CA-AB5, a law aimed at protecting gig economy workers, has instead given rise to mixed feelings and heated debate. On one hand, many insist that the law would end predatory employment practices and unfair compensation models. On the other hand, gig workers and the companies that contract them, including Lyft and Uber, insist that app-driven gig employment offers the ultimate in career freedom. In the trucking industry, the law received 11th-hour pushback that tied up potential enforcement in court. Other industries, including independent writers, artists, and musicians, have successfully challenged the law and gained exemption. Clearly, this law is leaving its mark on workers and employers across California, for better or for worse.
The push for more time to analyze CA AB5
In February 2020, California State Senator John Moorlach introduced Senate Bill 990. The legislature proposed repealing CA AB-5 ABC-testing enforcement until January 1, 2022. The repeal would give the state, employers, and gig workers time to work out details and strike a fair balance. Unfortunately, no one seemed to notice this bill back in February.
But that was before COVID-19 made headlines across the United States and upended the economy as we know it.
On April 17, 2020, SB 990 got an update, more sponsors, and a new push for passage. “It makes no sense to help the unemployed while AB 5 continues to throw many thousands more people, especially independent truckers, out of work,” stated Senator Moorlach in his recent op-ed published by the California Globe.
The trucking industry is one of the few sectors currently hiring. Drivers are essential to COVID-19 relief, particularly in California, where port trade is critical to our supply chain. Across the country, companies like Walmart and Amazon have hundreds of thousands of jobs open for drivers. But there’s a catch: they want temporary workers. In our current economic conditions, continued uncertainty results in an abundance of caution.
CA AB5 legal action called into question
Still, California Attorney General Xavier Becerra continues pushing legal actions against independent truckers in California, despite the fact that the preliminary injunction is still tied up in appeals court. On May 5th, 2020, Becerra also continued his pursuit against Uber and Lift, filing a suit alleging the ride-sharing companies have misclassified their drivers as contractors under the CA AB-5 provisions. The suit claims that Uber and Lyft deny workers the right to federally required employment benefits, including minimum wage, overtime pay, and unemployment and disability insurance.
While on the surface, it would seem reasonable for gig workers to embrace CA AB5, a growing number of gig workers are pushing back. With 33 million people on unemployment nationwide, businesses slashing budgets in every sector, and an unclear timeline for economic recovery, workers see the gig economy as a welcome relief and a best-of-both-worlds income stream. Taking gig work means the workers can keep earning while giving the businesses that employ them increased economic flexibility.
That is unless you’re in California. Moorlach, who had labeled CA AB5 as legally onerous last year, now calls the current enforcement morally reprehensible. He asserts that the measure denies workers their livelihood while making it harder for people who are sheltering at home to get the goods they need. Food and grocery delivery and online shopping have seen double- to triple-digit percentage increases in demand. Drivers, in particular, are busier than ever and are pushing back against AB5 enforcement.
The search for “out-of-the-box” answers
CA AB5 is not entirely without merit. As a staffing agency, we understand the value of and need for worker protection. Our drivers are family, and we treat them as such. The gig economy, while not an entirely new concept, has gained traction in recent years with the advent of new technologies. Like all new concepts, it will take time to iron out the rough spots.
In a recent statement, Uber CEO Dara Khosrowshahi said drivers should earn health-care benefits commensurate with the hours they work, and he has committed the company to rolling out a much more accessible benefits program for drivers. He has also pushed for a third classification of workers that is neither “employee” nor “contractor” to fill the legal language void caused by the explosion of the gig economy.
F|Staff: the CA-AB-5-proof choice
Here at F|Staff, we’ve tackled some of these challenges ourselves and come up with some groundbreaking solutions. Because we support both truck drivers and the carrier companies that hire them, we see both sides. Drivers want work-life balance, fair pay, and benefits. Business leaders need hiring flexibility and drivers they can trust. F|Staff has all of that in one app.
As the first gig-economy app for the trucking industry, F|Staff offers an alternative to the CA AB5 fight. As W2 employees, F|Staff drivers pass the ABC test. They receive unemployment benefits and can qualify for healthcare, sick pay, vacation, and other benefits. And carriers can use the app as little or as often as they’d like, knowing that qualified, DOT-verified, and background-checked drivers are just a few clicks away.
Get started with F|Staff
We may not be able to predict the results of the CA AB5 court challenges. However, we can offer solutions to keep the economy moving. Sign up with F|Staff, either as a carrier or a driver, and we’ll help you keep your wheels on the road. Signing up only takes a minute, and we’ll give you a call to walk you through the rest of the process.