In California, a new law has been launched, due to which tens of thousands of truckers will be left without work

Tens of thousands of California independent truck owner-operators may soon go out of business due to a new state worker classification law that defines them as employees, reports The Epoch Times.

Photo: Shutterstock

On June 30, the U.S. Supreme Court rejected a review of whether California Assembly Bill 5 (AB-5) violated the Federal Aviation Administration's Powers of Self-Employed Truck Drivers Act of 1994.

"Gasoline has been added to the fire, which is our ongoing supply chain crisis," the California Trucking Association (CTA) wrote in response to a high court decision regarding the association's legal challenge to the bill.

“In addition to the direct impact on the 70 owner-operators in California, who have seven days to shut down independent businesses, removing tens of thousands of truck drivers from the road will be devastating to an already fragile supply chain. increasing costs and exacerbating runaway inflation,” the associations added.

“We are disappointed that the court does not recognize that eliminating independent truckers will harm interstate commerce and communities across the state. The Legislature and Newsom administration must act immediately to avoid worsening the supply chain crisis and inflation,” the association said.

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The California State Assembly passed AB-5 in September 2019, sparking CTA legal action and a final decision from the Supreme Court.

The main sponsor of the bill was Lorena González (D), a union leader and former member of the Assembly.

Under AB-5, a self-employed commercial truck owner must pass a three-part test to be considered an independent contractor, with the exception of construction transport services.

Existing legislation defines employees as "any natural person who, under the rules of common law applicable to an employment relationship, has the status of an employee."

Self-employed truckers are eligible for benefits

The bill would make self-employed drivers and truck owners eligible for the same benefits and workers' compensation as full-time workers.

According to Globecom Freight Systems, a leading provider of transportation services, owner-operators make up 9 percent (350) of commercial truckers on the road today. Their average salary is about $000.

A recent study by the American Trucking Association estimated that the nationwide shortage of 80 truck drivers could double by 000. In light of this shortage, many trucking companies are now offering lucrative bonuses and salaries upon registration to attract more drivers.

The Federal Motor Carrier Safety Administration recently launched a driver apprenticeship program for those aged 18 to 20 that will allow them to cross state lines to further alleviate the shortage.

Tony Bradley, president and CEO of the Arizona Trucking Association, criticized AB-5 as a "terribly flawed piece of legislation" by California unions that would have a "decisive impact on all trucking."

“At this time, it is unclear how this will impact owner-operators who do not live in the state of California,” Bradley said. “We are assessing and looking at it carefully, but leaving 70 people out of work is not the right thing to do when we have raging inflation and supply chain problems.”

“How are people supposed to follow their dreams and start their own trucking company if they can't be their own bosses? In California, this practice has actually been stopped,” Bradley said.

Bradley said that today, 97% of all trucking company fleets have 10 trucks or less, and every major company started with "one truck."

He said AB-5 would force independent truck owners to join an existing trucking company or "take a different career path."

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“This has been largely driven by the California unions who have a hard time unionizing people who work for themselves. I think this will have a huge impact on our industry and economy,” said Bradley.

Given Arizona's proximity to California, the world's third-largest economy, Bradley said it's hard for Arizona independent truck owner-operators not to do business in California.

"I think some of them will go out of business and pursue other goals in life, although we don't know what the implications will be for out-of-state drivers," Bradley said.

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