California truckers prepare for new rules for "concert workers"

LOS ANGELES (Reuters) – California trucking companies that carry everything from summer strawberries to cars to Christmas toys say they are threatened by a bill that could turn the so-called stage workers into employees.

Senators from the state of California on Tuesday passed Bill AB5, which set stricter standards to determine which workers can be properly classified as independent contractors. Democratic governor Gavin Newsom has announced his support for the measure, which is expected to come into effect on 1 January.

The legislation threatens to rob a band of California companies that use independent drivers. Uber Technologies Inc (UBER.N) and Lyft Inc (LYFT.O), the trucking industry that underpins the agriculture, retail, and industrial sectors in the United States is also highly exposed.

"This will affect all trucking companies, large and small," said Joseph Rajkovacz, director of government affairs for the Western States Trucking Association.

Trucking companies of all stripes rely on the approximately 70,000 independent independent rig owners in California to transport loads in the state and country.

Experts say the 137,000 small trucking companies in California are vulnerable to the upheavals caused by AB5.

"We have a lot of peaks and valleys. It takes away all the flexibility, "said Bill Aboudi, whose eight-truck company serves the port of Oakland.

Most drivers who transport goods to and from huge freighters at the port are independent, he said.

"If no one can use them, we are going to have a nightmare," said Aboudi, who employs seven drivers and said that switching to a different employee model would not happen overnight.

Sandra Alzate, based in Los Angeles, hires independent owner-operators when her clients, including the Los Angeles Unified School District, have more work than her four truck company can handle herself.

"I'm going to lose customers because I can not provide the trucks they need for their work," said Alzate, who was already planning to invest $ 400,000 on two truck upgrades and who did not ways to recruit new drivers or other rigs.

"I do not think they understand the impact," Alzate said of AB5 supporters.

Proponents of the bill backed by unions say it would tackle the job abuse in the transportation industry, where companies like Uber, XPO Logistics Inc. (XPO.N) and the trucking company Swift Transportation Holdings Inc. (KNX.N) paid millions of dollars in overtime and wage claims to resolve disputes over the misclassification of workers.

Representatives of XPO and Knight-Swift did not respond to requests for comment. Aboudi, of Oakland, said he was in the process of resolving a misclassification complaint involving meal and meal breaks.