California’s new gig-economy law does not apply to the thousands of independent truck drivers in the state because the controversial measure is preempted by federal law, a Los Angeles County Superior Court judge has ruled.
The state law, known as Assembly Bill 5, or AB 5, was intended to curb businesses’ use of independent contractors by establishing a test that effectively makes it harder for companies to claim that workers are independent contractors instead of employees who are entitled to legal minimum-wage rates and benefits such as workers’ compensation.
Two years ago, Los Angeles City Atty. Mike Feuer sued three port trucking companies owned by NFI Industries, alleging that the businesses exploited their drivers by misclassifying them as independent contractors and making them absorb thousands of dollars in costs that should be borne by employers.
Ruling in that case, Judge William Highberger wrote Wednesday that owner-operator truck drivers should not be reclassified as employees under AB 5 — or under the so-called Dynamex court decision on which AB 5 is based — because those developments are preempted “by an act of Congress.”
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