bill 5 (AB 5). This ruling not only sets up a potential case for the United States Supreme Court, but in the interim it means that thousands of workers in the trucking industry across California could be entitled to additional pay and benefits if reclassified as employees under the law. If you have questions about how this ruling may impact your employment, talk to an experienced California employment law attorney in your area today 

Facts of the Case

The California Trucking Association first brought the case, which is a trade organization that represents a number of motor carriers who hire drivers that own their own rigs, or large commercial trucks, as independent contractors. They claimed that AB 5 should not apply to their industry because the 1994 Federal Aviation Administration Authorization Act preempts state law when it comes to motor carriers as it pertains to price, route, or service in respect to the transportation of property. The appellate court disagreed, ruling that AB 5 was a generally applicable labor law and as such it does not conflict with the federal Act. After the ruling, the California Trucking Association requested a rehearing that was denied by the court.

AB 5 Contractor Test

California law AB 5 implements a three prong “ABC” test to determine whether a worker should be classified as an employee or as an independent contractor. Under the state law, a worker is considered an employee and entitled to the rights and benefits that come with that classification unless all three of the following test prongs are met:

• The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
• The person performs work that is outside the usual course of the hiring entity’s business.
• The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

If a worker who was previously identified as an independent contractor is reclassified as an employee, they are entitled to many new rights and benefits. These include but are not limited to insurance benefits, workers’ compensation benefits, overtime pay, and more. With the denial of a rehearing, the California trucking industry is now subject to the AB 5 test, and many drivers once categorized as independent contractors may now be entitled to employee benefits and pay.

Talk to an Employment Lawyer Now

If you or someone you know is a driver in the California commercial trucking industry, they may be reclassified from an independent contractor to an employee and eligible for substantial pay and benefits. To learn more about whether this ruling applies to your case, talk to an experienced employment lawyer today.