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California governor expected to sign bill greatly restricting independent contracting

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California Governor Gavin Newsom has expressed his support for the Employee and Independent Contractors bill, better known as AB5, which was passed by state Senate on Tuesday. Many in the trucking industry are concerned that the bill, which sets test conditions for who can be defined as independent contractors, could effectively prevent trucking companies from contracting or leasing with small independent companies or owner-operators. (Associated Press: ERIC RISBERG)

California Governor Gavin Newsom is expected to sign a bill into law that could have a significant — and some fear devastating — effect on the trucking industry in that state.

On Sept. 10, the state Senate passed the “Employees and Independent Contractors” bill, or AB5 as it is more commonly referred. The law makes standard what is known as the ABC Test to determine whether a worker is an independent contractor or an employee.

The bill passed by a vote of 29-11 along party lines, with Democrats favoring the measure. According to reports, Newsom, a Democrat, has expressed he intends to sign the bill, which would go into effect Jan 1.

AB5 was designed to sharply define the definition of “independent contractors” in order to protect workers’ rights, according to the bill’s author, Democratic Assemblywoman Lorena Gonzalez of San Diego.

“It’s our job to look out for working men and women, not Wall Street and their get-rich-quick IPOs,” Gonzalez said.

AB5 was based on a California Supreme Court decision, Dynamex v. Superior Court of Los Angeles County, in April 2018. In that case, courier company Dynamex Operations West had reclassified its employees as independent contractors in order to cut costs. The workers sued and the court ruled in their favor, determining that they should be classified as employees, based on what is known as the ABC Test.

The test uses a three-pronged set of criteria that presumes a worker must be considered an employee unless the employer can prove:

  • That the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
  • That the worker performs work that is outside the usual course of the hiring entity’s business; and
  • That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

There is no nationally recognized definition delineating between independent contractors and company employees. Each state sets its own criteria for determining independent contractor status. The ABC Test is applied to varying degrees in at least 28 states.

In Massachusetts and New Jersey, the test is used across the board to determine who can be classified as independent contractors. In many other states, the ABC Test is used all or in part, and is applied to specific industries and to specific labor laws pertaining to subjects such as wages and unemployment.

Prior to the Dynamex case, California used an 11-point standard that had been in place since 1989 to determine employee or contractor status. In the Dynamex case, the court used Massachusetts’ application of ABC as a template. That model was also the one used in AB5.

California’s prior standards focused on an employers’ control over a worker to determine contractor status. It allowed for flexibility and was “complicated, expensive, and prone to litigation,” according to the state Senate analysis of AB5. By contrast, The ABC test operates on a premise that all workers should be considered employees unless they can meet all three standards.

Much of the impetus behind AB5 was to take aim at businesses that unfairly use independent contractor status as a way to cut costs at the expense of workers. Many of these companies, such as Dynamex, are part of what is referred to as the growing “gig economy.” Some of the most notable examples in recent years of platform-based companies where workers’ status as an employee or a contractor have been a point of contention have been ridesharing companies like Uber and Lyft, or food-delivery services like GrubHub and DoorDash.

Businesses that rely on independent contractors are free from labor standards such as minimum wage and overtime. They don’t have pay payroll taxes and insurance costs, nor do they pay into Social Security or Medicare for contractors.

According to one industry estimate, classifying a gig worker as an employee can cost a company up to 30% more than classifying them as a contractor.

While the Dynamex decision applied only to rules governing minimum wages, overtime and guaranteed breaks, AB 5 also pertains to workers’ compensation, insurance, and paid time off.

While the good intentions of AB5 are clear, opponents of the bill argue that it is too sweeping, that it doesn’t differentiate between the businesses that abuse the independent contractor status and industries that traditionally rely on the use of independent contractors, most notably the trucking industry.

Some in trucking fear the ABC standards would effectively end the ability for large trucking companies in California to lease to or contract with small carriers or independent owner-operators.

The key problem with ABC when it is applied to trucking is with the “B prong,” the one that says a company cannot hire an independent contractor to perform work that is a normal part of the hiring entity’s business.

In other words, a company whose business is to carry freight cannot contract a smaller company or an individual owner-operator to carry freight with them without making them a full employee.

