Calif. legislature pressing ahead with bill to make ‘Dynamex’ IC decision state law

Despite ongoing challenges against its root court decision, lawmakers in California are pressing forward with a bill that its opponents say threatens the traditional owner-operator model in the state. The legislation, AB-5, passed the state’s General Assembly last month and now heads to the California Senate, where lawmakers are expected to take up the bill when they return from recess in mid-August.

The legislation would, in effect, bar companies from hiring independent contractors to perform tasks that are part of the business’ core function. For trucking, this means motor carriers would be blocked from leasing with owner-operators as independent contractors — a prevalent model within the industry.

If made law, the bill would amend the state’s labor laws to essentially codify the April 2018 decision made by the state’s Supreme Court in the case of Dynamex Operations vs. Superior Court of Los Angeles, where the so-called “ABC test” unfavorable to current leasing models in trucking for appropriate independent contractor classification was used.

The bill, if passed, “would affirm the horrible outcome of the Dynamex case” for companies utilizing independent contractors in core business functions, said Jason Geller, an attorney for firm Fisher Phillips and the managing partner at the firm’s San Francisco office. Fisher Phillips represents employers, including motor carriers.