Independent Contractors vs. Employees in California
Employment status is an important concern as a worker in California. Your employment status can determine benefits, insurance coverage, work schedules, pay, and many other key aspects of your job. In California, there are two main types of workers: independent contractors and employees. Knowing how to properly classify yourself can ensure the protection of your employment rights. It can also help you recognize when an employer is misclassifying you.
If you need assistance with issues related to being an independent contractor vs. an employee, contact the attorneys at Mathew & George for a free consultation in Los Angeles.
Benefits for Employees
An employee is someone employed by an individual, government entity or business. They have all the benefits of an employee-employer relationship in California, including protections from rules and requirements related to wages, hours and work conditions. Employees have many rights under California’s employment laws that independent contractors do not. They have the right to take meal and rest breaks, for instance, as well as the right to receive at least minimum wage and overtime pay. Furthermore, labor laws in California require employers to contribute to employees’ disability insurance benefits and unemployment insurance.
Independent contractors are exempt workers. They do not receive the employment benefits of staffed employees in California. They are in business for themselves or self-employed. Technically, an independent contractor is his or her own employer. Independent contractors make their own schedules, choose their rates of pay and accept jobs on a freelance basis. Hiring independent contractors as workers comes with far fewer rules, regulations and requirements for staffers than hiring employees. For this reason, misclassification is a common issue.
Flexibility for Independent Contractors
Although independent contractors do not receive the same benefits as employees in California, they enjoy certain other advantages that employees do not. One of the main benefits of being an independent contractor is having flexibility in how, where and when the person works. Independent contractors are in charge of their own hours and schedules, for the most part. They can be much more flexible with their work hours compared to the typical 9-to-5 employee. Independent contractors can also pick and choose which projects they accept and which they reject. Finally, they are in control of how much they charge for their services.
Laws and Tests in California
Misclassification of an independent contractor vs. an employee is a big deal in California. Unfortunately, it is a common tort. An employer may intentionally misclassify workers to avoid the increased costs of required benefits and insurance for employees. Misclassification could also be an attempt to protect the company from liability for its workers’ mistakes and negligence. In general, an employer will not be vicariously liable for the actions of its independent contractors, but it will be liable for the actions of employees.
Employers in California must use a three-part test known as the ABC test to abide by California law and properly classify a worker. The ABC test asks about Autonomy, Business Dissimilarity and Custom of the Worker to decide if someone is an employee or independent contractor. Other important tests for classifying a worker are the manner and means test, the IRS’s control test, the anti-discrimination law test, and the economic realities test. Each test is unique; however, they all share a focus on how much control the employer exercises over the worker. A greater level of control means higher odds that the worker is an employee, not an independent contractor.
What Can I Do if I Think I am Misclassified?
If you believe a person or business has misclassified you as an independent contractor or employee, speak to the lawyers at Mathew & George right away for legal advice. We will review the facts of your case and listen to your story to understand what happened. Then, we may offer to represent you during a claim for missing wages, overtime pay, hour law violations and other common issues related to worker misclassification. Call (888) 278-7878 or contact us online today to schedule your free consultation with our Los Angeles employment lawyers.