Heavy Duty Trucking Logo
MenuMENU
SearchSEARCH

Is California Trying to Kill the Independent Contractor Model? [Commentary]

Instead of focusing on companies that abuse the independent contractor model to avoid paying employee benefits, California has decided to do away with independent contractors as a regular part of operations at all.

Deborah Lockridge
Deborah LockridgeEditor and Associate Publisher
Read Deborah's Posts
September 30, 2019
Is California Trying to Kill the Independent Contractor Model? [Commentary]

Instead of focusing on companies that abuse the independent contractor model to avoid paying employee benefits, California has decided to do away with independent contractors as a regular part of operations at all.

Credit:

Pixabay

3 min to read


I always hated it when one of my daughter’s elementary school teachers would keep the whole class in for recess because a few obnoxious kids were acting up. And that’s just what California has done — albeit with far more devastating consequences — with sweeping new legislation that passed shortly before this issue went to press.

Ad Loading...

Instead of focusing on companies that were abusing the independent contractor model to avoid paying employee benefits, the state decided to pretty much do away with the ability to use independent contractors as a regular part of your operations at all — unless you work in an industry that got a specific carve-out in the bill, such as freelance writers, travel agents, and hairstylists.

Assembly Bill 5, which has been signed by the governor, codifies into law — and expands — last year’s Dynamex California Supreme Court decision. It does away with most of the traditional methods of determining whether someone is truly an independent contractor or really an employee, such as the worker’s amount of risk and investment in his or her business, in favor of an ABC test.

Ad Loading...

The big problem with the ABC test is the “B” prong, which states that to be considered an independent contractor rather than an employee, the worker must perform “work that is outside the usual course of the hiring entity’s business.”

Deborah Lockridge, HDT Editor in Chief

Credit:

HDT File Image

In other words, if you’re in the business of hauling freight, you could contract with someone to paint your building or do your taxes, but you can’t use an independent contractor to haul freight.

There is little doubt that there are some trucking companies that have abused the independent contractor model, as highlighted in what the industry criticized as a lopsided USA Today report in late 2017.

However, California legislators opted to take a broad-brush approach in banning the use of independent contractors rather than directly addressing the abuses.

“The sins of the few have been extrapolated to the many, and that’s unfair,” Joe Rajkovacz, director of governmental affairs for the Western States Trucking Association, told me.

Ad Loading...

The California Trucking Association tried to work with the legislature to amend the bill so it would address the worker misclassification issue but still allow legitimate trucking owner-operators, including requirements for operating authority, ownership of vehicles, exclusivity, and transparency about pay — to no avail.

CTA CEO Shawn Yadon told me the final bill does not distinguish between a driver who’s acting as an independent contractor under a truck lease-purchase program with a motor carrier (where many of these abuses have occurred), and one who owns his or her own truck outright. “It virtually destroys the independent contractor model for trucking,” he said.

If you think this doesn’t matter to you because you don’t operate in that crazy California, think again. Other states have made efforts to curb what is seen as employee misclassification. New Jersey already has adopted the ABC test, although so far not as broadly as California. New Jersey Motor Truck Association Executive Director Gail Toth told me that agencies such as the Department of Labor are already using the ABC test, and the state has “fast-tracked changing rules and legislation similar to California.”

And it could become an issue in Washington, D.C., as well. A number of Democratic presidential candidates, including Bernie Sanders, Kamala Harris, and Elizabeth Warren, supported AB5.

Many of our largest and most successful trucking companies wouldn’t be here today if they hadn’t started out as a one-truck owner-operator. It’s part of the American Dream. And while employee misclassification abuses have the potential to turn that dream into a nightmare, California legislators are the ones who need to wake up and do the hard work needed to address the bad dreams without taking away the good.

Subscribe to Our Newsletter

More Fleet Management

Red Kodiak-branded autonomous tractor with Charger-branded trailer backed up to warehouse
Fleet Management•October 30, 2026

Kodiak Lines Up Fleets for Driverless Trucking

An agreement for 75 trucks, a new Texas freight lane, and progress on safety validation move Kodiak closer to its planned driverless highway launch.

Read More →
Illustration with Star of David and EEOC logo
Fleet Management•by News/Media Release•October 28, 2026

ITS Logistics Settles Religious Harassment Case

The Nevada-based logistics firm agreed to pay more than $396,000 to settle a religious harassment charge involving an employee's Jewish identity.

Read More →
Truck on divided interstate highway driving toward sunrise
Fleet Management•October 27, 2026

Your Trucks Are Busy. That Doesn’t Mean They’re Winning.

High utilization doesn’t always mean strong margins. Looking beyond the current load can help fleets make better dispatch decisions and get more value from each truck’s time.

Read More →
Ad Loading...
ATA economist Bob Costello speaking beside a graph showing truckload operating costs rising as freight revenue per mile declined after 2022.
Fleet Management•by Deborah Lockridge•October 22, 2026

Why This Trucking Recovery Is Different

Freight demand remains sluggish, but rising costs and tougher enforcement have taken enough capacity out of the market to change the outlook for motor carriers.

Read More →
PS Coach tablet interface showing a driver’s coaching inbox, safety event video and coaching advice for a harsh-braking event.
Fleet Management•by News/Media Release•October 21, 2026

Platform Science Adds Dispatch and Safety Tools

Four additions to PS Fleet help fleets monitor loads, manage driver coaching, share truck locations and adjust video system settings.

Read More →
Screen capture showing PrePass Intelligence data on tolls
Fleet Management•by News/Media Release•October 21, 2026

PrePass Intelligence Mines Fleet Bypass, Toll and Safety Data

PrePass Intelligence helps fleets measure bypass savings, flag potential toll overcharges, and spot suspicious transactions by combining data from separate systems.

Read More →
Ad Loading...
Computer screen showing examples of what fleets could ask Motive AI Agents to do
Fleet Management•by Staff•October 20, 2026

Motive Adds AI Agents for Fleet Operations

New tools automate follow-up on fleet data, from maintenance work orders to driver alerts, with two-way voice conversations planned for later this year.

Read More →
Graphic art with a heavy-duty tractor trailer and a work truck with the words "trivia lunch"
Fleet Management•by Lauren Fletcher•October 19, 2026

Can You Beat Our Trucking Trivia Challenge?

Test your truck knowledge with 19 trivia questions from Heavy Duty Trucking Exchange. Can you keep up with the fleet pros?

Read More →
Four horizontal and two vertical video screens show different aspects of BeyondTruck's new compatibility engine
Fleet Management•by Deborah Lockridge•October 19, 2026

BeyondTrucks Adds Rules Checks to Dispatch

New Compatibility Engine checks driver qualifications, equipment requirements and fleet policies before loads are dispatched.

Read More →
Ad Loading...
Gloved hand fueling a truck beside a graphic listing ATRI’s top three trucking concerns for 2026: fuel prices, lawsuit abuse reform and CSA.
Fleet Management•by Deborah Lockridge•October 19, 2026

Diesel Prices Hijack Trucking’s Worry List

ATRI’s annual survey finds cautious optimism about freight, but diesel costs, litigation, and insurance continue to squeeze fleets. Drivers have different priorities on several issues.

Read More →