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We Know California Labor Laws
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We Know California Labor Laws

Navigating California employment law can be a daunting undertaking.  From leave laws to San Francisco’s Medical Reimbursement Account mandate, the California employment landscape is ever changing.  Some employers are even steering away from operating in California due to the legal complexities of employment in the state. 

Independent contractor compliance has always been a hot topic and with the California 9th United States Court of Appeals May 2nd ruling that the state’s "ABC" test for classifying a worker as an employee or independent contractor applies retroactively, the topic is "hotter" than ever. 

In Dynamex Operations West v. Superior Court, the Court determined that to qualify as an independent contractor in California, three factors must be met.  On Thursday, the Court held that the test applies retroactively.  California employers need to go back and ensure their independent contractors met or meet the "ABC" test.

The "ABC" test

  • The worker must be free from the control and direction of the hiring entity in connection with the performance of the work.
  • The worker must perform tasks that are outside the usual course of the hiring entity’s business.
  • The worker must customarily engage in an independently established trade, occupation or business of the same nature as the work being performed for the hiring entity.

A misclassification claim can be costly, requiring pay of wages, back taxes, and benefits given to W-2 employees.  ICON Information Consultants has expertise in proper independent contractor compliance management.  Whether it be for a short-term or long-term assignment, we are here to take the risk of misclassification off you.  Reach out to us anytime to discuss your needs and how we can help or click here for more information.

Written By: Karen House