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Date

Tesla announces new electric Semi model 11/13/2019 Not everyone happy with potential FMCSA clearinghouse delay 11/11/2019 Friday Short Haul - AI taking driving jobs, CRV scam, Truckers protest AB-5, ELDs quit working 11/8/2019 Investigators cracking down on truck accident fraudulent lawsuits 11/6/2019 So you want to start your own trucking company? 11/4/2019 Friday Short Haul - FMCSA emergency exemptions, snow plows, FedEx employee bribery charges 11/1/2019 Human smuggling via big rigs on the increase 10/30/2019 Carriers, drivers look at ways to deal with California's AB-5 10/28/2019 Friday Short Haul - Millennials and trucking, Truckers Christmas Group, Navistar settlement 10/25/2019 Too many drivers still don't know to "Move Over" 10/23/2019 Are trucker strikes a thing of the past? 10/21/2019 Friday Short Haul - Passenger car drivers, spotted lanternfly, women drivers 10/18/2019 OOIDA makes final push for better HOS rules 10/16/2019 Car-truck crash fatalities continue to increase 10/14/2019 Friday Short Haul - Amazon's fleet of day cabs, legislator's disclosure, WTA petition 10/11/2019 ATA chief takes on truck-accident lawyers 10/9/2019 Lonely on the road? Get a furry friend 10/7/2019 Friday Short Haul - Lab-grown meat, fraudulent freight brokering, FMCSA HOS committee, FMCSA Clearinghouse 10/4/2019 UPS takes giant leap in its drone delivery program 10/2/2019 Female drivers are safer bet for trucking companies 9/30/2019 Friday Short Haul - Embark gets financing, FMCSA announces safety grants, Covenant exits Mexico routes, and trucking statistics 9/27/2019 Emissions standards battle heats up between the EPA and California 9/25/2019 Smog checks in the future for California truck drivers 9/23/2019 Friday Short Haul - Volvo Dynamic Steering, Meals for 18 Wheels, speeding crackdown, OOIDA opposes legislation 9/20/2019 Telematics could be insurance-premium-saving boon for fleets 9/18/2019 54 percent of survey respondents still not impressed with telematics technology 9/16/2019 Friday Short Haul - Walmart video, it's churn, not shortage, California's independent contractor bill, hemp drivers plea 9/13/2019 TCA honors three Highway Angels 9/11/2019 Now they're talking about "smart" trailers 9/9/2019 Friday Short Haul - Detention-time comments, truck orders decline, diesel fuel shortage 9/6/2019 Berkeley study says reducing independent truckers can alleviate climate change 9/4/2019 Clearing up concerns about the drug and alcohol clearinghouse 9/2/2019 Friday Short Haul - Hurricane Dorian, Speed limiter bill, Thank a Driver campaign 8/30/2019 Georgia jury awards $280 million for truck-driver-caused multi-fatality 8/28/2019 Friday Short Haul - New eCascadias, Top cities for truck driver jobs, Push against driverless trucks 8/23/2019 Decision on California drivers' employee/contractor status coming down to the wire 8/21/2019 UPS jumps on autonomous bandwagon with TuSimple investment 8/19/2019 FMCSA publishes proposed HOS rule changes 8/16/2019 Fleets, drivers coming to like automated manual transmissions 8/14/2019 CVSA asks for new truck crash study 8/12/2019 Friday Short Haul - HOS revisions delayed, AEB mandate proposed, Koch sued for sex discrimination 8/9/2019 Kodiak Robotics takes lead in autonomous truck industry race 8/7/2019 New York City combats rash of cyclist/truck clashes 8/5/2019 Friday Short Haul - CRST wins lawsuit, OOIDA opposes insurance hike, UPSNav 8/2/2019 Mechanics shortage equals driver shortage in intensity 7/31/2019 DOT announces almost 1$ billion in grants to fix infrastructure 7/29/2019 Friday Short Haul - DOL on sleeper pay, UPS drone delivery, Geowiz