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California Employee Misclassification: How To File A Claim Online Now

Updated: Nov 11

How to Find the Best California Employee Misclassification Lawyer?

Contract work as an independent contractor is becoming increasingly common. If you or someone you know is being classified as an independent contractor for the job you do, it is important that you understand your rights. You may be severely penalized if you fall into the 1099 Misclassification category. To ensure that your rights are secured, contact a California Employment Attorney.

Power and compensation are the two factors that determine whether you are classified as an employee or an independent contractor. Independent contractors incur unreimbursed costs throughout their workday, and they are responsible for supplying the funds to support the equipment required to perform their job. These contractors also provide their services for a flat rate to a large number of customers. Employees are unable to function under all of these circumstances.

Employers often misclassify their workers as independent contractors to avoid paying them correctly. Your boss prevents the following if you are working as an independent contractor:

  • Providing you with overtime pay

  • Taking care of the taxes

  • Providing advantages to you

  • Contributing to workers' compensation

  • Contributing to unemployment benefits

If you believe your work status has been misclassified, contact a California Employment Attorney for legal advice and to protect your rights.

To save money and increase their bottom line, many companies choose to recruit contractors rather than full-time workers. Companies pay independent workers to work on temporary assignments and provide consultancy services, but they are not considered staff. Since an individual company can work for a company for several years, the distinction between workers and contractors may become blurred.

Many people are confused about the distinction between being an independent contractor and being an employee because there seems to be little difference in many situations. Employees and independent contractors often work for the same company and sometimes perform the same tasks.

The misclassifying staff as independent contractors when they should be employees is one of the employers' most common mistakes. Although some employers can honestly misclassify employees due to a lack of legal knowledge, others do so on purpose to escape legal responsibilities.

When keeping independent contractors' services, companies have many more grey areas to work with. They still have some leeway when it comes to matters of job taxes in some situations. On the other hand, independent contractors and self-employed persons should study their relationships carefully and bear in mind the special legal and tax issues to appreciate the differences.

When employees are misclassified as independent contractors, they lose access to various privileges and benefits to that they are entitled. Minimum wage, meal and rest hours, paid overtime, fines, and interest, and other related rights granted to workers are examples of this.

A change of work description can have consequences for liability and taxation. You could have a wage and hour argument if you usually work more than 40 hours a week or eight hours a day but are not paid overtime because you are considered an independent contractor.

Our prescreened Employment Lawyer in Los Angeles can explain the legal choices and are dedicated to protecting California workers' employment law rights. We will assist you in filing a lawsuit against your employer in order to recover any unpaid wages.

What are the signs that I'm a 1099-Misclassified Employee?

There is some ambiguity in determining whether someone is an employee or an independent contractor. Some people assume that it is up to the organization that receives an individual's work to identify them; however, this is incorrect. When determining whether someone is an employee or an independent contractor, the IRS has set specific rules. Some signs that you've been misclassified as a 1099 independent contractor include:

  • You're behind the wheel of a corporate car or another vehicle.

  • When you can take a break, the boss or someone in charge informs you.

  • The corporation owns the machine you use.

  • You are not submitting an invoice for services rendered monthly or weekly.

  • Another oversees your job, or you are reporting to a boss.

  • Someone keeps track of your progress and provides you with a work schedule to stick to.

  • You are expected to report to work in the uniform you wear as a representative of the organization.

  • You're using the company's business cards and email addresses.

  • There are those at work who perform the same tasks as you, but they are known as W2 workers.

  • Someone can tell you when it's time to take a break.

These are some of the more common indicators that an independent contractor is misclassified by the organization for which they deliver services. If you believe you have been misclassified, contact a Labor Law Attorney immediately because you may be facing potential legal issues and financial obligations.

What's the Difference Between Employees vs. Independent Contractors?

A contractor is typically a person who runs his or her own company. They typically provide resources and expertise that an organization doesn't normally provide. They also set their own hours and fees, work from their own place of business or home, serve several customers or clients, decide when and how to complete assignments, have their own tools and equipment, and bear the costs associated with the job.

While the client will have deadlines and requirements for the work, the contractor may decide how best to complete the task and how much time to devote to it. An independent contractor, for example, is a fashion designer who works from home, sets his or her own hours, designs items for various clients, and is paid on a project-by-project basis.

On the other hand, an employee normally works for a single employer over whom the corporation has a great deal of influence. They usually do work that is part of the company's daily operations.

Employees work at the employer's location, work under the hours set by the employer, have regularly scheduled hours, receive training and direction from the company, are subject to company discipline, are paid an hourly wage or salary, complete tasks in the manner requested by the employer, and do not invest in the work or incur costs associated with the work. The organization also offers instruction, supervision, and instructions for the work product, as well as control over how the employee completes the work.

