The California Trucking Association (CTA) has filed a law suit challenging California’s new “gig worker” law, Assembly Bill 5 (AB-5) and has successfully blocked the law’s impact on truck drivers in the state, at least temporarily. U.S. District Court Judge Roger Benitez of California’s Southern District granted a temporary restraining order because AB-5 is preempted by Federal Aviation Administration Authorization Act of 1994 (FAAAA). California Trucking Association, et al, v. Attorney General Xavier Becerra, et al, 3:18 cv 2458-BEN-BLM (S.D. Ca.). As applied to the motor carrier context, AB-5, which took effect on January 1, 2020, provides a mandatory test for determining whether a person driving or hauling freight for another contracting person or entity is an independent contractor or an employee for all purposes under California law. Under AB-5’s test (the “ABC test”), an owner-operator is presumed to be an employee unless the motor carrier establishes each of three requirements: (A) the person 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; (B) the person performs work that is outside the usual course of the hiring entity’s business; and (C) the person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
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