As the potential repercussions of the California bill enshrining the ABC test to determine appropriate independent contractor classification begins to reverberate around the state, it makes sense to highlight a few potential ways small fleets who lease owner-operators in otherwise legit traditional models might be able to preserve their relationships with those haulers. Two of those have been covered here in Overdrive before, more than once, and could be viable depending on the situation. Both, however, might well prove bothersome given new liabilities, risk and basic costs.
That latter is not a model anyone who values independence in general is going to leap to enter into, I wouldn’t guess. As one reader had it in that earlier coverage, part of the broader California’s Independent Contractor Crisis series:
“If employee is anywhere in my job description, I better have medical, dental, vision, 401(k), paid vacation and all holidays paid, including time and a half after 40 hours! And when I park my truck, I turn in my pre-trip/post-trip to the shop, hang my key on the hook and get in my car and … see y’all in the morning!”
Angus Transportation small fleet owner Jimmy Nevarez, based in Southern California today with two independent contractor owner-operators leased on and two company trucks other than the one he drives (trailers, too), however, conjures the spirit of the many who put the state on their “do not haul” list as emissions regs eliminated most pre-2007-emissions-spec equipment from the roads there several years ago. His strategy may end up as one analogous to the sentiment that drove the creation of those clean-idle parody stickers we all recall.
“If this is going to be law on the first of the year,” Nevarez says, referring the January 2020 date when the law is current set to go into effect, “I’m going to be forced and squeezed out of the state. If that’s the case, then so be it.”
He won’t be the only one, he predicts. “I see a lot of other small carriers following suit in that regard.” Otherwise, “I’d have to fold my contractors, sell my assets that I do have and go back to being a one-truck owner-operator,” as he sees his only other option. He works with brokers, principally, for freight, so becoming a broker himself and getting into the co-brokering game — double brokering in Naverez’s mind, something he wants no part of — is a non-starter. His contractors, too, value their current IC status and the “contract deal I have.” Nevarez doesn’t see the two options spelled out up top as palatable in any way, shape or form.
