What distinguishes an employee from an independent contractor is very context-driven and can vary widely depending on whether the purpose is to determine liability under Worker’s Compensation, discrimination, wage and hour, immigration, intellectual property, or local, state and/or federal tax laws. Generally speaking, under California law, persons are presumed to be employees so that Worker’s Compensation benefits, the right to a workplace free from discrimination and minimum wages are guaranteed, and so employers can be relied upon to properly withhold and pay income, social security, Medicare and unemployment taxes.
Employers, or any other principal seeking to avoid liability, have the burden of proving that persons whose services have been retained are independent contractors rather than employees. Depending on the context, the factors examined to determine independent contractor status can be numerous but they tend to center around the level of control exercised over the means by which the work was accomplished, the amount and kind of training the principal offered the worker, the length and type of relationship between the parties, the skills required to perform the services, and whether the particular tasks performed are typical to the business operations of the principal. For purposes of determining your right to items like minimum wage, overtime pay and meal/rest break entitlement, California’s Supreme Court announced in 2018 a three-part test that provides a tough standard for companies intending to avoid an “employment” relationship. Since the answer to whether a worker is an employee or independent contractor can vary significantly by context, you should contact us to discuss how these rules might affect you.
This information is for illustrative and educational purposes only. It should not be construed as legal advice, the establishment of an attorney-client relationship, or as indicative of a particular outcome regarding any legal issue you might have.