The Real Risk of California’s AB5

Over 70,000 owner-operators in California’s transport industry are directly affected by the new AB5 bill. California is one of the largest shipping ports of goods in this country.

California’s Assembly Bill 5 (AB5) was first passed in 2019 and went into effect on January 1, 2020. This three-part test aims to reclassify independent contractors as employees. The California Trucking Association (CTA) challenged this bill, but their challenge was denied by the Supreme Court. The AB5 puts owner-operators’ livelihoods at risk during the busiest time of the year, and they are unsure how to comply.

The CTA believes that AB5 will affect and ultimately control the relationships between carriers, brokers, and shippers. The proposed changes could force carriers to downsize and drivers to seek work out of state or retire early.  The United States’ supply chain has been chaotic post-pandemic, and this bill creates a substantial threat to our already slowed economic growth. 

Almost all owner-operators value the independent contractor model immensely. AB5 threatens to change how California drivers do business, pay their bills, and live their lives. This threat is spreading across the country, as other states observe and take steps to follow California’s lead in attempting to change the independent contractor model. 

Owner-operators concerned with these changes should seek legal advice. SCI clients are encouraged to contact SCI and learn the potential impact bills like the AB5 may have on you/your business. 


Read more about California’s AB5 here:

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