California Trucking Association sues to stop contractor classification test
- The California Trucking Association and two owner-operators are suing the state of California to stop the application of a test used to determine which workers may be classified as independent contractors and which must be classified as employees, reported Commercial Carrier Journal.
- The so-called "ABC test" has made it more difficult for carriers to classify drivers as contractors since the standard requires that independent contractors only be used for "work that is outside the usual course of the hiring entity’s business" — meaning a trucking company cannot hire truck drivers as independent contractors, since driving is at the core of their business.
- This lawsuit is the second from the trucking industry looking to challenge the test.
Back in April, the state of California adopted a test for independent contractors that generally assumes workers are employees — for all types of industries, not just trucking. But as the standard is enforced, the reality is hard to swallow for the trucking industry.
The California Supreme Court developed the test in its April ruling on Dynamex Operations West, Inc. v. Superior Court, unanimously determining that the same-day courier, who has employed independent contractors exclusively since 2004, was misclassifying its workers.
The decision is intended to protect contractors from what some drivers have called "modern-day slavery," but it also hamstrings owner-operators who make their living following trucking demand from carrier to carrier.
In July, the Western States Trucking Association sued the California Department of Industrial Relations and the state’s attorney general to nullify the Dynamex decision on the grounds that it conflicts with existing law. The American Trucking Associations has publicly supported that opinion as well. On the other hand, port and freight workers associated with the Teamsters union have generally been supportive of the court ruling.
The trucking industry has been plagued with misclassification lawsuits for years if not decades, leading to strikes and multi-million dollar settlements. California has taken an active legislative strategy in tackling the issue.
In September, California Gov. Jerry Brown signed a bill creating a public list of companies found to have violated rules regarding wages and expenses for drivers by a court. If retailers hire these companies, they will be held jointly liable for violations and misconduct when the law takes effect in January 2019.
- Commercial Carrier Journal California Trucking Association the latest to sue state over driver classification ruling
- Supply Chain Dive New California independent contractor test assumes all workers are employees
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