A Win for Truckers
In the midst of a near storm of controversy, California’s new independent contractor classification law went into effect yesterday sending hundreds of thousands of workers into a frightening legal limbo.
The new law, AB 5, codifies a 2018 State Supreme Court ruling which adopted a far stricter test to determine which workers qualify as independent contractors.
Despite much of the media coverage focusing on how this law impacts the app-based rideshare drivers of the state, hundreds of thousands of additional workers outside of the so-called gig economy now face the potential for reclassification, dramatically limiting their ability to work independently. According to the UC Berkeley Labor Center, this law applies to 64% of the independent contractors in California, and under certain legal interpretations, an additional 27%.
Or to put it more clearly, out of all the independent contractors in the state only a mere 9% were actually granted an industry or profession exemption to the law.
Yet, on New Year’s Eve, just hours before its implementation, a federal judge granted the California Trucking Association an additional temporary exemption to the law. This dramatic win for nearly 70,000 independent truckers, allows them to continue to operate as independent contractors within the state. Our Co-President, Mike Bishop, offered his insight on the judge’s decision;
“It looks like the constitutional challenges to AB5 are resonating with the federal court. This time the California Trucking Association wins, while other similarly situated organizations, like The American Society of Journalists, have already filed similar suits asking to be exempted from the law.
This is great news for Independent Workers, and hopefully it serves as a pretext for the additional cases. Far too many Independent Workers face the threat of reclassification, greatly limiting their ability to work freely and flexibly. As I said before, this law will only drive innovation, ingenuity and growth out of California and future states should be wise to not repeat this with similar measures.”
Despite the law going into effect Wednesday morning, many other professional associations continue to fight for their own exemption.
Uber, Postmates, The American Society of Journalists and Authors, and The National Press Photographers Association have already filed suits against the law. These associations and companies are seeking the very same exemptions provided to entire industries and professions, such as doctors, attorneys, and real estate agents.
And along with Uber – Lyft and other app-based driving platform companies have even gone so far to introduce a 2020 ballot initiative allowing California’s voters to decide whether to override AB 5 for their industry.
Questions over Enforcement
The enforcement of this new law will only add to the confusion over the next few months.
Although several state agencies are responsible for enforcing proper worker classification, any individual or class action lawsuits of worker misclassification that are brought to the state will most certainly trigger additional legal battles over worker reclassification.
In the meantime, hundreds of thousands of freelance writers, photographers, musicians, hairdressers, app-based drivers, interpreters, and health aides will have to work in legal jeopardy.
Opportunity and business could potentially evaporate for these professions as all companies who use these workers are now responsible to adhere to this strict law. The possibility of misclassification and additional employee costs will strongly deter the use of Independent Workers. This will not only force workers out of the state but also drive up costs for any consumers who use the products or services of Independent Workers.
Despite the disarray, other states, such as New Jersey and New York, have also introduced similar legislation to AB 5, thereby replicating the conflict in California.
The broad language of any future legislative measures needs to be addressed. Similar legislation only spells disaster for the economies of states who rely on the agile and skilled talent that only Independent Workers can provide.
Watch this space.