Carrier compliance is no longer optional. California Assembly Bill 5 took effect in January 2020 and shifted how trucking firms comply with U.S. import/export regulations related to worker classifications. For a while, the state was quiet, but things changed on October 18, 2025, when the California Labor Commission Office issued citations to three carriers, alleging driver misclassification under the AB5 rule and other labor law violations.
According to the commission, 58 drivers had been misclassified as independent contractors. The issue is that AB5 also makes shippers liable. And even though the carriers in this incident filed an appeal, the total penalty is $868,127, which is a costly liability and why beneficial cargo owners must ensure their carriers comply when moving freight through the ports of Los Angeles and Long Beach.
Before AB5 took effect, the industry was largely exempt due to a judicial injunction, but once the Supreme Court denied an appeal filed by the California Trucking Association (CTA), strict enforcement of AB5 applied to motor carriers and the shippers using their services.
Before implementing AB5, California used the 11-part Borello test to determine whether a worker should be classified as an employee or contractor. AB5 simplified the process with an ABC Test in which the company employing the worker must demonstrate that:
• The worker operates entirely at his/her own expense.
• The worker is outside the normal scope of the company’s business.
• The worker conducts work within his/her own established trade or occupation.
All three conditions must be met before classifying a worker as a contractor. Naturally, the second one is challenging because most drayage carriers operating in California cannot classify their drivers as independent contractors under this test, since it is unrealistic to claim that hauling freight falls outside a trucking company’s typical functions.
In 2018, California enacted Senate Bill 1402, which holds both shippers and retailers jointly responsible for all violations committed by port trucking companies they hire. The Division of Labor Standards Enforcement maintains a public list of all carriers with outstanding judgments for these violations. Shippers are expected to check this list before booking freight; otherwise, they assume the same liabilities for wage theft, worker misclassifications, and unreported workers’ compensation costs associated with those carriers.
More than 40% of total U.S. container cargo volume is processed through the ports of Los Angeles, Long Beach, and Oakland, a significant risk concentration in just one state. But it can be avoided.
The $863,128 fine assessed to the carriers gives a general estimate of the possible dollar amount tied to a U.S. import/export regulation violation related to worker classification. About $663,000 (about 77% of the total) of the assessment will go toward paying back wages owed to each of the 58 truckers employed by the firm. The citations included violations related to minimum wage, overtime pay, failure to allow drivers their required meal and rest periods, and failure to provide paid sick time off.
If a shipper or BCO is found jointly liable with the carriers they contract with for worker misclassification (a joint employer finding), their exposure will include significant potential back-wage obligations for each driver they misclassified while contracting with that carrier over a defined period. Even if the charges are successfully defended, you still must pay legal fees regardless of the outcome.
Freight flow can also be disrupted when a carrier’s operation is subject to investigation, which requires last-minute routing adjustments to your cargo.
Finally, your company risks reputational damage if its name is linked to a misclassification enforcement action. Someone in your procurement department will likely have an unpleasant discussion with someone in your C-Suite regarding the blowback.
This list doesn’t replace continuous monitoring, but it goes a long way.
The FMCSA maintains an up-to-date database of all operational carriers. You can verify your carrier’s status using the SAFER system (safer.fmcsa.dot.gov). If the MC number associated with the carrier is listed as inactive or revoked for the type of freight you are moving, then it is a red flag because, under U.S. import/export regulations, the carrier is disqualified.
This one is the most vital on the checklist. Confirm the carrier’s drivers are properly classified as either W-2 employees or 1099 independent contractors and, if possible, ask for proof. Under AB5, a carrier employing independent contractors for drayage operations may fail the ABC test, which also makes you liable.
When reviewing a certificate of insurance for either workers’ compensation insurance coverage or cargo insurance coverage, do not take the certificate at face value because it can be faked or, in some cases, contain coverage limits that have no relevance to the specific freight being moved. Contact the insurer directly to verify the policy is active. Also, ensure the coverage levels match the freight being moved. Noncompliance with workers’ compensation and insurance requirements violates federal law and usually indicates that carriers’ compliance standards are slipping.
You can review crash rates and inspection results from FMCSA’s Safety Measurement System. CSA scores are percentile rankings ranging from zero to 100 across seven categories, including hours of service and vehicle maintenance. If a carrier ranks above the 65th percentile in either the unsafe driving category or crash indicator categories, it is likely already on FMCSA’s radar for intervention. Meanwhile, a carrier with a high OOS rate has maintenance and compliance problems that put your freight at risk.
Like the rest of the checklist, the answer to this one is informative because a carrier that struggles to produce documentation or hesitates when asked about its testing policy reveals more about its operation than the policy document does. The FMCSA requires every motor carrier to maintain a drug and alcohol testing program for all CDL holders, so if they aren’t doing it, something is wrong.
California takes emissions seriously. Since January 1, 2024, only zero-emission drayage trucks are eligible for registration in CARB’s online registry system. However, legacy diesel trucks registered before January 1, 2024, can continue to be used through their minimum useful life.
Under federal law, gross vehicle weight is limited to 80,000 pounds on interstate highways with single axle limitations of 20,000 pounds and tandem axle limitations of 34,000 pounds. In California, fines for running 5,000 pounds over gross weight range from $1,750 to $2,500 or more. Each overweight violation generates entries in FMCSA’s Safety Measurement System, increasing the chances of enforcement against the carrier. Ask the carrier what happens when shippers want to push past legal gross weight limits. The answer tells you a great deal about how they run their operations.
A carrier can clear every hurdle on day one and start cutting corners three months later when volume is up, and the pressure to control costs is real. For example, the W-2 employment verification is a snapshot. After you get the business, the carrier could flip drivers back to 1099 arrangements, and you wouldn’t know until an enforcement action appeared.
From the shipper side, overweight loading is particularly hard to enforce. That’s usually under pressure, with volumes spiking or a customer pushing for one more container on a truck that’s already near the limit. Some of these carriers’ compliance failures only show up at scale.
That initial vetting won’t catch everything, but it will set a benchmark. If a carrier cannot answer these seven questions clearly and quickly, chances are they won’t be able to answer the questions a DOL auditor would ask when enforcing U.S. import/export regulations either.
Golden State Logistics was one of the first drayage carriers in the LA/Long Beach port complex to fully comply with AB5 and the broader U.S. import/export regulations governing California drayage, moving to a W-2 employment model before many carriers in the market even realized the law applied.
We will not allow illegal overweight loads. Period. That refusal has cost us business in the short term over the years. If a shipper wants to go over 80,000 pounds and we say no, they may go to a carrier that will say yes. But shippers who have been with us through our 30 years of operations stay because that discipline keeps the exposure from reaching them.
The vetting checklist posted above is the one we use in our own operations. Use it on all carriers you book, including us. Because what your carrier does wrong can be what you end up paying for under current U.S. import/export regulations. Contact us today to see how we can work together.
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