AB5 – Prop 22 Wins in California

As a federal appeals court considers yet another challenge to California law AB5, a new iLevel poll released today sheds light on the logistics industry’s view of government regulating independent contractors.  Recall, AB5 requires a business hiring an independent contractor to perform an activity central to that company’s business to be considered an employee rather than an independent contractor. Hiring Owner Operators to perform trucking services for a carrier falls squarely at the center of this controversial and contentious debate.  Classifying independent contractors in this way would escalate business costs considerably, threatening the bottom line of both small and large transportation businesses.  The current legal dispute turns on whether the Federal Aviation Administration Authorization Act preempts California’s ability to impose AB5 on the trucking sector.  

As the legal wrangling continues, we asked iLevel readers whether government regulations should influence the classification of independent contractors.  Results demonstrate that the California AB 5 law is clearly unpopular in the logistics industry.  Nearly 70% of poll respondents preferred fewer regulations, in opposition to the AB5 California law.  The recent victory of California’s Prop 22 which defines transportation and delivery drivers as independent contractors – not employees – implies a strong majority of California voters agree with the logistics industry.        

Source: iLevel Logistics