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Stephen L. Carter

California Truck Ruling Exposes Weakness of Gig Economy Law AB5

A law aimed at preventing exploitation of gig workers has instead taken away their freedom to choose.

Employees only?

Employees only?

Photographer: David McNew/Getty Images

California’s effort to reshape the gig economy hit a significant roadblock this week when a federal court issued a temporary injunction prohibiting the application of the state’s new rules to truck drivers, citing a conflict with federal law. The roadblock is by no means fatal, but it’s not insignificant — not when there are so many lawsuits left to be decided.

As you may recall, last year California passed Assembly Bill 5, which went into effect on Jan. 1, 2020. The new law, widely known as AB-5, creates a strict test for determining whether an individual who provides services to a company is an independent contractor or an employee. The law treats ride-hailing drivers, computer coders, freelance writers and other gig workers as if they are all being exploited by the businesses that pay them.