In addition, the drivers or small carrier being contracted would have to meet the “C prong,” which is to be able to show that they are independently established businesses that provide trucking services to other companies. This not considered nearly as big a hurdle as the B prong.

It should be noted that many states that have looked to the ABC Test as a model for their own standards chose to do without the B prong.

AB5 passed the state Assembly in May, also pretty much along party lines, and has been a hot topic in California all summer.

Representatives of the trucking industry, including the California Trucking Association and the Western States Trucking Association, have led opposition to the bill.

“There is no reason why protecting workers does not include defending the right of tens of thousands of drivers who have built their businesses around the independent owner-operator model, invested hundreds of thousands of dollars in their trucks and have operated their own businesses for decades,” said Shawn Yadon, CEO of the CTA, in a press release.

There are more than 130,000 trucking companies in California, and as in the rest of the nation, most of them are small fleets or individual drivers. As people throughout the industry can foresee catastrophic repercussions if suddenly none of them can get contract work — to them, to the larger companies that normally would contract them, and to the industries they serve, such as agriculture.

Some state lawmakers expressed concern with the potential upheaval AB5 could cause as it moved its way toward approval.

A few industries managed to have exemptions for themselves included into the legislation. Trucking, however, was not among them, despite efforts by industry representatives, testimony by members of the industry and organized protests.

Even Gonzalez, the bill’s author, has expressed her openness to making adjustments, including possible exemptions, to AB5 in the future.

But that sort of thing takes time. Newsom has until October 13 to sign the bill, but he is not expected to wait, which means that at least for a while, California’s trucking industry stands poised to be an unwilling test case as other states and Congress, which is considering legislation based on ABC, wait to see what happens.

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3 Comments

3 Comments

  1. Marcel Saiu

    September 13, 2019 at 10:36 pm

    what a dumb ace governor
    they are looking to get rid of the owner operator independent contractor so the large carriers can do all jobs with driver employees paid 4 less

    • Marcel Saiu

      September 13, 2019 at 10:40 pm

      of course more tax revenue for California and more profits to big trucking that uses employee drivers
      welcome to socialism!
      say bye bye middle class!
      what a crooks

  2. Pat Lanza

    September 15, 2019 at 2:11 pm

    Uber Lyft Trucking companies have to pony up and treat workers fairly !!

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The Nation

39 people found dead in truck container in southeast England

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Police officers attend the scene after a truck, in rear, was found to contain a large number of dead bodies, in Thurrock, South England, early Wednesday October 23, 2019. Police in southeastern England said that 39 people were found dead Wednesday inside a truck container believed to have come from Bulgaria. (Associated Press: ALASTAIR GRANT)

LONDON — Investigators were trying to piece together the movements of a large cargo truck found Wednesday containing the bodies of 39 people in one of Britain’s worst people smuggling tragedies.

Details about the victims, including where they were from, were scarce. Police in southeast England said they have not been identified — a process they warned would be slow.

The truck’s driver — a 25-year-old man from Northern Ireland — was arrested on suspicion of murder. He has not been charged and his name has not been released.

He and other drivers who may have been at the wheel before him would have taken advantage of the European Union’s generally open borders to travel in several countries without border checks. Britain remains an attractive destination for immigrants, even as the U.K. is negotiating its divorce from the EU.

In Parliament, Prime Minister Boris Johnson put aside the Brexit crisis, at least for a few minutes, and vowed that the people traffickers would be found and prosecuted to the full extent of the law.

“All such traders in human beings should be hunted down and brought to justice,” he said.

Ambulance workers discovered the bodies after being called at 1:40 a.m. to a truck on the grounds of the Waterglade Industrial Park in Grays, 25 miles (40 kilometers) east of London on the River Thames. It was unclear who called the ambulance service.

No cause of death has been made public. Police said one victim appeared to be a teenager but gave no further details.

Police initially said the cargo truck had traveled through Ireland and then to Wales via ferry. But Essex police later said they believe the container with the people inside went from the port of Zeebrugge in Belgium to Purfleet, England, where it arrived early Wednesday. Police said they believe the tractor unit traveled from Northern Ireland and picked up the container unit.

“This is a tragic incident where a large number of people have lost their lives. Our inquiries are ongoing to establish what has happened,” Essex Police Chief Superintendent Andrew Mariner told reporters.

