US Supreme Court Refuses To Review California Law On Independent Contractors

Topic 32045 | Page 1

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Harvey C.'s Comment
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With all of the other SCOTUS decisions lately this seems to not have got much coverage. California's law (AB 5) governing the classification of independent contractors will now apply to trucking as the stay of a prior ruling has been lifted. There is mention that this will put the jobs of 70,000 contract drivers off of the road in California.

https://www.truckinginfo.com/10175946/california-trucking-braces-for-ab5-supreme-court-wont-hear-appeal

I do personally believe that some companies use independent contractor status in an abusive manner, treating a driver very much like an employee in telling them when and how to do their job, but not paying the taxes and benefits related to employees. But there are certainly should be more exemptions to the law than it provides.

PackRat's Comment
member avatar

This crap legislation began to go into effect in 2019, and it's not only for drivers, but any independent contractors. Driver's out there cannot act like it caught anyone by surprise. If it did, shame on them.

Another great reason to exit that place for anyone that's still on the fence. Another perfect illustration proving the lie of, "More Government Is Good For You".

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PJ's Comment
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Yeah this has been in the works for a while. For anyone that missed it, last year the House introduced and passed a bill to make this nationwide. Thank god it failed in the Senate.

Another reason voters need to pay attention and vote in Nov.

This is another intentional action to cripple our US Economy. The propaganda is that it is to help workers, but far from the truth.

Companies use independent contractors a lot, especially in the container portion of our industry. We can debate the merits of that, but the bottom line is it takes choices away from workers and companies.

Harvey C.'s Comment
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The opportunities in California and the weather are still great, IMO. The political climate sucks. I often think about retiring and moving to another state or even another country but am staying put for now. I've visited several states over the past couple of years and always find something that bothers me more than what bothers me here.

The idea that all workers should get employee benefits is a nice idea but being forced into it by legislation such as AB 5 creates more problems than it solves. AB 5's application to truck drivers has been stayed due to litigation until now. I'm surprised that the CTA says that there are still 70,000 drivers that can potentially be affected. I would think that this can have a large ripple effect across the country.

I have a farm and since it's a small operation I'm exempt from some overtime rules but companies with over 25 employees must pay overtime for work over 40 hours per week. For me it's 9.5 hours/day, 55 hours/week but by 2025 I will be subject to the same rules as large employers. This was supposed to help these employees but has hurt them. Since work is often seasonal, they often have to find a second job to earn more money since employers have hired more workers instead of having workers work longer hours. Since my employee died in May, I'm using labor a labor contractor who has over 25 employees so his workers only work the 8/40 schedule but he can send me other workers on weekends if I request.

Jeff L.'s Comment
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This will be a very unpopular reply.

I think it is a good thing: 1. It will force trucking companies to pay drivers a decent wage, freight rates will go up as a result. Currently several of the largest trucking companies make more money from their lease programs than they do hauling freight.

2. It will get rid of companies putting new drivers in leased trucks. Sorry but a 90 day new driver barely know enough to be able to even properly pre-plan a trip. The last thing they need is a company pushing a lease on them with bs and 1/2 truths. You are being set up to fail. I have never seen the numbers but I would be very surprised if even 25% of first time lease drivers make it past their first year.

3. If you want to own your own truck there are and will still be non-carrier lease to own programs, where the title of the truck will actually be in your name, not the lease company.

Yes it is really going to suck for the drivers that do have lease trucks and understand how to run a business. If it was a real lease to own you could keep driving either under your own authority or one of the carriers that only use owner operators. I have run several business where we have used contractors and in multiple states, You can not set their start times, work days, etc you can only set start dates and completed by dates. If you try and set anything else they are no longer considered contractors but employees. Trucking companies have always gotten away with this, If you think that as a lease driver for say Knight, Swift, or Prime you are an independent contractor go haul a load for JB Hunt, Coyote, Convoy or any other company and see what happens, can you say goodbye lease hello looking for a new job. All you really are to the mega carriers is a source of revenue.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

PJ's Comment
member avatar

There are good arguments on both sides of this coin. The whole lease a truck from the carrier is really a seperate issue. This effects all drivers leased onto a company.

