California’s AB5 law is destroying the American dream for truckers. Now is the time to get involved.
Hopefully, by writing this I will have inspired the right person to get more involved in politics. As the saying goes, if you aren’t at the table you are on the menu. California’s legislature epitomizes this statement with its liberal super-majority.
In 2018, the California Supreme Court claimed that delivery drivers for a same-day delivery company, Dynamex, were improperly classified as Independent Contractors (IC’s) and should be entitled to all the benefits of employment; this started a new legal precedent. The California legislature was frothing at the mouth for the opportunity to codify the decision into law. How could they resist the urge to create a law that allowed them to seize hundreds of millions of new payroll tax dollars? Follow the money. To the detriment of the trucking industry, the following year Assembly Bill 5 (AB5) was passed with its infamous ABC test to determine employment status:
“…a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:
(A) 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.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”
Please note the notorious “B” prong. It is virtually impossible for a trucking company to satisfy the B prong of the ABC test with IC drivers since both parties engage in trucking.
It is no secret there is a national driver shortage and virtually every trucking company is investing heavily in recruiting drivers. There are about 70,000 IC truck drivers in California; if these individuals wanted to become employees they have the opportunity to do so. However, they choose to remain IC's. Why? They make more money, they choose which loads to accept, and they choose when they want to work … they are business owners. Well, not anymore.
Many of these IC truck drivers are first-generation immigrants who came to the United States hoping to achieve the American dream by owning a business. These entrepreneurs start with one truck, and after working hard and becoming business savvy, they eventually purchase more trucks and employ other drivers. This model provides a clear pathway for hard-working individuals to start their own businesses.
But the California legislature doesn’t think they should have the freedom to start their own business. They don’t think people are smart enough to enter into business transactions with others. Welcome to the welfare state, where your businesses are closed and you are provided union and corporate scraps.
Personally, I’ve had enough and believe laws like AB5 are the tip of the iceberg. This is why I’m running for local office and hope others will follow suit; now is the time to get involved.
David Clifford
Director of Operations, Ventura Transfer Company
https://cliffordforhb.com/