Independent contractor relationships will be reevaluated. In 2019, the California Legislature enacted AB 5, which affixed in the state’s labor statutes the California Supreme Court’s landmark 2018 Dynamex ruling announcing an “ABC” test for independent contractors. A worker is presumed to be an employee and may be classified as an independent contractor only if: (A) the worker is free of the control the hiring entity typically exercises over its employees; (B) the work the worker does is not integral to the business’s operations; and (C) the worker customarily performs work in an independently established trade or occupation of the same nature as the work performed for the hiring entity.
The Legislature expects the measure to turn “several million” Californians now classified as independent contractors into employees. I received numerous emails in response to my column on AB 5 in September from business lawyers in a wide range of industries that now use independent contractors who fear the Legislature is right.
There are tens of thousands of independent contractors who apparently don’t feel the slightest bit exploited. And they don’t want anything to do with formal employment or unions. They include healthcare workers, psych therapists, budding musicians and truck drivers who own their own rigs.
California law allows workers who are misclassified as independent contracts (but should have been treated as W2 employees) to file a wage and hour lawsuit. Damages against the employer can include:
unpaid wages,
unpaid overtime,
unpaid meal and rest breaks, as well as
penalties and interest.
In California, the basic definition of "independent contractor" is a person who performs services for someone else and retains control of how the service is performed.
If someone performing services for someone else does not meet the formal definition of an independent contractor, then they are presumed to be an "employee" for purposes of California labor law.
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