News

Classifying workers as independent contractors just got a lot riskier in California

"Yesterday, the California Supreme Court issued its decision in Dynamex Operations West, Inc. v. Superior Court (Lee), adopting a very broad view of the workers who will be deemed  employees” as opposed to “independent contractors” for purposes of claims alleging violations of California’s Wage Orders. This is a surprising decision that magnifies the risk of classifying workers as independent contractors in California, and is likely to lead to increased claims (in an already litigious area) challenging such classifications in this state." according to a  Carothers DiSante & Freudenberger LLP Article. " Classifying workers as independent contractors just got a lot riskier in California. Independent contractor classifications are a lot more likely to be challenged in litigation, and employers will have a much tougher time defeating the claims. It will also be easier for such claims to be successfully pursued on a class basis. If you’ve got a significant number of workers performing services for you in California as independent contractors, now is a good time to re-evaluate those classifications. This also obviously is not a good ruling for those ride-sharing services we all love."

Read full article with summary of  the descision HERE

Read Dynamex Operations West, Inc. v. Superior Court (Lee) descision HERE

 

According to WorkComp Central, " California’s Supreme Court on Monday laid down a simple, three-part test to determine whether a person is an employee of an independent contractor, in a  ruling that could have implications for workers’ compensation and the gig economy. The three-part test the court created in Dynamex Operations West Inc. v. Superior Court of Los Angeles County (Lee) asks whether a worker:
Is free from control and direction in the performance of work.
Is performing work outside the scope of the hiring entity’s business.
Is customarily engaged in an independently established trade.

If the answer to any of the three questions is “no,” a person is an employee subject to various labor law
protections, including minimum wages, and meal and rest periods.

Though the high court proposed the test for the purposes of wage violations, the new test could also be useful to
determine whether a person is an employee who has to be covered by workers’ compensation."