As expected, the legal challenges are flying over Sacramento as industries opposed to Assembly Bill 5 (AB 5) that codifies worker status defining who are “employees” and who are “independent contractors” based on a state Supreme Court decision from April 2018.
This bill is generating substantial heat in the world of private businesses, but not much light. The reality is that AB 5 may, if it passes the court challenges, affect some 1.3 million workers— out of the 19+ million civilian employees in the state. To put it another way, all the smoke about this bill is affecting roughly seven percent of the California labor force.
The construction industry, at least the legit part of our profession, will hardly be touched at all, except for some additional paperwork. Union contractors and serious non-signatory firms are competing for increasingly scarce qualified construction workers. Our member companies offer high-paying jobs with full benefits and pay the required employment taxes for the privilege of doing business in California or their workers go to an employer who does.
A subset of the 1.3 million estimated gig economy workers— 70,000 independent contractor truckers—are singled out in an Associated Press story circulated to every major news outlet in the state last month, covering the first big lawsuit brought forth by the California Trucking Association (CTA).
“We expect big corporate interests — especially those who have misclassified their workers for years — to take this fight back to the place they know they can delay justice for workers: the courts,” the bill’s author, Democratic Assemblywoman Lorena Gonzalez of San Diego, said in a statement.
Independent drivers and the trucking brokers who provide them to contractors for site work and other heavy civil projects are the flies in the ointment for the construction industry as far as AB 5 conflicts go.
There is a provision within the new law that gives some relief to contractors regarding construction trucking independents, but only until January 1, 2022. There are traps built into the “relief,” however, such as requiring the independent trucker to register with the Department of Industrial Relations public works contractor list (with appropriate fees) whether the work is on a public job or not.
While the lawsuits will churn through the judicial system for years, others opposed to AB 5 including Uber, Lyft and DoorDash say they will spend $90 million on a 2020 ballot measure opposing the law which will give a decision by November 3, 2020.
By Brendan Slagle, ECA President Email: [email protected]