ELDs 7/26/2019 FMCSA takes a look at assault, harassment of female and minority drivers 7/24/2019 It's hot out there, what's a trucker to do? Can't idle. 7/22/2019 Friday Short Haul - Utah truck rollovers, aging truckers, lifetime CDL bans 7/19/2019 Truck-mounted LED billboards coming under fire 7/17/2019 Trucker 'drones on' with unique approach to teaching driving skills 7/15/2019 Friday Short Haul - Rhode Island tolls, human smuggling, contractor vs employee status 7/12/2019 ELD mandate deadline looming, many still not compliant 7/10/2019 New "boot" device being deployed to threaten Walmart overnighters 7/8/2019 Friday Short Haul - Prime Inc vs Amazon, mother fights HOS changes, truck drivers appreciation week 7/5/2019 Proper way to fly the American flag on your truck this Fourth of July 7/3/2019 Roundabouts are becoming popular; but are they best for trucks? 7/1/2019 Friday Short Haul - Skills test proposal, driver shortage, hemp sentencing, driverless trucks 6/28/2019 Experts warn of active wildland fire season 6/26/2019 More states signing on to enlist truckers against human trafficking 6/24/2019 Friday Short Haul - Shippers of Choice, insurance rates, wheel spikes, WIT award 6/21/2019 Freight numbers not holding up to 2018's highs 6/19/2019 Truck safety group urges purges of drug abuse drivers 6/17/2019 Friday Short Haul - Self-driving certificate, truck platooning, trade war stacking up cargo 6/14/2019 HOS waiver coming soon for fireworks haulers 6/12/2019 FMCSA takes a further look at detention time 6/10/2019 Friday Short Haul - Autonomous delivery, HOS rules changes, CDL retest 6/7/2019 Roadcheck 2019 in effect this week 6/5/2019 Hemp arrest prompts USDA memo 6/3/2019 Friday Short Haul - Waymo big rigs, Move over sting, Under-21 comments 5/31/2019 Severe weather prompts renewed emergency declaration 5/29/2019 Memorial Day holiday is prime time for cargo thefts 5/25/2019 Friday Short Haul - Hauling hemp, road rage fatality, new rules for autonomous vehicles 5/24/2019 Autonomous trucks on USPS test run 5/22/2019 Future era of cab-less trucks will be the end of HOS rules 5/20/2019 Friday Short Haul - FMCSA under-21 comments, Tesla autonomous car crash, 24,000 drivers sign contract with YRC 5/17/2019 Under-21 interstate drivers getting serious look by FMCSA 5/15/2019 Trucker Buddy program matches drivers with a classroom; everyone wins 5/13/2019 Friday Short Haul - Driver awarded $80 million, ODFL driver wins, loading dock black hole 5/10/2019 Storm breaks out from Rockies, slams into Midwest, South 5/8/2019 Capacity issues have shippers looking at private fleets 5/6/2019 Friday Short Haul - HOS rules, dark skies, Falcon drivers 5/3/2019 'Bug' permits now required for four eastern states 5/1/2019 Simulator use is catching on for schools, carriers 4/29/2019 Friday Short Haul - Thinking electric, Penske opens charging station, border crossing crisis, railroads taking trucking business 4/26/2019 ELDs might not be the panacea that was hoped for 4/24/2019 Truck drivers may soon see "phantoms" driving yard trucks 4/22/2019 Friday Short Haul - Nikola big rigs, WIT welcomes Peterbilt, Oregon crashes, Border crossings 4/19/2019 Carriers claim financial benefit of putting up drivers in hotels 4/17/2019 Uber's IPO application reveals interesting data about its freight brokerage business 4/15/2019 Friday Short Haul - CDL examiner arrested, tolls proposed for trucks, marijuana use on the rise 4/12/2019 Smart Load Board will get carriers the loads they need 4/10/2019 Huge lines and long wait times greet carriers at Mexico border 4/8/2019 Friday Short Haul - Marijuana, ATA campaign, personal conveyance rules 4/5/2019 