Employees and independent contractors: construction trucking.

Senator Durazo's construction trucking legislation establishes an amnesty program for contractors who misclassified drivers as independent contractors while clarifying that vehicle ownership alone does not determine employment status. The bill creates a pathway for eligible construction contractors to resolve past misclassification issues by entering settlement agreements with the Labor Commissioner before January 1, 2029.

Under the program, contractors who properly reclassify their drivers as employees and meet settlement terms would receive relief from certain civil and statutory penalties. Settlement agreements must include payment of back wages and benefits, maintenance of employee positions, and proof of workers' compensation coverage. The Labor Commissioner may also approve agreements negotiated between contractors and labor unions or city attorneys.

The legislation specifies that merely owning a vehicle used for work does not automatically make someone an independent contractor. For construction trucking specifically, employee drivers who own their commercial vehicles must be reimbursed for vehicle use, upkeep and depreciation. Reimbursement rates, negotiated between drivers and employers or through union representation, cannot fall below IRS standard mileage rates or actual expenses.

To participate, contractors must demonstrate eligibility, conduct self-audits, and file required tax returns. The Labor Commissioner and Employment Development Department will jointly administer the program, with authority to share necessary information and pursue civil enforcement of settlement terms. While the program offers penalty relief, it maintains exceptions for fraud, criminal investigations, and certain tax assessments predating agreements.