LOS ANGELES (Reuters) – California trucking firms that haul every part from summer time strawberries to vehicles and Christmas toys say they’re underneath menace from a invoice that would flip so-called gig staff into staff.
Sandra Alzate, 51, vice chairman of a trucking firm, poses for a portrait in Los Angeles, California, September 10, 2019. Image taken September 10, 2019. REUTERS/Lucy Nicholson
California state senators late on Tuesday handed AB5, proposed laws that might set more durable requirements for figuring out which staff might be correctly categorized as unbiased contractors. Democratic Governor Gavin Newsom has signaled assist for the measure, which might take impact on Jan. 1.
The laws threatens to upend a swath of California companies that depend on freelance drivers. Whereas the highlight has been on ride-sharing firms Uber Applied sciences Inc (UBER.N) and Lyft Inc (LYFT.O), the trucking trade that underpins the U.S. agriculture, retail and industrial sectors can be closely uncovered.
“It’s going to hit all trucking corporations small and huge,” stated Joseph Rajkovacz, director of governmental affairs for the Western States Trucking Affiliation.
Trucking firms of all stripes name on the roughly 70,000 California unbiased massive rig house owners to haul masses within the state and across the nation.
Specialists say California’s principally small 137,000 trucking corporations are weak to upheaval wrought by AB5.
“We have now a number of peaks and valleys. It takes all the flexibleness away from us,” stated Invoice Aboudi, whose eight-truck firm serves the Port of Oakland.
Most drivers who ferry items to and from huge cargo ships on the port are unbiased, he stated.
“If no one can use them, we’re going to have a nightmare,” stated Aboudi, who employs seven drivers and stated switching to a distinct worker mannequin wouldn’t occur in a single day.
Los Angeles-based Sandra Alzate hires unbiased owner-operators when her clients, which embody Los Angeles Unified College District, have extra work than her four-truck firm can deal with by itself.
“I’m going to lose purchasers as a result of I can’t present the vehicles they want for his or her jobs,” stated Alzate, who already deliberate to speculate $400,000 on two truck upgrades and can’t afford to rent extra drivers or purchase extra rigs.
“I don’t suppose they perceive what the affect can be,” Alzate stated of AB5 supporters.
Proponents of the union-supported invoice say it might deal with employment abuses within the transportation trade, the place firms like Uber, XPO Logistics Inc (XPO.N) and trucking agency Swift Transportation Holdings Inc (KNX.N) have paid thousands and thousands of in time beyond regulation and wage claims to settle employee misclassification lawsuits.
Representatives from XPO and Knight-Swift didn’t reply to requests for remark. Oakland’s Aboudi stated he’s at present settling a misclassification lawsuit involving meal and relaxation breaks.
Reporting by Lisa Baertlein in Los Angeles; Enhancing by Matthew Lewis