Employees and independent contractors: construction trucking.

Senator Durazo, along with Assembly Member Kalra, frames a targeted approach to construction trucking misclassification by pairing a time‑limited amnesty with a vehicle‑ownership reimbursement framework, all within the existing employee‑vs‑independent contractor framework. The authors describe the measure as a mechanism to resolve past misclassifications for construction drivers while preserving the established ABC test that governs worker status, and to ensure that drivers who own their vehicles have a defined reimbursement pathway when they are employees.

At the core, the bill creates a narrowly scoped Construction Trucking Employer Amnesty Program administered by the Labor Commissioner and the Employment Development Department. Eligible contractors may be relieved of certain statutory or civil penalties tied to misclassifying construction drivers as independent contractors if they enter into a settlement negotiated or approved before early 2029 and agree to properly classify all drivers performing construction work as employees for the relevant period. Applicants must provide an eligibility form and a self‑audit, and negotiations may occur with unions or city attorneys, subject to expedited review. If the contractor’s application is denied, that decision does not constitute an admission of misclassification. The program tolls the statute of limitations during the application and settlement period, and settlements must include back wages, benefits, and taxes with interest, continued employee status for reclassified positions, and requirements to secure workers’ compensation coverage. The Labor Commissioner may enforce settlements and recover costs associated with administration, with penalties and certain penalties not waived by the settlement still potentially pursued for periods outside the covered timeframe.

The bill also clarifies that mere ownership of a vehicle used to provide labor does not automatically render a worker an independent contractor, and it establishes a dedicated reimbursement framework for construction drivers who own their vehicles. Ownership does not, by itself, determine status under the ABC analysis; if ownership results in employee status, the driver is entitled to reimbursement for vehicle use, upkeep, and depreciation. Reimbursement terms must be negotiated between the driver and the employer (or through a driver‑represented labor union), and the amount must equal actual costs or the IRS standard mileage rate, whichever is higher. Reimbursement may be paid directly to the driver or to a driver‑owned corporate entity that owns the vehicle.

In a broader sense, the bill preserves the core enforcement framework for misclassification outside the amnesty window, enabling civil actions by the Labor Commissioner to enforce settlement terms or pursue penalties not waived by a settlement. It also sets deadlines and administrative processes for participation, reporting, and monitoring, and contemplates the allocation of certain settlement costs to a dedicated enforcement fund. Taken together, the provisions aim to resolve past misclassifications in construction trucking while delivering a structured, worker‑centered reimbursement pathway for vehicle owners and maintaining the integrity of the ABC framework going forward.