Misclassification as an Independent Contractor

California

The Cooper Law Firm shares information about the California test for classifying workers as employees or independent contractors and what some of the remedies are.  They write:

California Test

If you own your own business and provide services to a number of customers on your own schedule, you are probably an independent contractor. If you primarily work for one employer and that employer is dictating how, when, or where you do your job, you might be entitled to be paid as an employee, not as an independent contractor.

The extent to which an employer controls the details of a worker’s job performance (for example, by setting hours of work, providing close supervision of the work or dictating how the work is performed) is an important factor that guides decisions about whether a worker is an employee. Control is not, however, the only factor and it is not always the most important factor. Instead, California courts and administrative agencies, like the federal Department of Labor, focus on the degree to which a worker is economically dependent upon the business to which the worker provides services.

The “economic realities” takes into account a number of factors in the context of a specific industry, including:

  • the employer’s right to control the work;
  • whether the worker’s opportunity for profit depends on the worker’s managerial skill;
  • whether the worker employs helpers or has invested in equipment or materials required for his task;
  • whether the service rendered requires a special skill;
  • whether the work performed is permanent or temporary; and
  • whether the service rendered is an integral part of the alleged employer’s business.

In the leading case applying this test, the California Supreme Court decided that “share farmers” who were hired to harvest cucumbers were not independent contractors, even though they set their own hours, were given little supervision, and were paid a share of price at which the cucumbers were sold. They were considered employees because the work required little skill, the profits they shared were not dependent on their management skill, and the economic reality of the agricultural industry dictated how and when the laborers would work. Since harvesting is an integral part of the employer’s farming business and since the workers depended on the employer to plant, cultivate, fertilize, and spray the crops, the court decided that the share farmers were functionally serving as employees.

California law presumes that workers are employees. It puts the burden on employers to prove that they have properly classified their workers as independent contractors rather than employees. In many instances, employers are unable to meet that burden.

Remedies for Misclassification

Section 226.8 of the California Labor Code makes it unlawful for any employer to engage in a willful misclassification of an employee as an independent contractor. The statute imposes substantial penalties upon employers who violate the law. The Labor Code’s Private Attorney General’s Act allows employees to share in those penalties in some instances.

Other California laws permit employees to seek injunctions to prevent employers from continuing to violate the law, as well as restitution for unpaid overtime and other earnings and benefits that the worker was entitled to receive. When employees are forced to pay expenses that should have been borne by the employer, section 2802 of the Labor Code authorizes the worker to bring legal action to recover those losses as well as attorney’s fees that the worker incurs to enforce those rights.

In addition, California law prohibits employers from retaliating against workers who complain that they were misclassified. An act of retaliation can result in the imposition of a civil penalty, payable to the worker, of up to $10,000 per violation, in addition to reinstatement and reimbursement for lost wages and work benefits.

The Cooper Law Firm provides aggressive representation of workers who have been improperly classified as independent contractors. If the facts support your right to be classified as an employee, The Cooper Law Firm can help you obtain the remedies to which you are entitled as a result of your employer’s unlawful conduct.

Read the full story at Misclassification as an Independent Contractor | Exempt Penalties –

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.