After a federal judge temporarily blocked a California labor law meant to take effect on Jan. 1 by granting a temporary restraining order, now the courts say that truckers are exempt from the 'gig worker' law.
This means California’s new “gig worker” law does not apply to independent truck drivers because they are subject to federal statute, a Los Angeles judge ruled, handing a victory to one industry that is challenging a state effort to clamp down on labor abuses.
The law, known as AB5, makes it tougher for companies to classify workers as contractors rather than employees, a classification that exempts them from paying for overtime, healthcare and workers’ compensation.
Truckers have mounted the strongest defence against AB5, which is best known for striking at the heart of high-profile “gig economy” businesses like Uber Technologies and Postmates Inc, which depend on freelance workers to provide low-cost transportation and deliveries.
In a decision on Wednesday, Los Angeles Superior Court judge William Highberger said AB5 “prohibits motor carriers from using independent contractors to provide transportation services” and therefore is pre-empted by the Federal Aviation and Administration Authorization Act of 1994.
Highberger ruled in favor of NFI Industries’ Cal Cartage Transportation Express and other trucking companies that were sued by Los Angeles City Attorney Mike Feuer for allegedly misclassifying truck drivers as independent contractors rather than employees. Feuer said his office would appeal.