California Assembly Bill 5 – AB5
On September 10th, California Assembly Bill 5, otherwise known as AB5, was approved by the state senate and signed into law. Coming into effect January 1st, 2020. AB5 may result in a handful of companies that hire independent contractors to reclassify these as employees.
Leave AB5 and all your worries behind and relax with us, we’ve got it handled.
For 50 years we have been doing medical pickups and deliveries using employees in California. We already have the systems, the efficiency to maintain competitive pricing, a fleet of over 50 of our own fuel-efficient hybrid vehicles, and 24×7 employee backup drivers.
Our track record is proven to provide our customers with on time pickups and deliveries, professional drivers providing excellent customer service, and a dispatch staff that will ensure your service is completed promptly and courteously within the time frame you require. Our fleet of hybrid vehicles ensures we are doing our part to keep the air clean and provides our couriers with low maintenance and professional looking vehicles.
We do all of this and continue to offer very competitive prices throughout California.
Relax, we have you covered.
What is AB5 and how does it affect you?
For existing companies, this means that they now must use a three-pronged test, known as ABC to determine whether their workers are legally classified as contractors or employees. This is as follows:
- The worker can perform services without control and or direction from the company
- The worker is performing tasks outside the usual direction and course of the company’s usual activities
- The work is customarily involved in an independently established occupation, trade, business, or line of that is the same nature of the line of work performed
In the great debate which will surely drag on for months if not years pitting truck drivers, Uber/Lyft, and the various high profile food delivery services against the unions and the government, things can sure get confusing. Therefore, we have put together this quick and easy to read article to help you along your way – here’s what you need to know about AB5 and how it may affect your business.
To understand how AB5 was introduced, we first need to take a step back and see how exactly it came across.
Not so long ago, a driver at a national package, and document delivery service opened a lawsuit claiming the company had misclassified him, as well as all other drivers to the company as independent contractors, when in fact they were supposedly employees.
This lawsuit proved the company was in violation of the California Industrial Welfare Commission Wage Order Number Nine which looks over and governs the transportation industry, imposing minimum wage, set hours, and meal and rest periods for workers.
Consequently, this then resulted in the creation of the ABC test for companies to establish whether their workers were independent contractors or alternatively employees.
Who does this affect?
As The Verge mentions, AB5 will most notably affect popular gig companies such as Uber and Lyft. However, this does not just affect independent companies such as Uber, this also has impacts upon couriers and other businesses alike. Therefore, any company which hires independent contractors will need to verify they are in fact independent and not being passed through a loophole to prevent the classification of employment, verified via the ABC test.
This is only the beginning for drivers
Despite the lawsuit of the one driver winning the suit, this isn’t exactly a win, win situation for everyone. In fact, it’s far from ideal.
For drivers, in particular, there is still a tough road ahead. Drivers are obliged by various arbitration clauses that force them to take up their complaints regarding both labor and employment behind closed doors, therefore, preventing them from joining any class action lawsuits – as we imagine drivers would unite and tackle this issue together.
Likewise, drivers cannot form a union because they are still considered contractors under federal law…
While it may all be in the air at the moment, with no two drivers knowing exactly what is going on, the AB5 could be exactly what drivers need. Pay for drivers will most likely increase if they are deemed employees, they should receive inclusive and welcoming benefits, and most importantly there health and welfare should no longer be at stake.
Nevertheless, there is still a long road ahead of us…
The bottom line
The California Assembly Bill 5 was passed and approved by the state senate of California on September 10th, which will be implemented on the 1st of January 2020.
For companies this may result in a reality check, are you hiring individual contractors or are they actually employees? A new three-pronged test known as ABC will be used to determine which classification these workers fall into.
While everything is supposedly all in the air at the moment, and even with Uber refusing to cooperate with AB5, eventually we may see some considerable change to drivers of all kinds, including medical drivers finally being considered employees or alternatively treated in a fair and respectable manner which does not interfere with their health and welfare.
To finish, we would just like to say we at Medical Couriers are not affected by the California Assembly Bill 5 as we already have the systems in place, and our workers classified as employees – helping you continue your business needs while we deal with the off the road, up in the air confusion that is the AB5 currently.