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California has postponed plans to revoke about 17,000 commercial driver’s licenses until March, following a lawsuit filed by immigrant advocacy groups and amid mounting pressure from federal transportation officials.

State officials said the delay is intended to allow additional time to ensure that truck and bus drivers who are legally eligible are not wrongly stripped of their licenses. The revocations were originally expected to take effect this month.

The move comes as U.S. Transportation Secretary Sean Duffy warned that California could lose up to $160 million in federal transportation funding if it fails to meet a January 5 deadline to invalidate licenses issued to drivers who are not authorized to work in the United States. The federal government has already withheld $40 million, citing concerns that California has not properly enforced English proficiency and immigration verification requirements for commercial drivers.

California began issuing notices to invalidate licenses after a federal audit found compliance issues, including cases where licenses remained active after drivers’ work authorization expired or where documentation of immigration status checks was incomplete.

Duffy said the delay does not excuse California from complying with federal law, arguing that improperly licensed drivers pose a public safety risk. Federal officials have increased scrutiny of the issue following a fatal truck crash in Florida last August involving a driver who was not authorized to be in the country.

State officials said they are working to address federal concerns and implement reforms. California had planned to resume issuing commercial licenses in December, but that effort was blocked by the Federal Motor Carrier Safety Administration.

“Commercial drivers are essential to keeping supply chains moving and communities connected,” said Steve Gordon, director of the California Department of Motor Vehicles. “We are focused on ensuring safety while avoiding unnecessary harm to qualified drivers.”

The Sikh Coalition and the Asian Law Caucus filed a class-action lawsuit on behalf of affected drivers, arguing that immigrant truckers were unfairly targeted. The groups noted that immigrants make up roughly one-fifth of the U.S. trucking workforce, while non-domiciled licenses account for a much smaller share of total commercial licenses nationwide.

Legal advocates welcomed the delay, saying it provides temporary relief for drivers whose livelihoods were at risk. Federal officials, however, maintain that states must strictly comply with licensing and eligibility rules.

The dispute highlights growing tension between state and federal authorities over immigration enforcement and transportation safety, with trucking industry groups expressing concern that drivers and employers are caught between conflicting regulatory demands.