Truckers Misclassified as Independent Contractors Seek Benefits Amid COVID-19 Challenges

Despite ongoing legal battles regarding California truck drivers misclassified as independent contractors, unemployed truckers may eventually qualify for unemployment.

With layoffs hitting record numbers because of COVID-19, truck drivers are feeling the pinch. Independent contractors are not considered employees under labor laws, which means they do not receive unemployment benefits or health insurance, nor do they receive three days of California’s mandated paid sick time.

Assemblywoman Lorena Gonzalez, D-District 80, was a lead author of Assembly Bill 5 (AB 5), which seeks to correct worker misclassifications. When employees are misclassified as independent contractors, they lose out on all the benefits that come with being an employee at a company. Truck drivers and gig economy workers such as rideshare drivers were among the people AB 5 was designed to help. As employees, workers are entitled to worker protections that include unemployment insurance, disability insurance and workers’ compensation.

By misclassifying workers as independent contractors, the state of California has lost about $7 billion each year in payroll taxes, according to the Los Angeles Times.

Gonzelez has asked the Employment Development Department of California’s Labor and Workforce Development Agency to extend unemployment benefits to truck drivers misclassified as independent contractors without delay.

AB 5 Meant to Aid Truck Drivers Misclassified as Independent Contractors

An April 2018 California Supreme Court decision led to the creation of the ABC test, a three-question test to determine a worker’s status as either an employee or an independent contractor. The ABC test became law with the passage of AB 5.

The ABC test includes the following questions:

• Is the worker free from the direction of the hiring company?
• Does the worker perform work outside the usual course of the hiring company’s business?
• Does the worker perform the work “in an independently established trade, occupation, or business of the same nature” as the work they perform for the business that hired them?

If the answer to any of the above questions is “no,” then the workers must be considered an employee.

“I authored AB 5 precisely for the moment we are in now,” wrote Assemblywoman Gonzalez in a letter she sent to Gov. Gavin Newsom and the labor secretary, according to the Sacramento Observer.

She went on to say that “the EDD has the authority and legal framework to aggressively address misclassification and provide these workers with the benefits they deserve.”

On March 15, the state of California asked for the lifting of a preliminary injunction against AB 5 covering the state’s trucking businesses.

The request was made to the Court of Appeals for the 9^th Circuit because the California Trucking Association was granted an injunction against complying with AB 5, arguing that the law was preempted by the Federal Aviation Administration Authorization Act (FAAAA).

According to Freightwaves.com, the state attorney’s general office turned the argument in its favor by saying “AB 5 and its ABC test are the type of generally applicable background labor regulation that this Court has consistently held is not preempted by the FAAAA.”

AB 5 does not prohibit the hiring of independent contractors, but does prohibit companies from misclassifying workers who really are employees.

If, for example, a restaurant owner had a clogged sink, he could call a plumber, who would be considered an independent contractor in such a situation.

Here is how the plumber meets the AB 5 ABC criteria:

• The restaurant owner is not providing direction to the plumber or controlling his work load.
• The plumber performs work that is not associated with normal restaurant duties.
• The plumber works in an independently established field of trade.

Attorneys who appealed to the Ninth Circuit to lift the injunction expressed fears that misclassified workers who are without employee benefits will be less able to receive adequate health care during the coronavirus outbreak. Such workers will push to go to work when they are sick, potentially placing themselves and the public at great risk.

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If you have worked as a contract truck driver and believe your carrier has failed to pay you minimum wage or overtime, or otherwise might not have honored a contract with you, you may qualify to file a truck driver lawsuit or class action lawsuit.

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