Dynamex Legislation Update - CTA Leads Opposition to AB 5 at Senate Labor Committee
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CTA Leads Opposition to AB 5 at Senate Labor Committee
Yesterday, as expected, the Senate Committee on Labor and Employment advanced Assembly Bill (AB) 5 by Assemblymember Lorena Gonzalez along a party line vote of 4-1, with all 4 Democrats supporting. However, both Senator Richard Pan (D-Sacramento) and Senator Jerry Hill (D – San Mateo) spoke to the need to address trucking in AB 5. Sen. Hill, Chair of the Senate Labor Committee, expressed concern that trucking had not yet been addressed and wanted to ensure AB 5 takes into account owner-operators as the bill continues to move forward.
CTA has taken a position of opposition to AB 5 since its introduction unless an exemption for trucking is included. CTA Staff has been in negotiations with the Teamsters and Asm. Gonzalez to push for its inclusion.
CTA’s Director of Legislative Affairs Matt Roman and Hayward based owner-operator Thien Tran provided lead testimony opposing AB 5. Mr. Tran shared his personal story on why he is, and continues to want to be, an owner-operator. He also detailed how unless owner operators like him are addressed in the legislation, he would lose out on the freedom he now enjoys to pick up his kids from school and work on his own time frame. Dozens of owner-operators provided opposition “me too’s”, with trucking making up the vast majority of the opposition.
AB 5 now moves to the Senate Appropriations Committee where it will be heard in late August. For more information on AB 5, you can contact Matt Roman at mroman@caltrux.org.
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Chris Shimoda, vice president of government affairs with the California Trucking Association, says trucking has been a pathway for people without advanced degrees to make more money. In fact, about 80% of drivers in the industry have a high school education or less, he said.
But if firms are required to employ their own drivers, independent drivers who own their own $150,000 Class 8 heavy duty trucks may not be able to find work.
“We all agree there should be a pathway, especially for the blue-collar working class to rise up the economic ladder,” Shimoda said. “It’s just, what are the rules for the labor and employment law side of things? If there are specific things that have been abused, then what are those and how do we reconcile that through this bill?”
As his association works to ease the potential impact of AB 5 on those drivers, the trucking industry has challenged the Dynamex decision in federal court, arguing that federal laws governing motor carriers preempt the state test.
Trucking is one industry that has yet to receive the nod from the bill’s author, however.
Independent owner-operators are “a huge part of trucking,” said Chris Shimoda, vice president of government relations at the California Trucking Association.
He said his group remains opposed to the bill unless it is amended to allow small trucking operators to freely contract with companies that need freight shipped, adding they do not want to be employees and value their independence.
Independent owner-operators would run into trouble because of the so-called “B prong” of the ABC test established under Dynamex because trucking would fall inside a hiring company’s usual course or type of business, Shimoda said.
He noted it was only about halfway through the legislative year and said his organization has been in contact with Gonzalez, the bill’s author, over the trucking issue.
“If you take a look at remarks from the bill’s author when this thing got out of the assembly she recognized that there does need to be something for independent owner operator truck drivers,” Shimoda noted. “We still need to identify what that provision looks like.”
He also said carve-outs for industries are not total exemptions but would allow those workers, like doctors, architects and others, to fall under the older common law test which allows employers more leeway in classifying their workers.
Truckers, who have filed two lawsuits saying the bill does not apply to them, potentially could be exempted as well, although Gonzalez said that that industry historically has misclassified drivers.
