AB5 Check-In – The Latest on California Regulations

GoDrivers 360

May 10, 2023

AB5 Check-In - The Latest on California Regulations

AB5, the controversial bill to reclassify employees in California, is still receiving push back. Here are updates about where the bill stands and if it will be fully implemented. 

What is AB5?

Assembly Bill 5 is a Californian employee reclassification bill that seeks to protect gig economy workers, often classified as freelancers, as employees. This classification issue often causes people who act as employees not to get full benefits like insurance. The bill, however, essentially outlaws a whole category of truck drivers: leased owner-operators. This is why truck drivers, logistics companies, and driver associations have pushed back so heavily on AB5. Read more about AB5 and its early history here

Uber Lawsuit

While much of the backlash against the bill has surrounded the trucking industry, ride share giants like Uber and Lyft have quietly been fighting back. While this push back has mainly been through lobbying, one significant lawsuit from Uber may stop the bill from continuing. A 3-judge appeals court has recently revived the lawsuit and it is now on its way back to the lower courts. While this case does not place a preliminary injunction on AB5, there is hope that an injunction will be in the law’s future. This will give more industries more time to put lawsuits together. 

Equal Protection Argument

The Uber lawsuit argued that this bill targets ride share apps unfairly, and a similar argument could be made for the trucking industry, specifically for owner-operators. Since the Uber lawsuit argument has new hope, we may see trucking organizations or companies use an equal protection argument when fighting against AB5. 

Secretary of Labor Advancing to Senate

Julie Su, heavily involved in forming AB5 and starkly opposed by trucking associations, has advanced past the Senate Health, Education, Labor and Pensions Committee in her nomination to be Secretary of Labor. According to many associations, her confirmation could result in the passage of laws like AB5 at the federal level. Read more about Su here

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