The case may have major implications for people classified as independent contractors.
Across the United States, more employees than ever before are being classified as independent contractors. This is particularly true in California, where app-based companies have found their homes and offer services that are largely provided by an army of workers who are defined as independent contractors. This distinction is important, as independent contractors are paid on an hourly basis, and do not receive any of the benefits traditionally offered to employees, such as benefits and contributions to retirements accounts.
In early February, the California Supreme Court heard arguments on a case that could change how independent contractors are classified in the state. According to California employment lawyers, this could have a major impact on workers across the state who may now be entitled to unpaid wages and benefits.
The case at issue is Dynamex Operations v. Superior Court. In that case, the California Court of Appeals adopted a fairly broad definition of the word “employ,” meaning “to engage, suffer or permit to work” in deciding that independent contractors were actually employees. The employer appealed, arguing that the traditional test, which looks at a number of factors that are unique to each situation, should be applied.
During oral arguments, both the employer and the group of independent contractors who had filed the lawsuit against the employer had a chance to present arguments. Interestingly, one justice argued for the adoption of what is known as the ABC test, which is used in several other jurisdictions. Under the ABC test, all three of the following conditions must occur in order for a worker to be an independent contractor: the worker must (1) have freedom from actual control over the work, (2) work beyond the usual course of business and off company premises, and (3) engage in an independent trade. If even one of the conditions is not met, the worker is an employee. If this test were to be applied in California, it seems likely that many people who were classified as independent contractors may now be considered employees — yet it remains unclear what the Supreme Court will do.
A decision on this case is expected within 90 days. Because the modern economy, particularly California’s booming tech sector, presents many challenges when it comes to how to classify workers, this decision has the potential to be momentous. If the Supreme Court changes the test to include more workers within the definition of employees, then you may want to consult with a California employment lawyer to determine what your rights are if you are currently an independent contractor or have worked as one in the past.
PLBH has more than 50 years of experience representing workers, including both employees and independent contractors, in various employment law cases. We follow cases such as this closely so that we can advocate for our clients. Contact us today at (800) 435-7542 or info@plblaw.com to schedule an initial consultation and learn more about your rights.