BILL ANALYSIS Ó
AB 950
Page 1
ASSEMBLY THIRD READING
AB 950 (John A. Pérez and Swanson)
As Introduced February 18, 2011
Majority vote
LABOR & EMPLOYMENT 5-1
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|Ayes:|Swanson, Alejo, Allen, | | |
| |Furutani, Yamada | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Morrell | | |
| | | | |
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SUMMARY : Deems drayage truck operators to be statutory
employees for employment purposes, as specified. Specifically,
this bill :
1)Provides that for purposes of state employment law (including
workers' compensation, occupational safety and health, and
retaliation or discrimination) a drayage truck operator is an
employee of the entity or person who arranges for or engages
the services of the operator.
2)Defines "drayage truck operator" as the driver of any vehicle
with a specified gross vehicle weight rating operating or
transgressing through port or intermodal rail yard property
for the purpose of loading, unloading, or transporting cargo.
3)Specifies that these provisions shall not be construed to deem
a public agency the employer of a drayage truck operator
without the consent of the public agency.
4)Makes related legislative findings and declarations.
FISCAL EFFECT : Unknown
COMMENTS : California is home to some of the largest and most
complex port operations in the world. Together, the Ports of
Los Angeles and Long Beach are the third largest port operation
in the world and the busiest seaport in America. They handle
approximately 43% of America's imports, including 62% of all
shipments to West Coast ports from Asian exporters. In
AB 950
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addition, the Port of Oakland is the fourth busiest port in the
United States and handles more than 99% of the containerized
goods moving through Northern California.
Over the years, concern has been expressed about the working
conditions facing these port truck drivers. By many accounts,
conditions facing port drivers began to change dramatically in
the early 1980s. Prior to this time, port truck drivers had
generally been recognized as employees, and many were unionized
with union wages and benefits. However, following deregulation
the industry began to shift and more of a reliance was placed on
the use of independent contractors or "owner operators." There
has been much debate over the years about whether this
classification of drivers as independent contractors is lawful
or instead represents a legal fiction. This particular question
is not unique to the port drayage context, as concern about
misclassification of workers as independent contractors has
spread to many other industries.
Supporters argue that the indisputable reality is that port
drivers misclassified as "independent contractors" do exactly
the same work as the much smaller group of port drivers who some
trucking companies have hired as "employees." Both groups carry
out the employer's core business: carrying goods to and from
the ports. Single-truck port drivers are simply a lower cost
alternative to using employee drivers. They do not compete with
other trucking companies; they compete with other minimum wage
workers in the lowest level of the labor market. They are
nothing less than sharecroppers on wheels.
They contend that legislative action targeted at the
port-trucking sector of the underground economy is urgently
needed. This bill provides the only effective solution to the
problem at hand: a codified bright-line designation of port
drivers as "statutory employees"- a rule that affords no
loopholes, no ambiguities, and no other excuse for these
companies to continue acting as though they are above the law.
Opponents argue that the practical effect of this bill is to ban
independent contractors, also known as owner-operators, from
California ports and negatively impact economic activity.
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They contend that if the main concern is misclassification, as
the proponents of this bill claim, then California should focus
on existing and established enforcement mechanisms. Rather than
address potential misclassification, this bill reaches too far
in eliminating a class of drivers and small businesses that
represent the dominate model for the drayage industry.
Moreover, opponents argue that the employee driver mandate
proposed in this bill is preempted by federal law. Federal law
prohibits states from taking actions that impact the rates,
routes, or services of trucking companies absent qualification
under a specified "safety exception."
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN: 0000522