Employment Law

California law lays out clear guidelines as to whether or not a worker is an independent contractor or an employee. At first glance, this type of classification may seem irrelevant. However, some companies are purposefully misclassifying regular employees as independent contractors in an attempt to prevent providing those workers with fair compensation and employee benefits.

Employees typically receive benefits such as vacation pay, sick pay, medical and dental insurance, and reimbursement for mileage and other costs incurred that pertains to the job. However, employers usually do not provide these benefits to independent contractors. Instead of these benefits, independent contractors are given more freedom to do their jobs as they please.

Workers who are incorrectly classified as independent contractors but are actually employees may be entitled to the benefits and compensation that they would have received had they been classified correctly, plus damages. Employment status is determinable through three categories: behavioral control, financial control, and the business relationship.

Behavioral Control

  • Types of Instructions - Employees are told...
    • When and where to work
    • What tools to use
    • Which other workers should be hired
    • Where supplies are purchased and serviced
    • Who should do specific work
    • How to do the work
  • Extent of Instruction - Employees are provided detailed instructions
    • The more detailed the instructions, the more likely the worker is an employee
  • Evaluation of Work
    • Employees are evaluated on how the work is performed and the finished product
    • Independent contractors are only evaluated on the finished product
  • Training Programs - If detailed training is provided to a worker, that worker is an employee.
    • Ongoing and recurring training strengthens an employee claim

    • Financial Control

    True independent contractors...

    • Often invest their own money in the equipment used while working for another person, including tools and other equipment
    • Are less likely to be reimbursed for costs incurred while working for another person
    • Have the risk of losing money on any contracted job
    • Are generally allowed to work for more than one company at the same time, as well as advertise their services
    • Are sometimes paid in one flat fee for the work performed

    Business Relationship

    • A contract stating a worker is an independent contractor is not proof that a worker is properly classified
    • If a worker is hired indefinitely, without a specific project or timetable in mind, the worker is likely an employee
    • If an employer presents a worker's results as its own, the worker is likely an employee.