California Assembly Bill 5 TLC Companies
TLC Companies Compliance Services Brooklyn Center MN

AB5 In California

You’ve probably heard about AB5 in California. AB5 (California Assembly Bill 5) requires companies to reclassify many independent contractors as employees.  The U.S. Supreme Court recently refused to hear a challenge to AB5 from the California Trucking Association. There may be other challenges, but the ruling could mean the end of the owner-operator model in the state.  TLC Companies can help you figure out AB5 and other confusing regulations and rules.

How AB5 Defines an Independent Contractor

AB5 uses the ABC Test, which has three parts:

  • A: The worker is free from the control and direction of the hiring entity in connection with the work’s performance, both under the contract for the performance of the work and in fact.
  • B: The worker performs work that is outside the usual course of the hiring entity’s business.
  • C: The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

It’s part B of the ABC test that affects you. Part B makes it nearly impossible for independent drivers to work for a transportation company.

How Do We Help?

We know you’re wondering what to do about this. We have the answer. When you partner with TLC, we become the employer of record for the drivers who work for you.  Because we are the employer of record, you’re in the clear. We are a full-service administrative employer, not a transportation company. This means you comply with AB5 when you work with us.  We also make sure you follow all other labor laws and regulations — whether you’re in California or any other state. We have years of experience at the state and federal levels. It’s peace of mind you can’t get doing it all on your own.

 

Discover how we can help you with compliance.

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