Articles Tagged with independent contractors

dynamex decisionBy now,  the California Dynamex decision (Dynamex Opertions West Inc. v. Superior Court) has been thoroughly discussed and analyzed in many publications and legal seminars.  decision. However, here is the big picture that both workers and employers (and especially employers) should keep in mind, as it will help them understand what’s behind this significant ruling.

Through the Dynamex decision, California’s highest court sought to address common abuses of workers’ rights that became pretty much an epidemic in this new “gig” economy, where employers would classify workers as contractors under the guise of outsourcing or telecommuting.  Companies would argue that since a worker is free to perform him duties from anywhere an at the time of his choosing, he should be classified as a contractor. The court made it clear that a worker can be classified as an employee even if he has flexibility in work hours and work location, contrary to what many employers have gotten used to believing.

Adopting the “ABC” test for employee / contractor determination, the Court made it clear that it would be very difficult, if not impossible, for companies who deliver their services through their workers to classify those workers as contractors. In other words, it’s hard to imagine how a plumbing or electrical services company would classify its plumbers or electricians as contractors.  This makes a lot of sense on a public policy level that seeks to protect workers’ rights. The legislatures wants to make sure that employers don’t deprive workers of the rights afforded to employees by being able to classify them as independent contractors based on a technicalities, and the Dynamex decision is in light with the spirit of this legislative intent.

independent contractor in CaliforniaIn recent years, it has become increasingly popular for businesses to use the services of independent contractors for both short and long-term projects rather than to hire new career employees. Business can retain the services of independent contractors directly, or through a temporary employment agency.

The potential advantages of suing independent contractors include:

1. Cost savings from mandated contributions. The employer does not have to pay the usual employer contributions – state unemployment tax, social security tax or federal unemployment tax.