Misclassifying people as independent contractors when they’re truly employees is something that employers often do. It’s sometimes in an effort to save money and other times because they don’t know the difference.
Employees in California receive a host of benefits, including minimum wage, meal periods, rest breaks, overtime, unemployment insurance, workers’ compensation and specific protections against discrimination and harassment. Independent contractors typically don’t receive those protections, but they have significantly more freedom in how they get the job done.
ABC test
California uses what’s known as the ABC test to determine if a person is an employee or an independent contractor. A worker is considered an independent contractor if three specific factors are met.
- A: Worker isn’t controlled by the employer as they get the job done
- B: Work is performed outside of the employer’s usual business
- C: Worker is engaged in an independent occupation or trade of the same type of work they’re performing for the hiring party
These present practical differences that have to do with control, permanency and tools provided for the job. In most cases, independent contractors won’t be under the control of the employer, have any job permanency or receive company-provided tools or expense reimbursement.
When a worker is misclassified, they can face many adverse effects, sometimes without even realizing it. This can affect benefits, wages and other facets of their employment. California has strict enforcement measures when it comes to the classification of employees and independent contractors. Anyone who has reason to believe that they were misclassified should work with someone familiar with these matters so they can learn about their options to move forward.