California Ban on Independent Contractors

Currently, the California’s Department of Industrial Relations, Division of Labor Standards Enforcement (“DLSE”) is required to post on its internet webpage the names, addresses, and essential information for a port drayage motor carrier with an unsatisfied final court judgment, tax assessment, or tax lien that may be released to the public under federal and state disclosure laws, including any order, decision, or award obtained by a public or private person or entity pursuant to California Labor Code Section 98.1 finding that a port drayage motor carrier has engaged in illegal conduct including failure to pay wages, imposing unlawful expenses on employees, failure to remit payroll taxes, failure to provide workers’ compensation insurance, or misclassification of employees as independent contractors with regard to a port drayage commercial driver.

The California Legislature has enacted new rather, in this author’s opinion “Draconian” provisions effective on January 1, 2025 directly affecting THE CUSTOMERS of California port drayage motor carriers.  A CUSTOMER that uses a port drayage motor carrier that is on the DLSE list shall share with the motor carrier or the motor carrier’s successor all civil legal responsibility and civil liability owed to a port drayage driver or to the state for port drayage services obtained after the date the motor carrier appeared on the list, meaning joint and several liability with the motor carrier for the full amount of unpaid wages, unreimbursed expenses, damages, and penalties, including applicable interest and all other amounts that are found due.³

This means the customers of the port drayage carriers on the DLSE list are also responsible for the payment of the drivers. That is determined by the DLSE or by a court in a civil action brought by the Labor Commissioner, or by a commercial driver or their representative, where at least 30 business days prior to filing the civil action, the Labor Commissioner, or commercial driver or representative, notifies the customer of its potential joint and several liability for any of the wages, expenses, damages, or penalties.⁴

This article is not by any means an exhaustive analysis of the law. Those who need legal assistance should consult counsel.

¹ See California Labor Code Section 2775. Under the ABC test, a worker is considered an employee and not an independent contractor, unless the hiring entity satisfies all three of the following conditions:

• The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
• The worker performs work that is outside the usual course of the hiring entity’s business; and
• The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

For the business-to-business exemption, see California Labor Code Section 2776.

² See California Labor Code Section 2810.4
³ See California Labor Code Section 2810.4(b)(3) Subdivisions (A)-(G) identifying the of categories of payments. 

⁴ See California Labor Code Section 2810.4( c ).