California Supreme Court to Define “Independent Contractor”
The California Supreme Court has agreed to review a controversial Court of Appeal decision which, if affirmed, could dramatically expand the definition of an employee in California. The case at hand is Dynamex Operations v. Superior Court, a case addressing the legal standard for determining whether a worker should be classified as an independent contractor or an employee. The Supreme Court’s opinion is expected to be significant for any company using independent contractors in the state of California.
Misclassifying workers as independent contractors can create significant financial liability for back wages, penalties, fines, and the assessment of back taxes. Further problems can also arise when misclassified workers, who would otherwise be entitled to employee benefits, don’t receive those benefits. In the past, when companies determine whether workers are independent contractors they must carefully consider how much control the company exerts over a worker and how much a worker economically depends on the company. While often vague, this framework provides some consistency.
There has been a huge growth in the independent workforce in recent years and many industry experts are predicting that the percentage of workers classifying themselves as independent contractors could approach 40% or more of the total US workforce by 2020. Whether they go by the label of freelancers, consultants or independent contractors, many people in the modern workforce want to be independent and have no desire to be employees of a single company.
Although we cannot predict what is going through the minds of seven justices, we feel confident that the Supreme Court will likely decide this issue in a manner that will best fit the needs of the modern economy. The Supreme Court’s decision is expected within the next 90 days.
If you have questions about your rights as an Independent Contractor, call us now at 1-877-241-9554 to learn more about your legal options. A free consultation is just a phone call away.