Opinion: To protect supply chain, independent truckers need clarity
Rob Lapsley is president of the California Business Roundtable. Rachel Michelin is president of the California Retailers Association. Eric Sauer is senior vice president of government affairs for the California Trucking Association.
The imminent imposition of AB 5 on the trucking industry triggered the recent shutdowns at California ports, including Oakland.
AB5 codified the employee classification test under the landmark 2018 Dynamex decision. This change significantly narrows the circumstances for someone to qualify as an “independent contractor” and prohibits more than 70,000 drivers from continuing to earn a living under a model that has been allowed for decades.
While intended as a protection for all workers from misclassification, AB 5 has carve outs for approximately 100 industries and professions; trucking is not one of them.
Independent owner-operators own their trucks and contract with companies to provide transportation services. They provide vitally needed capacity at California ports while thousands of the truckers have successfully built their own companies after starting with just one vehicle.
As stakeholders at the frontlines of the goods-movement crisis, we do not support additional disruptions to California’s already strained supply chain. However, we understand the predicament that thousands of owner-operators find themselves in as enforcement of AB 5 on the trucking industry is imminent. Truly, what could be expected from these owner-operators who see their livelihoods on the line? These are independent owners who have worked under a decades-long business model that has provided them with the flexibility and economic opportunity that they want and who are now being forced to become employee drivers or jump through a series of legal hoops with no certainty they will be able to continue their businesses. Throughout the AB 5 legislative process, many owner-operators shared with members of the California Legislature why they wanted to remain as independent contractors. Testimonies from several drivers, predominantly minority individuals, pointed to the flexibility and compensation afforded to them as independent contractors. Some shared their ability to work for part of a year and visit their homeland for months. Quang Nguyen, who purchased his own truck in 2007, shared that as a single parent he has the means to provide a comfortable living for his two girls and the flexibility to be there for them. The simple solution being posed to them by the state to “just become an employee driver” is not what they want. Despite an uncertain outcome, tens of thousands of drivers continued to exercise their right to work as owner-operators, as they have done for decades. Before AB 5 was signed into law in late 2019, these individuals had an opportunity to become employee drivers. In fact, the driver shortage over the last decade has provided a vast array of opportunities for anyone holding a commercial driver’s license. Companies big and small have provided incentives, including sign-on bonuses and competitive benefit packages, to attract and retain drivers. Yet, for nearly three years, since AB 5 was signed into law, owner-operators continued to operate under a business model that has proven beneficial and has a history of prospering members of the trucking community. As the Biden Administration indicated, a “strong, stable, and safe trucking workforce that offers good-paying jobs to millions of truck drivers is a critical lifeblood of our economy.” This includes owner-operators. Our associations, along with more than 70 other organizations including manufacturers, agricultural associations and local entities, recognize the vital role of independent truckers. We submitted a letter to Gov. Newsom imploring him to lead on this issue that not only impacts California, but the entire nation. We are asking the administration to work with us to find a workable solution that protects workers from misclassification without eliminating the owner-operator model from the trucking industry.