Sacramento, CA (MPG) - The California Senate approved Assembly Bill 5 (AB 5), a measure that will put tens of thousands of owner-operator truckers, who service agriculture, retail and other industry sectors, out of business. Despite efforts by the California Trucking Association (CTA) to amend the measure in a way that would protect independent truckers, Assembly Bill 5 by Assemblywoman Lorena Gonzalez (D-San Diego) passed with an overwhelming XX-XX vote.

“AB 5 could have been amended to address worker misclassification issues, as well as protect the 70,000 predominantly minority-owned truckers currently operating as independent contractors,” said Shawn Yadon, CTA’s CEO. “There is no reason why protecting workers does not include defending the right of tens of thousands of drivers who have built their businesses around the independent owner-operator model, invested hundreds of thousands of dollars in their trucks and have operated their own businesses for decades.” 

Since the bill’s introduction, CTA has advocated for changes to AB 5, including requirements for operating authority, ownership of vehicles, exclusivity and transparency about pay. These changes would have set a clear criterion and established independence in a way that protected employees from misclassification without hurting entire sectors of the business community.

Instead, AB 5 proponents created a scenario in which they chose winners and losers by carving out some professions while excluding others. In an attempt to address some of the concerns of California’s owner-operators, AB 5 was amended to allow drivers working within the construction industry to continue operating as independent truckers for a two-year grace period. However, AB 5 will severely limit work opportunities for tens of thousands of independent owner-operators in other business sectors.

In California, more than 136,950 trucking companies remain primarily small, locally owned business with small fleets and independent drivers.

“AB 5 will have implications that will go beyond employment classification,” said Yadon, CTA’s CEO. “Like the rest of the nation, California is experiencing a shortage of truck drivers, this measure will aggravate the problem by removing thousands of drivers from rosters as many have indicated they will move to other states or seek a different line of work all together.”

AB 5 now heads to Governor Gavin Newsom for his signature. If signed into law, AB 5 would deny a significant segment of the trucking industry the ability to continue operating as independent owner-operators, forcing them to abandon the investments they have made in their vehicles and taking away their flexibility to set their own schedule and determine their own destiny for their business.

Governor Newsom has until October 13, 2019, to approve or veto this bill.