The Future with AB5

August 05, 2022

By Jeff Nadeau

There is a lot that can be said about AB 5 (Gonzalez), the California rule that greatly restricts independent contractors. We are now one month beyond the United States Supreme Court’s decision not to hear the arguments related to CTA v Bonta, that Federally defined Motor Carriers should be exempt from the rule. Have we seen regulators initiating audits of movers to check if independent contractors are actually “misclassified employees” as the author, California Legislature, and Governor believe? No, we have not! Have we heard of private attorneys soliciting independent contractors to create class action groups to litigate the issue? No, we have not!


If you are looking for more information on California rules related to Borello, ABC, and the B-to-B exemption to the rule, laid out in AB 2257 (Gonzalez), look to the California Moving and Storage Association (CMSA). All of these rules are laid out in CMSA’s July Communicator. CMSA has been on the front line of opposing this issue, supporting initiatives and litigation, lobbying in opposition to AB 5 and in support of B-to-B exemptions in AB 2257, and educating on this issue.


What we do know is that contractors want to remain independent businesses. We hear this regularly from independent contractors with whom we engage and even from driver groups on social media. Independent truckers have created havoc at California ports, making an already fragile supply chain choke point even more challenged.


While AB 5 passed through the California Legislature in 2019 and became law on January 1, 2020, it is still untested law. Therefore, any path forward other than a pure employee model is not without risk. Still, California is the fifth largest economy in the world, and challenging to ignore.