California Throws 70,000 Truckers in Gig-Work Legal Limbo, Risking Supply Chains
California Throws 70,000 Truckers in Gig-Work Legal Limbo, Risking Supply Chains
- Two-thirds of state’s port truckers could be forced off road
- Operators have known for 2 1/2 years this may come: lawmaker
By
Augusta Saraiva and
July 8, 2022 at 4:00 AM MSTUpdated on
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About 70,000 truck owner-operators who form the bedrock of California’s transport industry are in limbo as state-level labor rules start applying to them, creating another choke point in stressed US supply chains.
Almost a dozen truckers told Bloomberg News they’re unsure how to comply with California’s Assembly Bill 5, which requires workers satisfy a three-part test to be considered independent contractors, or else be seen as employees entitled to job benefits. The trucking industry relies on contractors — who until now have had flexibility to operate on their own terms — and has fought to be exempt from state regulations for years.
California truck owner-operators must now comply with AB5 after the Supreme Court on June 30 refused to review a case challenging the legislation that sets out the tests for employment-status classification.
Off the Road
The California Trucking Association, which brought that challenge, estimates the law may push thousands of independent truckers off the road while they take the necessary steps to comply with the new regulations.
More than 70% of truckers serving some of the country’s largest ports — including Los Angeles, Long Beach and Oakland — are owner-operators, and AB5 will govern their relationships with carriers, brokers and shippers in most cases, according to the CTA.
“We have never gotten any good answers from anyone official in California on how this is supposed to be enforced or how our members can comply,” said Norita Taylor, the director of public relations at the Owner-Operator Independent Drivers Association.
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The law comes into effect for truckers in the busiest months of the year as retailers stock up on back-to-school and holiday goods. At the same time, dockworkers and railroad workers are currently negotiating contracts with their respective employers. Additional transportation snarls would only worsen pandemic-era supply-chain chaos and add to inflationary