Carriers that use I/C’s don’t all lease the equipment. The driver can have their own tractor and pull the companies trailers. I did it for several years. There are pros and cons to everything. This change isn’t going to do anything about raising wages. It will however force those companies using I/C’s to change their business model, and is going to hurt the container business far harder than most other segments.

Those drivers effected in Ca hopefully have been making plans toward getting their own authority or selling their equipment and going company. This has been in the works long enough for them to make plans for their future.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Truckin Along With Kearse's Comment
member avatar

This will be a very unpopular reply.

I think it is a good thing: 1. It will force trucking companies to pay drivers a decent wage, freight rates will go up as a result. Currently several of the largest trucking companies make more money from their lease programs than they do hauling freight.

Even if rates go up, the pay won't go up because the lease ops now pay for the lease truck and the company truck. If the company is now paying for all of the trucks.... Do you think the drivers will get a pay increase? Only 20% of Prime is company. So you expect prime to pay 100% of the trucks and maintenance, insurance, the employer tax, workers comp, and 401k, benefits for 9000 drivers instead of 1800 and still expect a pay increase? Doubt it

It will totally destroy the business model. And there are plenty of OO out there who utilized that model in.order to build there business and get their own authority.

2. It will get rid of companies putting new drivers in leased trucks. Sorry but a 90 day new driver barely know enough to be able to even properly pre-plan a trip. The last thing they need is a company pushing a lease on them with bs and 1/2 truths. You are being set up to fail. I have never seen the numbers but I would be very surprised if even 25% of first time lease drivers make it past their first year.

I agree new drivers shouldn't be leasing... But not all companies push it. Unfortunately it seems the drivers push others into leasing...and after all this time I finally got straight answers on why. The experienced lease ops want the newer lease ops to take the crappy freight.

3. If you want to own your own truck there are and will still be non-carrier lease to own programs, where the title of the truck will actually be in your name, not the lease company.

This does not work unless you get your own authority. Even if you own your truck outright you cannot go to a carrier with employees. A lease truck you described cannot lease onto a carrier (with employees) for the reduced costs of saving on insurance, permits etc under this law People are arguing over whether an S Corp can allow you to lease on for freight with a paid off truck, but Primes lawyers said no.... So I will believe them over a bunch of truckers without legal knowledge. The carriers with no employees seem to pay more insurance than carriers with employees, so the owner/lease op is still getting screwed out of thousands of dollars.

Yes it is really going to suck for the drivers that do have lease trucks and understand how to run a business. If it was a real lease to own you could keep driving either under your own authority or one of the carriers that only use owner operators. I have run several business where we have used contractors and in multiple states, You can not set their start times, work days, etc you can only set start dates and completed by dates. If you try and set anything else they are no longer considered contractors but employees. Trucking companies have always gotten away with this, If you think that as a lease driver for say Knight, Swift, or Prime you are an independent contractor go haul a load for JB Hunt, Coyote, Convoy or any other company and see what happens, can you say goodbye lease hello looking for a new job. All you really are to the mega carriers is a source of revenue.

Actually in Prime's contract there is the ability to lease the truck but get your own authority and take it elsewhere, or you can latch it to another carrier for freight. You must sign a rider stating the fixed costs will be paid directly to prime either from your LLC or S Corp or by the new carrier. This is true for both "walk away" aka conventional leases that you turn in as well as lease purchases. Prime has both options.

I have friends that have both taken their lease purchase to FedEx, as well as one who is in a conventional lease and got his own authority running on load boards.

I personally despise the bill not because I want to buy a truck or lease.. but because if someone chooses to do so, their freedom of choices are being taken. Truckers should revolt with signs "My truck My Choice". 😂

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

OOS:

When a violation by either a driver or company is confirmed, an out-of-service order removes either the driver or the vehicle from the roadway until the violation is corrected.

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