Employees and independent contractors: construction trucking.

Senator Durazo's construction trucking legislation establishes an amnesty program for contractors who have misclassified drivers as independent contractors, while clarifying that vehicle ownership does not determine worker classification status. The bill creates a pathway for construction contractors to reclassify drivers as employees before January 2027 without incurring statutory penalties, provided they enter settlement agreements with state labor authorities.

Under the amnesty program, participating contractors must pay all previously owed wages, benefits and taxes for misclassified drivers, maintain converted positions as employee roles, and secure workers' compensation coverage. The bill specifies that construction drivers who own their trucks are entitled to negotiated reimbursement for vehicle use, maintenance and depreciation when classified as employees, with rates not falling below IRS standard mileage amounts.

The legislation addresses worker classification by explicitly stating that merely owning a vehicle or tools used for work does not make someone an independent contractor. This aligns with California's existing ABC test for employment status. Contractors who properly execute settlement agreements through the amnesty program receive protection from most civil and statutory penalties related to past misclassification, though certain fraud-based penalties remain enforceable.

The Labor Commissioner and Employment Development Department will jointly administer the program, with authority to monitor compliance and pursue civil enforcement actions against contractors who violate settlement terms. The bill preserves drivers' right to decline settlement offers, though they cannot then pursue penalties covered by the settlement period if the contractor maintains their employee classification.