SB809 - Employees and independent contractors: construction trucking.

Senate Bill No. 809 CHAPTER 659 An act to add Sections 2750.9, 2775.5, and 2802.2 to the Labor Code, relating to employment. [ Approved by Governor October 11, 2025. Filed with Secretary of State October 11, 2025. ] LEGISLATIVE COUNSEL'S DIGEST SB 809, Durazo. Employees and independent contractors: construction trucking. (1) Existing law, as established in the case of Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903 (Dynamex), creates a presumption that a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits arising under wage orders issued by the Industrial Welfare Commission. Existing law requires a 3-part test, commonly known as the “ABC” test, to determine if workers are employees or independent contractors for those purposes. Existing law establishes that, for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation, or business. This test is commonly known as the “ABC” test, as described above. Existing law charges the Labor Commissioner with the enforcement of labor laws, including worker classification. Existing law exempts specified occupations and business relationships from the application of Dynamex and the provisions described above. This bill would provide that mere ownership of a vehicle, including a personal vehicle or a commercial vehicle, used by a person in providing labor or services for remuneration does not make that person an independent contractor. The bill would state that this provision is declarative of existing law. (2) Existing law establishes the Motor Carrier Employer Amnesty Program administered by the Labor Commissioner and the Employment Development Department. Pursuant to the program, notwithstanding any law, a motor carrier performing drayage services may be relieved of liability for statutory or civil penalties associated with the misclassification of commercial drivers as independent contractors if the motor carrier enters into a settlement agreement with the commissioner, with the cooperation and consent of the department, prior to January 1, 2017, whereby the motor carrier agrees to classify all of its commercial drivers as employees, and the settlement agreement contains prescribed components, including, but not limited to, an agreement by the motor carrier to pay all wages, benefits, and taxes owed, if any. This bill would establish a similar program, known as the Construction Trucking Employer Amnesty Program, to be administered by the commissioner and the department. Under the bill, an eligible construction contractor would be relieved of liability for statutory or civil penalties, except as provided, associated with the misclassification of construction drivers as independent contractors, if the eligible construction contractor executes a settlement agreement negotiated with, or approved by, the commissioner prior to January 1, 2029, whereby the eligible construction contractor agrees to properly classify all drivers performing construction work on their behalf as employees and the settlement agreement contains prescribed components, including, but not limited to, an agreement by the construction contractor to pay all wages, benefits, and taxes owed, if any. If a construction driver declines to accept the terms of a settlement agreement, the bill would still require an eligible construction contractor to reclassify the construction driver as an employee and the construction driver would be precluded from pursuing a claim for civil or statutory penalties under specified provisions of law for a claim arising during the period of time covered by the settlement agreement. (3) Existing law requires an employer to indemnify their employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of their duties, or of their obedience to the directions of the employer, as provided. This bill would provide that the duty of an employer to indemnify their employee for all necessary expenses or losses applies to the use of a vehicle owned by an employee and used by that employee in the discharge of their duties. The bill would provide that, with respect to construction trucking, a commercial motor vehicle driver who owns the truck, tractor, trailer, or other commercial vehicle that they use in the discharge of their duties as an employee working for an employer would be entitled to reimbursement for the use, upkeep, and depreciation of that truck, tractor, trailer, or other commercial vehicle, as provided. The bill would state that specified provisions described above are declarative of existing law. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 2750.9 is added to the Labor Code, to read: 2750.9. (a) The Labor Commissioner and the Employment Development Department shall administer the Construction Trucking Employer Amnesty Program pursuant to which, notwithstanding any other law, an eligible construction contractor shall be relieved of liability for statutory or civil penalties associated with the misclassification of construction drivers as independent contractors, as provided by this program, if the eligible construction contractor executes a settlement agreement negotiated with, or approved by, the Labor Commissioner whereby the eligible construction contractor agrees to, among other things, properly classify all drivers performing construction work on its behalf as employees. (b) As used in this section, the following terms shall have the following meanings: (1) (A) “Construction contract” means a contract, whether on a lump sum, time and material, cost plus, or other basis, to do any of the following: (i) Erect, construct, alter, or repair any building or other structure, project, development, or other improvement on or to real property. (ii) Erect, construct, alter, or repair any fixed works, including waterways and hydroelectric plants, steam and atomic electric generating plants, electrical transmission and distribution lines, telephone and telegraph lines, railroads, highways, airports, sewers and sewage disposal plants and systems, waterworks and water distribution systems, gas transmission and distribution systems, pipelines and other systems for the transmission of petroleum and other liquid or gaseous substances, refineries, and chemical plants. (iii) Pave surfaces separately or in connection with any of the above works or projects. (iv) Furnish and install the property becoming a part of a central heating, air-conditioning, or electrical system of a building or other structure, and furnish and install wires, ducts, pipes, vents, and other conduit imbedded in or securely affixed to the land or a structure on the land. (B) “Construction contract” does not include either of the following: (i) A contract for the sale, or for the sale and installation, of tangible personal property, including machinery and equipment. (ii) The furnishing of tangible personal property under what is otherwise a construction contract if the person furnishing the property is not responsible under the construction contract for the final affixation or installation of the property furnished. (2) “Construction contractor” means a person who agrees