A federal judge barred a California labor law from applying to independent truckers on Thursday.
Judge Roger Benitez of the US District Court for the Southern District of California ruled that AB-5, a California Labor law that makes it harder for companies to classify workers as independent contractors, does not apply to independent truckers.
AB-5 expanded the definition of “employee” to encompass a big portion of people that were previously classified as independent contractors.
It provides that a person who provides services in exchange for remuneration is an employee unless the company that hires the person can show that it exerts no control or direction over the person, that the person performs work that is outside the hiring company’s normal course of business, and that the person is customarily engaged in an independent established business or trade. This expanded definition of “employee” means that companies have to provide benefits to people they previously classified as independent contractors.
AB-5 went into effect on January 1. However, in December, before AB-5 went into effect, the California Trucking Association asked the court to enjoin the enforcement of AB-5 as to any motor carrier operating in California.
Benitez ruled that AB-5 should not apply to independent truckers because AB-5 “encroached on Congress’ territory by eliminating motor carriers’ choice to use independent contractor drivers, a choice at the very heart of interstate trucking.”
The Federal Aviation Administration Authorization Act (FAAAA) expressly prohibits states form enacting laws relating to the price, rout or service of any motor carrier. Therefore, because AB-5 would affect motor carriers’ prices, routes or services, it should not apply to independent truckers.