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California Wage Law Straight Talk: Independent Contractor vs. Employee

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“I’ll tell you what the public likes more than anything. It’s the rarest commodity in the world – honesty.” - Merle Haggard

California Super Lawyer Bill Turley

Why Do Companies Classify Workers as an Independent Contractor Versus an Employee?

In many instances, California employers illegally classify employees as independent contractors. In essence, this is a form of wage theft. California companies improperly classify workers so the company does not have to pay payroll taxes, the minimum wage, overtime, comply with other wage and hour law requirements such as providing meal periods and rest breaks, or reimburse their workers for business expenses incurred in performing their jobs. Another reason that employers improperly classify workers as independent contractors is to get out of having to cover workers under workers’ compensation insurance, and to not be liable for payments under unemployment insurance, disability insurance, or social security.

However, not all workers are employees as they may be volunteers or independent contractors.

How Do I Know?

I am a California wage and hour lawyer. I represent hundreds of thousands California workers just like you. I am the workers’ lawyer in the ground breaking California Supreme Court case Brinker v. Superior Court. This 2012 case paved the way for every worker in California to get paid their fair wages. I'll show you how to get your hard earned money back.

How Do You Know if You Are an Employee or an Independent Contractor?

Under California law, there is no set definition of the term "independent contractor" and as such, one must look to the interpretations of the courts and enforcement agencies to decide if in a particular situation you are an employee or independent contractor.

Under California wage and hour law, an actual determination of whether you are an employee or independent contractor depends upon a number of factors, all of which must be considered, and none of which is controlling by itself. California law applies what is called the "multi-factor" or the "economic realities" test.

However, there are some guiding principals. The law starts with the presumption that you are an employee. This is a called a “rebuttable presumption” meaning the company can object to that presumption.

In applying the economic realities test, the most significant factor to be considered is whether the company has control or the right to control your work both as to the work done and the manner and means in which it is performed.

In this instance, I am going to assume that you are performing work for a company, but it could be for an individual or some other type of business entity.

Here are additional questions and/or factors  that may be considered regarding whether you are considered an employee or an independent contractor under California wage and hour laws:

  • Is the worker is engaged in an occupation or business distinct from that of the company?
  • Is the work a part of the regular business of the company?
  • Does the company or the worker supply the instrumentalities and/or tools for work being done?
  • Does the company or the worker provide the place for the work being done?
  • Does the service rendered require a special skill?
  • For the kind of occupation in the locality, is the work usually done under the direction of the principal or by a specialist without supervision?
  • What is the worker’s opportunity for profit or loss depending on his or her managerial skill?
  • What is the length of time for which the services are to be performed?
  • What is the length of time for which the services are to be performed?
  • What is the degree of permanence of the working relationship?
  • What is the method of payment? Is it by time or by the job?
  • Do the parties believe that they are creating an employer-employee relationship? However, this is not determinative, since this is a question of law based on the circumstances.

What Does All of This Mean?

This is a very fact-intensive analysis. There is not a cut and dried “black letter law.” This is why it is always best to consult with a seasoned wage and hour attorney before you file a claim.

California's Wage and Hour Super Lawyer

Awarded Super Lawyer 2011-2017
Highest Avvo.com Rating
Elected President of the Consumer Attorneys
Awarded Top Lawyer

Offices in San Diego, Los Angeles, San Francisco, Oakland and Bakersfield.


Disclaimer: Please understand these discussions and/or examples are not legal advice. All legal situations are different. This testimonial, endorsement and/or discussion does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter, your particular case/ situation and/or this particular case/ situation. Thanks, Bill Turley

William Turley
“When I seek out professional advice, I don’t want B.S., I want it straight up. I figure you do also.”
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