The new contractor law in California listed as A.B. 5, will take effect Jan. 1, 2020. This may change future activity of owner-operators that lives or operates frequently in the State, since they will be obligated to work for a carrier or become an owner operator with authority to continue their work.

This change will probably affect the decision of motor carriers to lease owners-operator licenses, which will obviously decrease the job opportunities for those drivers in the state, making it harder for them to continue working.

Thanks to A.B. 5, the ABC test could be applied to figure out if a worker is a contractor or an employee, which means that employers cannot hire anymore people that execute the same work as the company itself.

This means that carriers will not be able to continue using the traditional independent contractor agreement for leasing owners-operator vehicles and themselves to transport cargo. However not only will owner-operators be affected by the new law, but also nurses, dog walkers, construction workers and Lyft and Uber drivers.