A California court finally lifted the injunction which prevented the entry into force of a state law on the misclassification of workers – AB-5. The ruling is a huge win for California truckers and other misclassified workers.
Critics of the law say AB-5 prevents workers from making their own choices about their jobs and working conditions, hinders worker flexibility, and prevents an individual from being their own boss. Critics also claim these new regulations will negatively affect the country’s supply chain. None of these statements are true.
To understand what AB 5 does, you must first understand what an “independent contractor” really is.
Traditional “independent contractors,” such as consultants, photographers, freelance writers, and lawyers, are typically small business entrepreneurs who decide who they work for and how and when they perform their tasks. They also negotiate pay and working conditions for each freelance job. They tend to be white-collar professionals, well paid and not tied to a single employer.
That’s not the case with low-ranking “independent” truckers, Uber and Lyft drivers, FedEx delivery drivers, and other low-wage “entrepreneurs.” These workers are completely controlled by their employers and have no ability to negotiate working conditions, wages, or how and when they work.
By falsely claiming that their workers have “flexibility” and are “independent,” these same employers avoid paying minimum wages, health insurance, unemployment insurance, social security and other payroll taxes. It’s a scam. This is how companies pass operating costs on to their workers and to you, the taxpayer. We all end up paying so they can enjoy it.
Misclassifications are directly responsible for increasing income inequality and abusive working conditions, and this business model has exploded in businesses across the country.
The government deregulated the trucking industry 40 years ago, setting the stage for what we see today in the unorganized segment of the trucking industry – low-traffic employers who are responsible for the problems of supply chain but who take advantage of every loophole or lack of regulation to deny responsibility to their workers.
In the past few years alone, the California labor commissioner’s office has awarded more than $50 million to truckers who were cheated out of their pay through these misclassification schemes. Companies often see these rewards as the simple cost of doing business while making billions in profits on the backs of their workers.
According to Business Insidertruckers today work many more hours but earn up to 50% less than in the 1970s. An industry that was once heavily unionized and provided good middle-class jobs now has 40% zero health insurance and a median income of just $45,260.
This is why there is a shortage of 80,000 truckers in our country, although more than 10 million Americans hold commercial driver’s licenses (CDLs). There is no shortage of skilled truck drivers, there is a shortage of good, well-paying trucking jobs. In fact, most drivers leave the industry because it’s so hard to make a living.
During the pandemic, truckers and other supply chain workers were referred to as “heroes” and “essential” workers. Truckers don’t need to be put on a pedestal, they need to be paid and respected.
As a company, we need to look out for each other and treat workers the way we want to be treated. And if companies refuse to treat workers with respect, lawmakers must step in with more laws like AB-5 to prevent the continued erosion of employer responsibility for their employees.
Trucking companies and other greedy corporations cannot be allowed to use an “independent contractor” model to game the system, strip workers of their rights and protections, and mislead the public under the guise of freedom and autonomy. .
Policy makers need to be honest when determining why workers are losing ground and why there are unprecedented labor shortages. Elected officials must consider factors other than corporate profits when deciding what U.S. labor law should look like.
Lawmakers delivered in California with AB-5 and stood firm as the industry aggressively lobbied against it. The state will have to continue to work hard to enforce this new law. AB-5 is definitely a step in the right direction in California. But it’s a big country. There are thousands of miles of road and millions of workers who have won and deserve better.
Sean M. O’Brien is general president of the International Brotherhood of Teamsters
