Sacramento, CA (WorkersCompensation.com) – A federal judge has blocked a new law reclassifying gig workers and other contractors as employees from applying to truckers following a lawsuit that was filed last year.
U.S. District Judge Roger Benitez of San Diego said on Tuesday that he would grant a temporary restraining order blocking the law from changing the way truck drivers are classified. The lawsuit, filed in November by the California Trucking Association, claimed implementation of the law would illegally infringe on interstate commerce and would improperly impact many truck drivers who would have to abandon investments into their trucks, as well as their rights to set their own schedules.
The association has asked the judge for a permanent injunction.
AB5 passed in September of last year and codifies a California Supreme Court decision that simplified the way workers are classified. The new law, intended to protect gig workers, such as drivers for Uber and Lyft, would require only a three-pronged test for employment – how much control an employer had over the employee, whether or not the employee was doing work central to the employer’s main business, and whether or not the employee was doing the same work for other businesses.
When a worker is categorized as an employee, they are subject to numerous laws and regulations including workers’ compensation insurance, unemployment insurance, wage and hour laws and taxation. By declaring workers independent contractors, companies like Uber and Lyft are able to decrease their costs – a crucial component to their profitability.
While it was intended to impact the 400,000 rideshare drivers in the state and ensure that they had access to benefits, the law as passed would also impact an estimated 1.5 million other workers in the state such as truck drivers, writers, construction workers and building maintenance people.
In his decision, Benitez said the association is likely to prevail on its argument that the state law violates federal law. He also said the truckers would likely be subject to irreparable harm and that his ruling is in the public interest.
Cal. Assemblywoman Lorena Gonzalez (D-San Diego) who sponsored the bill, said the state would fight the association “to return jobs in the trucking industry to good, middle class careers.”
“For decades, trucking companies have profited from misclassifying drivers as independent contractors, taking away rights such as meal and rest periods and fair pay,” she said in a statement.
Other professions have also sued to stop the law. Freelance writers and photographers sued in December to block the law, saying it would unconstitutionally hinder free speech and the media.
In that law suit, the American Society of Journalists and Authors and the National Press Photographers Association asked U.S. District Judge Philip Gutierrez in Los Angeles to grant a temporary restraining order, similar to the one issued by Benitez for the truckers. No date was immediately set for a hearing in the writers and photographers case.
In addition, Uber and Postmates have filed a lawsuit challenging the law. Both Uber and its competition Lyft have vowed to fight the law by putting it on the ballot for voters to decide. Both ride share companies have maintained that the people who drive for them are not employees, but independent contractors.