State laws Trucking Transportation

Federal judge lifts A.B. 5 injunction in California independent truckers’ case

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San Diego — A federal judge in California has lifted an injunction that had kept independent truck drivers in the state from being classified as independent contractors under A.B. 5.

Judge Roger Benitez of the U.S. District Court for the Southern District of California on Aug. 29 formally lifted the injunction, which had been in place since January 2020.

A.B. 5 codified a 2018 decision by the California Supreme Court that created a three-step “ABC test” to determine whether a worker is an independent contractor. In its decision, the court ruled that workers can be classified as independent contractors if:

  1. They’re “free from control and direction” of the employer as it relates to performance of the work.
  2. Their work is performed “outside the usual course” of the hiring entity’s business.
  3. They engage in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.

In April 2021, the 9th Circuit Court of Appeals in San Francisco reversed a preliminary injunction that stayed enforcement of A.B. 5. The case, California Trucking Association vs. Bonta, advanced to the U.S. Supreme Court, which in June declined to hear the case.

“Gasoline has been poured on the fire that is our ongoing supply-chain crisis,” CTA claims. The “ABC test” doesn’t apply to some owner-operators who work in construction trucking, according to CTA, if the following requirements are met:

  • The subcontractor is a business entity formed as a sole proprietorship, partnership, limited liability company, limited liability partnership or corporation.
  • The subcontractor is registered with the Department of Industrial Relations as a public works contractor, regardless of whether the subcontract involves public work.
  • All construction trucking services must be performed by employees, unless the subcontractor is a sole proprietor who operates their own truck to perform the entire subcontract and holds a valid Motor Carrier Permit.
  • The subcontractor negotiates and contracts with, and is compensated directly by, the licensed contractor.

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