California Law: Employee Vs. Independent Contractor

Updated: Apr 21

How Does Worker Categories Affect Your Labor Law Rights In California?

Employee classification is crucial in California labor law. Your rights and employment benefits are directly affected by whether you're an employee or an independent contractor. That said, let's look at their important distinctions, how they affect your employment, and what that means for potential employment claims.

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Differentiating The Employee From The Independent Contractor

So, how would employment lawyers categorize employees vs. independent contractors? Here's a quick rundown:

  • Employees work for a company (usually on a long-term basis). They are paid a salary or an hourly wage to execute duties for the company. In exchange for having complete control over how the work is conducted, an employer must teach their own personnel and provide the necessary equipment for them to perform the job. Finally (and perhaps most critically), an employee does work that is part of the company's daily operations.

  • Independent contractors work for themselves. Independent contractors frequently do specialized work for several clients, have their own schedules, provide their own tools, and are their own bosses. When they work for a firm, they frequently do things that aren't related to the organization's core business.

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Why Is The Different Crucial In California Labor Law?

Under state law, employees are entitled to a number of protections and benefits that do not apply to independent contractors. Employees are eligible for the following benefits:

  • Meal breaks

  • Rest breaks

  • Overtime

  • Unemployment insurance

  • Social Security

  • Workers' compensation

  • Protections for minimum wage workers

  • Anti-discrimination laws

Such perks are not available to independent contractors. According to this rationale, if someone is misclassified as an independent contractor when they are truly an employee, they could be losing thousands of dollars in salaries, benefits, and other perks.

The ABC Test For Independent Contractors In California

Since there's a lot riding on the difference between an employee and an independent contractor, it's important that you're clear on which type of worker you are.

One way to determine whether you're an independent contractor or not is the ABC test based on California Independent Contractor Law; whereas a worker is considered an employee unless:

  • Absence Of Control. The worker is free from the hiring entity's control and direction in connection with the work's performance.

  • Business. The employee does work isn't part of the hiring company's normal operations.

  • Customarily Engaged. The worker is usually involved in an independently established trade, occupation, or company relevant to the current job.

If you fit neither of the above factors, then you might be considered an employee under California law. Given that there are much more benefits to being an employee, workers misclassified as independent contractors might be missing out on benefits and pay.

If you've been misclassified, contact a prescreened California Employment Attorney to help you ASAP. A lawyer will be able to help you get evidence, request paperwork, and manage the claims process.

How To Deal With Worker Misclassification In California