Over-the-air downloads revolutionize parameter updates 4/3/2019 Don't get scammed by skimmers 4/1/2019 Friday Short Haul -- New Cascadias honored, motorist survey, U.S, Xpress awarded, rest stop parking 3/29/2019 Legislators address underride collisions, propose more underguards for trucks, trailers 3/27/2019 Motorists soon may encounter a different kind of truck convoy 3/25/2019 Friday Short Haul -- Women in Trucking, irate motorist, FMCSA eases HOS, Safe-Cap 3/22/2019 Recent survey shows cost of roadside repairs is rising 3/20/2019 FMCSA announces drug and alcohol clearinghouse website 3/18/2019 Friday Short Haul - Swift settlement, driver shortage myth, TCA Best Fleet award 3/15/2019 The hidden danger of looking but not seeing 3/13/2019 Accident scammers target trucks for financial payout 3/11/2019 3/9/2019 3/9/2019 Friday Short Haul - Snow on the roof, bypassing toll road, Waze under fire 3/8/2019 Retailers blame driver shortage for price increases 3/6/2019 Drivers' smartphones may be clue to road roughness 3/4/2019 Friday Short Haul -- Freight rates, HOS changes, tonnage reports 3/1/2019 New tax changes hit drivers hard 2/27/2019 FMCSA to implement under-21 interstate driver program for former military 2/25/2019 Friday Short Haul -- Connecticut tolls proposed, hydrogen fuel-cell trucks, cell phone use 2/22/2019 Congress committee looks at state of America's highways 2/20/2019 Number of cargo thefts is down; but dollar value about the same 2/18/2019 Friday Short Haul -- Crossing the border, CA sues FMCSA, Lobbying against larger trucks 2/15/2019 Detention - A problem still in search of a solution 2/13/2019 February Highway Angels honorees named 2/11/2019 Friday Short Haul -- C.R. England announces pay raises, eCommerce impact on trucking, TCA announces best fleets 2/8/2019 Is a guaranteed minimum pay the solution to the driver shortage? 2/6/2019 Long CDL testing wait times cost economy billions of dollars; not helping driver shortage 2/4/2019 Friday Short Haul -- Walmart hiring, Uber Freight App, Speed-limiter Law, America's Road Team 2/1/2019 Cranking -- The Good, The Bad, and the Ugly 1/30/2019 California survives challenge to its low-carbon fuel standards 1/28/2019 Friday Short Haul - Highway robbery ... autonomous trucks ... new trailers 1/25/2019 LithiumHub enters jump-starter market with Jumpbooster JP30 1/23/2019 2019 Looks Good For The Transportation Industry 1/21/2019 Raymond Burt named TMC Trainer of the Month for February 2018 3/28/2018 TMC Transportation Announces Recipient of Prestigious Wheel Master Award 3/7/2018 TMC Transportation Named The Home Depot’s Flatbed Carrier of the Year For Fourth Straight Year 2/28/2018 Pay Raises & New Peterbilts for PAM Drivers 2/26/2018 New DOT Drug Testing Rules Effective Jan 1, 2018 1/11/2018 Amtrak Derailment: Trucks Haul 270,000 Pound Locomotive Engine During Cleanup 12/21/2017 Pepsi Places Largest Order Yet For Tesla Electric Trucks 12/12/2017 Kavin Hallett named Trainer of the Month for October 2017 12/8/2017 Over 100,000 Truck Drivers Likely Have Undiagnosed Sleep Apnea And More Testing Is On The Way 8/10/2017 Drivers Share Their Best Tips, Tricks, And Secrets For Life On The Road 7/18/2017 Drivers Are Losing Money By Taking The Wrong Approach 7/13/2017 Truckers and Guns: What Is and Is Not Legal 7/6/2017 Preparing To Go Solo For The First Time? Experienced Drivers Share Their Best Advice 6/29/2017 The Truck Stop Survival Guide: Advice From Experienced Drivers 6/15/2017 The Worst Cities For Traffic In The U.S. For 2017 6/8/2017 We Ask Drivers How They Would Make The Logbook Rules Better 5/30/2017 Self Driving Trucks Are Not Coming Anytime Soon 5/25/2017 11/30/-0001

