California Independent Contractor Misclassification Law (2019)

California employees who have been misclassified by their employers as 1099 employees or independent contractors may be affected by a recent ruling from the California Supreme Court. Under the new California independent contractor misclassification law, more workers may be eligible to be qualified as employees.

About the New California Independent Contractor Misclassification Law

The unanimous decision by the California Supreme Court redefines the qualifications for independent contractors in California.

The ruling makes it harder for companies to misclassify their employees as independent contractors instead of employees, and also requires companies to reclassify any employees that are currently wrongly listed as 1099 workers or independent contractors.

Types of workers that may be covered by the new ruling include drivers who work for ride-sharing apps, delivery drivers, and skilled contract workers.

According to a 2016 study by Harvard and Princeton economists, more than 12 million people were classified as independent contractors that year. This number makes up more than 8 percent of the U.S. workforce. Thousands of workers in California may be affected by this new ruling, reports the LA Times.

The new standards used to determine whether a worker is an employee or an independent contractor are called the ABC test. CBS Sacramento reports that under the terms of this three-part eligibility test, all the requirements of the test must be met in order for a worker to be classified as an independent contractor.

• A: the worker must be free from the control and direction of the company. This means that the company does not tell the worker how to perform their job.
• B: The work that is performed must be outside of the usual course of the company’s business.
• C: the worker must independently be engaged in a trade, occupation, or business of the same nature as the work they are doing for the company.

All three of these requirements must be met in order for a worker to be classified as an independent contractor. Otherwise, the worker must be classified as an employee and afforded all the legal rights and protections afforded to that classification.

Independent Contractors Versus Employees

By misclassifying employees as independent contractors, companies are able to save significant amounts of money. Independent contractors are not entitled to unemployment insurance, workers’ compensation insurance, health insurance, retirement plans, paid time off, and other benefits.

When companies misclassify their employees as independent contractors, they are not required to pay for these benefits, as well as paying their workers’ payroll taxes.

Additionally, independent contractors are not covered by minimum wage or overtime laws. They are not entitled to meal and rest breaks and are also not required to receive reimbursement for tools and other job-related expenses.

The criteria for classifying a worker as an independent contractor versus an employee can be complicated. Hiring a qualified attorney may aid you in determining whether you have been wrongly classified by your employer and are eligible to file a class action lawsuit to pursue compensation.

An experienced attorney may be able to help you interpret the new California independent contractor misclassification law and determine how it applies to you.

Join a Free Independent Contractor Class Action Lawsuit Investigation

Even if you are classified as an independent contractor, you may be entitled to minimum wage, overtime pay, reimbursement for expenses, and meal and rest breaks, among other employee benefits.

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This article is not legal advice. It is presented 
for informational purposes only.