The cargo truck had a Bulgaria registration, Bulgaria’s Foreign Ministry said in a news release. But Bulgarian authorities said they could not yet confirm that the truck had started its journey there. The Foreign Ministry said the Swedish-made “Scania” truck was registered in the Bulgarian Black Sea port city of Varna to a company owned by a woman from Ireland.

“We are in contact with our embassy in London and with British authorities,” Foreign Ministry spokeswoman Tsvetana Krasteva said.

The number of victims was shocking, although it has become sadly common in recent years for small numbers of migrants to occasionally be found dead in sealed vehicles after having been abandoned by traffickers.

The tragedy recalls the death of 58 migrants in 2000 in a truck in Dover, England, and the deaths in 2015 of 71 migrants from Syria, Iraq and Afghanistan who were found suffocated in the back of a refrigerated truck that was abandoned on an Austrian highway close to the Hungarian border.

It seems likely the traffickers shunned the most popular English Channel route from Calais, France, to Dover, England because of increased surveillance at those ports and instead chose a more circuitous route.

Dover and Calais, which have been under pressure from human traffickers for years, have sniffer dogs, monitors and more advanced technological surveillance due to the fact that they are the endpoints for the Channel Tunnel between France and Britain.

Groups of migrants have repeatedly landed on English shores using small boats for the risky Channel crossing, and migrants are sometimes found in the trunks of cars that disembark from the massive ferries that link France and England, but Wednesday’s macabre find in an industrial park was a reminder that trafficking gangs are still profiting from the human trade.

“To put 39 people into a locked metal container shows a contempt for human life that is evil,” lawmaker Jackie Doyle-Price, who represents the region in parliament, told Parliament.

The National Crime Agency said its specialists were working to “urgently identify and take action against any organized crime groups who have played a role in causing these deaths.”

It said in May that the number of people being smuggled into Britain via cargo trucks was on the rise.

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The Nation

CDL Meals forms partnership with American Association of Owner-Operators

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CDL Meals offers a variety of organic chef-prepared meals that help drivers make healthy eating choices while on the road. (Courtesy: CDL MEALS)

ANAHEIM, Calif. — CDL Meals, the division of Fresh n’ Lean focusing on healthful meal options for professional truck and bus drivers, has formed a partnership with the American Association of Owner Operators (AAOO).

CDL Meals offers a variety of organic chef-prepared meals that help drivers make healthy eating choices while on the road.

“We could not be more excited to launch our first healthy-eating alliance with AAOO,” said Bob Perry, director of CDL Meals. “We believe that people working in all industries deserve to live a healthy lifestyle and have access to the tools they need to ensure overall wellbeing, despite industry standards and limitations. CDL Meals has already made a positive impact on drivers and through this partnership, more operators can benefit from the quality meal plans.”

The American Association of Owner Operators is a nationwide organization dedicated to providing professional truckers and small fleet owners with the latest technology, benefits and assistance to advance in today’s trucking industry.

Perry said through the partnership, members of the AAOO will have access to CDL’s seasonal menus, free nationwide delivery and the promise of fresh, affordable meals on the road.

“We are so thankful the team at Fresh n’ Lean saw an opening to help improve the wellbeing of those in the trucking industry,” said David Huff, CEO of AAOO. “We are committed to helping drivers stay safe while out on the road so they can get back home to their family and friends. “Good nutrition is the most important part of staying healthy and staying healthy is a huge factor in staying safe. That’s why we are so excited to partner with CDL Meals and provide great tasting meals at an affordable price to our members.”

Perry said CDL Meals is a service formulated especially for commercially licensed drivers to deliver chef-prepared food items anywhere within the U.S. using organic ingredients to create balanced, wholesome meals. Each menu option consists of a combination of protein, healthy carbohydrates, and vegetables. All meals are delivered fresh and can be refrigerated for up to seven days. The vacuum-sealed trays can be heated quickly and enjoyed at any time.

Along with the meals, each purchase comes with a 14-page driver wellness education booklet that includes dietary tips, an exercise plan, and suggestions to improve overall health through simple lifestyle changes.

For more information on CDL Meals, visit www.cdlmeals.com.