to perform and does perform a construction contract. Construction contractor includes subcontractors and specialty contractors and those engaged in building trades, including carpentry, bricklaying, cement work, steel work, plastering, drywall installation, sheet metal work, roofing, tile and terrazzo work, electrical work, plumbing, heating, air-conditioning, elevator installation and construction, painting, and persons installing floor coverings, including linoleum, floor tile, and wall-to-wall carpeting, by permanently affixing those coverings to a floor. Construction contractor includes any person required to be licensed under the Contractors’ State License Law (Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code) and any person contracting with the federal government to perform a construction contract. (3) “Construction driver” means a person who operates a motor vehicle to perform construction work on behalf of a construction contractor, utilizing a vehicle owned by the driver or a vehicle supplied by the construction contractor. (4) “Department” means the Employment Development Department. (5) “Eligible construction contractor” means a construction contractor that does not have either of the following on the date they apply to participate in the program: (A) A civil lawsuit that was filed on or before December 31, 2025, pending against it in a state or federal court that alleges or involves a misclassification of a construction driver. (B) A penalty assessed by the department pursuant to Section 1128 of the Unemployment Insurance Code that is final imposition of that penalty. (6) “Program” means the Construction Trucking Employer Amnesty Program established by this section. (c) (1) A construction contractor shall only apply to participate in the program by doing both of the following: (A) Submitting an application to the Labor Commissioner, on a form provided by the Labor Commissioner. The application shall, at a minimum, require the construction contractor to establish they qualify as an eligible construction contractor. (B) Reporting on the results of a self-audit in accordance with the guidelines provided by the Labor Commissioner. (2) A construction contractor that voluntarily or as a result of a final disposition in a civil proceeding reclassified its construction drivers as employees on or before September 1, 2028, shall, in addition to other information requested by the Labor Commissioner, also submit with its application all of the following: (A) Documentation demonstrating that the construction contractor reclassified their construction drivers as employees, including the commencement period applicable to the reclassification. (B) The identification of each construction driver reclassified in the documents provided in subparagraph (A), the amounts paid to each construction driver to compensate for the previous misclassification, and the time period applicable to the amount paid to each construction driver prior to reclassification. (C) A report of a self-audit for all construction drivers reclassified by the construction contractor identified in subparagraphs (A) and (B), and also include a separate self-audit report for any construction driver who is subject to reclassification, but is not identified in subparagraph (B). (3) A proceeding or action against a construction contractor pursuant to Sections 2698 to 2699.5, inclusive, shall not be initiated after the construction contractor has submitted an application for participation in the program, but may be initiated if the construction contractor’s application is denied. (4) If a construction contractor’s application to participate in the program is denied by the Labor Commissioner, the application or its submission shall not be considered an acknowledgment or admission by the construction contractor that they misclassified their construction drivers as independent contractors, and the application or its submission shall not be construed in any way to support an evidentiary inference that the construction contractor failed to properly classify their construction drivers as employees. (d) The Labor Commissioner shall analyze the information provided pursuant to paragraph (2) of subdivision (c) for the purpose of evaluating the scope of a prior reclassification of an eligible construction contractor’s construction drivers to employees and has discretionary authority to determine whether the scope was sufficient to afford relief to the misclassified construction drivers. (1) Before January 1, 2029, the Labor Commissioner, with the cooperation and consent of the department, may negotiate and execute a settlement agreement with an eligible construction contractor that applied to participate in the program. The Labor Commissioner shall not execute a settlement agreement on or after January 1, 2029. (2) Before January 1, 2029, an eligible construction contractor may negotiate a settlement agreement with a labor union representing its drivers, or with any city attorney, and shall submit that settlement agreement to the Labor Commissioner, who shall review and may approve that settlement agreement under the program. The Labor Commissioner shall not approve a settlement agreement on or after January 1, 2029. (e) Prior to the Labor Commissioner executing or approving a settlement agreement, an eligible construction contractor shall file their contribution returns and report unreported wages and taxes to the department for the time period the construction contractor seeks relief under the settlement agreement. (f) A settlement agreement executed or approved by the Labor Commissioner involving an eligible construction contractor pursuant to the program shall require an eligible construction contractor to do all of the following: (1) Pay all wages, benefits, and taxes owed, if any, to or in relation to all of its construction drivers reclassified from independent contractors to employees for the period of time from the first date of misclassification to the date the settlement agreement is executed, but not exceeding the applicable statute of limitations. The settlement shall include interest on unpaid taxes at the adjusted annual rate and by the method established pursuant to Section 19521 of the Revenue and Taxation Code and interest for unpaid wages at the rate of interest specified in subdivision (b) of Section 3289 of the Civil Code. (2) Maintain any converted construction driver positions as employee positions. (3) Consent that any future construction drivers hired to perform the same or similar duties as those employees converted pursuant to the settlement agreement shall be presumed to have employee status and that the eligible construction contractor shall have the burden to prove by clear and convincing evidence that they are not employees in any administrative or judicial proceeding in which their employment status is an issue. (4) Immediately after the execution of the settlement agreement, secure the workers’ compensation coverage that is legally required for the construction drivers who were reclassified a [Text truncated for display. Full text available on Congress.gov.]