Carriers, drivers look at ways to deal with California's AB-5

Dave Wickenhauser on Mon, October 28, 2019

Last Updated: Mon, October 28, 2019

As the dust settles on the recently passed new California independent contractor law motor carrier companies and independent drivers are scrambling to make sense of the law and to decide what to do about it.

Part of the problem arises from the fact that although the new law is very simple on the surface, the devil – or possibly the loophole -- is in the details.

Simply put, as it pertains to truckers the new California law states a carrier must classify as an employee any driver who hauls a load for them. A carrier cannot hire an independent owner-operator to take up the slack if there are not enough employee drivers to fulfill capacity.

In other words, a carrier must turn down business.

From the point of view of an independent owner-operator who wishes to remain independent the pool of available loads declines considerably … as he or she can accept freight only from shippers and warehouses rather than from carriers that have their own fleets.

With that in mind, and with the January 1, 2020, deadline looming for compliance, California motor carriers and drivers are actively thinking about their options, including compliance, or seeking out loopholes.

Or, many may be planning to take a "wait and see" approach knowing that there are many challenges to the new law, and are planning to just do nothing and continue as before.

Compliance

It's highly likely that California legislators simply believe that trucking companies will just go ahead and sign up all of their independent contractors as employees.

But, it takes two to tango, as the saying goes, and independent drivers might not think that's such a great idea.

Greg Feary, president and managing partner of the Scopelitis law firm, told HDT recently, “I would be surprised that under normal circumstances, a motor carrier approaching the independent contractor workforce and saying, ‘Give me a show of hands, who wants to become an employee,’ I doubt there would be many hands that would go up in the air.

“A significant number of owner-operators, more than a simple majority, see themselves as independent businesses and entrepreneurs – and they did that intentionally. If they wanted to be an employee, they already would have been an employee for a motor carrier.”

And, too, carriers are cautious about jumping onto the idea of adding a bunch of new employees under the new law, with the risk of finding themselves unable to reclassify them back as independents if the challenged law is overturned.

Fleets that rely on a large number of independent contractor drivers will find themselves at a competitive disadvantage without drivers to serve capacity if they cannot convert those independents to employee status.

Finally, compliance – meaning converting thousands of independent drivers to employee status -- raises the concern about what to do with all the older, possibly non-emission-compliant trucks left behind by those independents.

One industry spokesperson told HDT, “I don’t see trucking companies buying older used trucks from owner-operators. We may see the used-truck market in California become flooded with equipment, meaning owner-operators won’t be able to sell the truck for nearly what it’s worth."

Seeking alternatives

One tactic that has been suggested to solve the independent contractor-employee dilemma is to try to argue that motor carriers are really not in the same business as the independent drivers they hire.

The thinking is that the motor carrier deals with the shipping customer and handles all of the mundane details that the man or woman who sits behind the big rig's wheel doesn't have to deal with.

Unfortunately, where it has been tried elsewhere courts have not always seen it that way. And with the scrutiny given to the new California law it's not expected that courts will buy that idea.

A motor carrier that hires independent contractors exclusively might be able to argue the point … right up until it has at least one employee driver, and then AB-5 descends on them like a big hammer.

Another approach that some might want to explore is for the independent driver to file as a business entity such as a limited liability corporation; which could be a legal and paperwork burden that might be beyond what an independent driver wishes to face.

Another workaround being looked at is that trucking companies that employ their own drivers can spin off a subsidiary company that operates as a third-party brokerage hiring independent contractor drivers.

Doing nothing

One can suspect that this might be the default approach for many smaller carriers.

Feary told HDT, “Certainly one option is to stand pat. You have to think about, will this law even look the same a year from now?”

The California Trucking Association, for example, was very active in trying to obtain an exemption for trucking. Followup activity could result in legislation amending the new law in favor of trucking companies.

Others are challenging on the basis of a Federal Aviation Administration ruling that prohibits states from enacting laws that affect a motor carrier's prices, routes and services. Lawsuits are in motion right now claiming that California's new law is preempted by the Federal rule.

It won't be the first time that the Federal government preempted a California law. Late last year the Federal Motor Carriers Safety Association declared that truckers are not subject to a new California law mandating meal breaks and rest periods similar to that of office workers. Early this year, California filed suit against the FMCSA hoping to overturn their ruling.

Finally, California's might be seeing a ballot initiative in an upcoming election to overturn AB-5. Uber and Lyft have already funded a ballot committee to the tune of $60 million.

All this is to say that there is a chance that the "wait and see" carriers might be able to ride out the new law without making any changes, hoping that the law will be overturned before authorities catch them hiring independent contractors.

Sources: HDT, Overdrive

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FMCSA Owner Operator Trucking Industry Concerns Understanding The Laws

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