A week after immigrant groups filed a lawsuit, California said Tuesday it will delay the revocations of 17,000 commercial driver’s licenses until March to allow more time to ensure that truckers and bus drivers who legally qualify for the licenses can keep them.

But U.S. Transportation Secretary Sean Duffy said the state may lose $160 million if it doesn’t meet a Jan. 5 deadline to revoke the licenses. He already withheld $40 million in federal funding because he said California isn’t enforcing English proficiency requirements for truckers.

California only sent out notices to invalidate the licenses after Duffy pressured the state to make sure immigrants who are in the country illegally aren’t granted the licenses. An audit found problems like licenses that remained valid long after an immigrant’s authorization to be in the country expired or licenses where the state couldn’t prove it checked a driver’s immigration status.

“California does NOT have an ‘extension’ to keep breaking the law and putting Americans at risk on the roads,” Duffy posted on the social platform X.

The Transportation Department has been prioritizing the issue ever since a truck driver who was not authorized to be in the U.S. made an illegal U-turn and caused a crash in Florida that killed three people in August.

California officials said they are working to make sure the federal Transportation Department is satisfied with the reforms they have put in place. The state had planned to resume issuing commercial driver’s licenses in mid-December, but the Federal Motor Carrier Safety Administration blocked that.

“Commercial drivers are an important part of our economy — our supply chains don’t move, and our communities don’t stay connected without them,” said DMV Director Steve Gordon.

The Sikh Coalition, a national group defending the civil rights of Sikhs, and the San Francisco-based Asian Law Caucus filed a class-action lawsuit on behalf of the California drivers. They said immigrant truck drivers were being unfairly targeted. The driver in the Florida crash and the driver in another fatal crash in California in October are both Sikhs.
Immigrants account for about 20% of all truck drivers, but these non-domiciled licenses immigrants can receive only represent about 5% of all commercial driver’s licenses or about 200,000 drivers. The Transportation Department also proposed new restrictions that would severely limit which noncitizens could get a license, but a court put the new rules on hold.

Mumeeth Kaur, the legal director of the Sikh Coalition, said this delay “is an important step towards alleviating the immediate threat that these drivers are facing to their lives and livelihoods.”

Duffy previously threatened to withhold millions of dollars in federal funding from California, Pennsylvania and Minnesota after audits found significant problems under the existing rules like commercial licenses being valid long after an immigrant truck driver’s work permit expired. He dropped the threat to withhold $160 million from California after the state said it would revoke the licenses because the state was complying.

Trucking trade groups have praised the effort to get unqualified drivers who shouldn’t have licenses or can’t speak English off the road. They also applauded the Transportation Department’s moves to go after questionable commercial driver’s license schools.