For more information on AAOO, visit https://aaofoo.com

 

 

 

 

 

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NHTSA: Overall traffic fatalities in 2018 decline 2.4%, 2019 drop likely

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NHTSA said the fatality rate per 100 million vehicle miles traveled decreased by 3.4 percent (from 1.17 in 2017 to 1.13 in 2018), the lowest fatality rate since 2014. (Associated Press)

WASHINGTON — The National Highway Traffic Safety Administration Tuesday released highway crash fatality data for 2018, showing a 2.4% decline in overall fatalities, the second consecutive year of reduced crash fatalities.

“This is encouraging news, but still far too many perished or were injured, and nearly all crashes are preventable, so much more work remains to be done to make America’s roads safer for everyone,” said U.S. Transportation Secretary Elaine L. Chao said.

The data, compiled by NHTSA’s Fatality Analysis Reporting System (FARS), shows that highway fatalities decreased in 2018 with 913 fewer fatalities, down to 36,560 people from 37,473 people in 2017. The fatality rate per 100 million vehicle miles traveled also decreased by 3.4 percent (from 1.17 in 2017 to 1.13 in 2018), the lowest fatality rate since 2014.

The 2018 FARS release also clarifies previously released data on large trucks involved in fatal crashes. NHTSA reexamined supporting material and reclassified several light pickup trucks to an appropriate large truck category (10,000 lbs. gross vehicle weight ratings (GVWR). As a result, the 9% increase in large-truck-related fatalities reported for 2017 has been revised to 4.9%. For 2018, large-truck related fatalities increased by 0.9 percent. The details of the scope of the changes are documented in the 2018 fatal motor vehicle crashes overview research note.

No data was available on Class 8 tractor-trailer combinations.

Other findings from the 2018 FARS data include:

  • Fatalities among children (14 and younger) declined 10.3%
  • Alcohol-impaired-driving fatalities declined 3.6%
  • Speeding-related fatalities declined 5.7%
  • Motorcyclist fatalities declined 4.7 percent.

“New vehicles are safer than older ones and when crashes occur, more new vehicles are equipped with advanced technologies that prevent or reduce the severity of crashes,” said NHTSA Acting Administrator James Owens said. “NHTSA has spent recent years partnering with state and local governments and safety advocates to urge the public to never drive impaired or distracted, to avoid excessive speed, and to always buckle up.”

Jonathan Adkins, executive director of the Governor Highway Safety Association (GHSA) said the organization was pleased to see the 2018 decline and the estimated 3.4% dip thus far in 2019.

“A decline in 2019 would mark three straight years of fewer fatalities despite a strong economy, which typically correlates with increased traffic deaths,” he said. “However, the only acceptable level of deaths is zero, and we will not rest until that is achieved.”

Adkins said GHSA was glad to note progress in reducing alcohol-related, speeding-related and motorcyclist fatalities in 2018.

“The tremendous investments made today in highway safety have been beneficial, but clearly not commensurate with the need,” Adkins said. “GHSA is committed to working with our partners in the federal government, advocacy community and at the state and local level to accelerate the momentum toward zero deaths on our nation’s roadways.”

NHTSA said the projected 2019 decline translates to an estimated first-half 2019 fatality rate of 1.06, the lowest first-half level since 2015. The estimates for the second quarter of 2019 represent the seventh-consecutive year-over-year quarterly decline in fatalities, starting in the last quarter of 2017.

NHTSA is identifying opportunities to leverage its resources and collaborate with modal partners within USDOT to reduce fatalities among pedestrians and pedalcyclists (bicyclists and riders of two-wheel, nonmotorized vehicles, tricycles, and unicycles powered solely by pedals), among whom 2018 fatalities unfortunately increased by 3.4% (to 6,283) and 6.3% (to 857), respectively.

With the release of the 2018 and 2019 data, NHTSA also introduced its new Fatality and Injury Reporting System Tool (FIRST), a modernized crash query tool that lets users not only query fatal crash data but also generate estimates of crashes and people injured in crashes. The upgraded functionalities in the new tool include generating multi-year trends, estimates of alcohol involvement, and charting/tabulation/mapping of query results. The tool, along with instructions on its usage, can be accessed here.

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