California AB 5 – What You Need To Know
There are 70,000 independent trucking contractors in California and 136,950 locally owned trucking companies with independent drivers. This bill is expected to result in a drop in the number of drivers and trucks available in the California market. This can result in reduced capacity among the California trucking industry.
California AB 5 – Shippers
With this bill, many carriers will choose not to renew their lease agreements with drivers that are independent contractors. Some trucking companies fear they could go out of business as they will be losing most of their employees. As mentioned above, these effects will cause a reduction in capacity and increase in pricing for shippers, but it is still unclear to what degree that it will be.
California AB 5 – Carriers
Under this new bill, the state of California and its cities now have the right to file lawsuits against a company for misclassifying its workers as contractors. Going forward, carriers are facing a difficult decision and are currently figuring out how to go about this law. In order to adapt, some are likely to hire out of state contractors, while others are considering going to court with the state to obtain exemption.