The state of California has quite a lot on its plate. Between a homelessness epidemic, high taxes, and a propensity for harsh COVID-19 restrictions, many Americans who are able to have been fleeing the state in droves.
Just a few weeks ago, the California state legislature decided to increase gas taxes, rather than lower them as other states have done. Later, Americans learned the average cost of gas in California has surpassed $6.00 per gallon.
Unfortunately, the new AB5 labor law in California carries the potential to bring even more hardship to the state.
A Terrible Developments For California Truckers
In a nutshell, AB5 makes it significantly more difficult for workers to be classified as independent contractors, as opposed to employees.
Workers are only able to hold an independent contractor status if they don’t have to take “directions” or be “controlled” by the company and can supply proof affirming this.
Many freelancers and gig economy workers have fought this law, as have truckers. Truckers even tried to take the law to the Supreme Court, but the latter refused to hear their case.
— Scott Lincicome (@scottlincicome) July 9, 2022
In California, tens of thousands of truckers work as independent contractors. If AB5 is enforced, it will create a scenario where roughly 70,000 truckers cease doing business in the state.
This would impact not just California, but also the overall supply chain. With the supply chain already facing backlogs and labor shortage problems, taking tens of thousands of workers off the beat will only worsen an existing crisis.
Impractical to Enforce?
Many of the truckers that California believes should be categorized as employees, rather than independent contractors, actually own their own trucks, rather than using company trucks.
Trucking industry officials claim that AB5’s mandate for truckers to be recognized as employees will boost inflation, due to the cutback of labor amid growing demands. These officials also warn the ripple effect of chaos is ultimately not worth the state government strong-arming people away from being independent contractors.
NEW: California Republican lawmakers request @GavinNewsom use his executive powers to delay AB5 (worker classification law) or exempt truckers from it altogether.
The group warns the workforce will take a hit, disrupting the supply chain, and drive inflation. pic.twitter.com/sfUUXKUE6u
— Ashley Zavala (@ZavalaA) July 6, 2022
California Democrats, meanwhile, aren’t showing much interest in the pushback from truckers and industry leaders. AB5 is being branded by Democratic officials as a labor law that truckers should simply get on board with.
However, all things considered, if AB5 is enforced the way California Democrats want, they will likely find themselves with far fewer truckers in the state.