Trucking News: What’s the Status on Owner-Operators in California?


Currently there are competing bills in California state legislature that are aiming to address an April 2018 ruling by the state’s Supreme Court that has threatened the traditional owner-operator model within the state. The bills are pointing to trucking groups wanting to upend years of law used to decide if a worker is an employee or an independent contractor.

Independent contractors make up a large portion of the transportation industry workforce in California. These independent contractors are mostly truck driver owner-operators and the major concern has to do with benefits truck drivers feel they are owed as well as being determined full-on employees.

The Ruling

On April 30 of 2018, the class action lawsuit produced an “ABC test,” or an assessment designed to strictly outline who can be classified as a contractor within the state. This will not only effect truck drivers, but virtually all who work in the growing gig economy (think delivery drivers, ride-sharing employees, etc.). The new standardized testing determines that a worker is an employee under the wage orders unless the hiring company establishes all three of these factors:

  • The worker is free from the control and direction of the hirer in connection with the performance of the work
  • The worker executes work outside the usual course of the hiring entity’s business
  • The worker is engaged in an independently established trade of the same nature as the work performed for the hiring entity

Essentially, the test assumes almost all workers are employees and eligible for the wide protections of California wage laws including overtime pay, meal breaks and minimum wage.

Another benefit workers are vying for are insurance options. From dental to medical, independent contractors are looking for the right coverage, especially given the dangerous nature of the trucking business. And while this is something that is still being volleyed back and forth by the court system in California, trucking companies can invest in commercial truck insurance to provide their own protection.

Having commercial truck insurance will help provide trucking companies with the protection needed to financially safeguarded against injuries drivers sustain on the job.

Gaining Opposition

The Western States Trucking Association has been looking at the idea of legality of the entire trucking industry in the state. The association pushed for a lawsuit filed earlier this past year against California over potential enforcement of the new ruling.

Western States has argued that the ruling violates federal law governing interstate transportation. The group is hoping for a long-term solution to the issue, to push the state legislature to act and correct the court’s decision to require testing.

The California Chamber of Commerce is also working to limit the effect of the ruling, especially since some of its members include trucking companies. The chamber has put together rallies at the state capital in Sacramento supporting workers’ right to choose to operate as independent contractors. Some motor carriers are considering changes to their operations after the ruling as well by turning over hiring to a brokerage firm for example.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates and coverage changes.