California truckers are preparing to face the effects of a new state law that could threaten up to 70,000 jobs.
The law, which will take effect on Jan. 1, will attack the so-called gig economy. In other words, it will affect jobs that are offered for one-time jobs.
The law will reclassify many independent contractors as employees affecting approximately 1 million jobs.
While Democrats, who have pushed the legislation, argue that this will prevent workers from being misclassified, the announcement has provoked strong reactions from various sectors.
Carpool drivers, delivery couriers, and other related workers will also be classified as employees. In other words, companies like Lyft and Uber would be forced to pay independent contractors as employees.
The law will eventually affect owner-operator truckers who own their own trucks and take jobs from different companies to determine their own schedules and negotiate better wages.
An owner-operator is someone who essentially runs a trucking business. They provide and maintain their own trucks, pay for their own fuel, and often have their own drivers.
These owner-operators often make their own schedules as well, enjoying more freedom and flexibility.
This business model is also beneficial to the company as it reduces capital expenditures, such as the cost of buying more trucks.
However, with the new regulations, trucking companies will have to hire these owners as employees or they will not be able to work with them directly.
That’s why both parties have said they are happy with the current workflow and are concerned about the impact of the law on their businesses.
The California Trucking Association filed a lawsuit to prevent the measure from being implemented in early November because it would seriously restrict the activities of independent owner-operators. The institution said that 70,000 jobs could be eliminated in the state.
The controversial legislation has affected many other areas including hundreds of writers from the SB Nation sports site which have already been fired ahead of the new law.