Misclassification of Employees and Independent Contractors

What Rights Do Independent Contractors Have?

What is independent contractor misclassification? The misclassification of employees as independent contractors is a serious and ongoing problem in California, one that often results in employees being unfairly stripped of the rights afforded them by California labor laws. In the state of California, wage and hour laws provide certain protections that apply only to employees, regarding pay, hours, and working conditions, but these same standards do not apply to independent contractors, which leads some employers to knowingly misclassify their employees. If you believe your employer has partaken in independent contractor misclassification, you may have grounds to file a wage and hour lawsuit for unpaid wages and other damages. Consult our California employment law attorney at Davtyan Law Firm today.

Employee vs. Independent Contractor

California labor law is complex and complicated and it is not always easy to know whether a worker should be classified as an employee or independent contractor. The key element in determining whether a worker is an employee or independent contractor is the amount of control the employer has over the worker. Generally, if a worker is performing services typically provided by an employer’s company, and the employer has any control or direction over these services, the worker is considered an employee. On the other hand, when a company contracts with an independent contractor, the employer relays to the contractor what the scope of the work is but does not have any control over how the contractor completes the work.

California’s “ABC” Independent Contractor Test

In April 2018, the California Supreme Court made it more difficult for employers to misclassify employees, implementing a new “ABC” test for determining whether a worker is an employee or independent contractor “for purposes of California wage orders,” which generally establish standards for non-exempt employees’ wages, hours and working conditions. Under the ABC test:

“…a worker is properly considered an independent contractor to whom a wage order does not apply only if the hiring entity establishes: (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.”

In other words, in order for a California worker to be properly classified as an independent contractor, the employer must show all three of the following factors: that the worker is free from his or her control and direction; that the worker is engaged in an independently established trade or occupation; and that the worker routinely performs work that is outside the employer’s core business.

Contact Our CA Employment Law Attorneys for Help

California Wage Orders were adopted to protect workers’ health and safety and when an employee is misclassified as an independent contractor, he or she is not subject to California minimum wage and overtime protection laws. California law allows workers misclassified as independent contractors to file a wage and hour lawsuit for unpaid wages, unpaid overtime and unpaid meal and rest breaks, as well as penalties and interest. If you believe you have been misclassified as an independent contractor in California, do not hesitate to protect your legal rights. Contact our California employment law attorney at Davtyan Law Firm to discuss the possibility of filing a worker misclassification lawsuit against your employer.