California Wage Orders: ABC Classification Test

Lawyers, judges, and government officials have used the Borello multi-factored classification test to decide if a worker is an employee or a contractor for years, if not decades. One of the reasons was the company's ability to monitor how the job was done as well as how the employee achieved the desired results.

If a driver for a gig-economy car service, for example, determined when to start work on a given day, what days to work, where to work, when to leave for the day, when and for how long to take breaks, and what to wear to work, they were almost certainly known as independent contractors.

The worker is free from the company's guidance and influence in connection with the work performed, whether by contract or in practice.

To demonstrate this section of the ABC test, the California Supreme Court offered some examples. Western Ports v. Employment Sec. Dept. involved a company that had previously misclassified its delivery drivers and could not demonstrate that a truck driver was free from the company's guidance and control, as required by Part A of the ABC exam.

This was because the company required the driver to obtain permission before transporting passengers, to keep the truck clean, to work on tasks that were not scheduled in advance, and to terminate a driver's services for failure to contact the dispatch center, tardiness, or any other violation of the company's policy.

The employee does work that is not part of the company's normal operations.

This means that a worker is considered an independent contractor if their responsibilities are clearly the same or identical to those of workers, but the job is done outside of the business entity's normal operations. As a result, the worker is considered to have their own company and is not considered to be working with the recruiting agency.

The Court gave the following examples: When a retail store hires an outside electrician to install a new electrical line in the store's premises or a plumber to fix a leak in a toilet, the electrician's or plumber's services are not part of the store's normal course of business. As a result, the electrician or plumber may not have been disciplined or allowed to work at the store as an employee.

Staff, on the other hand, are called employees in the following situations:

  • When a bakery employs cake decorators regularly to work on custom-designed cakes

  • When a museum that offers classes hires an art teacher to teach art classes on a daily and ongoing basis

  • When a clothing manufacturing corporation hires a committed, work-at-home seamstress to make clothes using the entity's designs and materials, which will be marketed and sold by the entity

  • When a resort that offers entertainment hires a performer regularly.

  • When a business that harvests trees and sells cut timber hires a worker to cut and harvest trees, it's called "forest harvesting."

All of these cases have one thing in common: employees are employed to do work that is part of the company's normal business operations. As a result, it would be fair to regard them as workers under the (B) portion of the ABC test. The worker is normally working in a similar sector, occupation, or trade that he or she has started on their own.

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When determining whether a worker is an independent contractor, it isn't enough for the recruiting entity to allow the worker to work for other clients or run his or her own company. Instead, courts will consider whether the company is marketed, whether it is registered or incorporated, and whether it provides services to the general public and other potential clients.

The ABC test allows the recruiting entity to demonstrate that a worker who decided to start a company for himself or herself followed the standard procedures for establishing and marketing an independent business. If the hiring body marks the worker as an independent contractor arbitrarily, the worker should be treated as an employee because he or she is not engaged in an independently defined trade. Furthermore, the fact that the recruiting entity did not discourage or forbid the worker from participating in independent trade is insufficient evidence that the worker chose to go into business for himself or herself.

When classifying staff, care must be taken to ensure that they meet all of the A, B, and C criteria. If a recruiting agency fails to create any of these three sections of the ABC test, the worker would be classified as an employee for the purposes of the California Wage Orders rather than an independent contractor. The California Department of Labor Standards Enforcement (DLSE) will also use these measures to decide whether the wage orders cover a worker.

Independent contractors are now protected from abuse by recruiting firms as a result of the Court's decision and are in a stronger position to ensure that their interests are addressed and met while doing business with such companies. When an employee works for a company, the legislation ensures a certain level of flexibility regarding benefits, holidays, and pay scale.

Employees in California Are Entitled to Certain Rights and Benefits

Under state and federal law, California employees are entitled to various protections. Some of the laws that apply to workers but not contractors are as follows:

  • Employees are covered by anti-discrimination laws on both a state and federal level.

  • Unemployment insurance plans are available to employees.

  • Wage and hour protections, such as paid overtime, minimum wage, and meal or rest breaks, are all guaranteed to employees.

  • Employers are required to provide workers' compensation benefits to their employees.

  • Employers are required to deduct federal and state income taxes from their workers' paychecks.

What Are The Rights and Responsibilities Of An Independent Contractor?

The "hiring" agency is called a client, not an employer, regarding independent contractors. Independent contractors fully control how, where, and where a project is done. The organization that hires a contractor does not have the authority to guide and manage the job. The customer decides the desired result of the job, but the independent contractor has complete control over how it is accomplished.

Although the client does not have direct control or direction over the job, the independent contractor does not completely control all aspects of the partnership. Independent contractors are required to finish the project according to the terms of their contract as soon as possible. Furthermore, independent contractors must pay their taxes since the "hiring" firms are not allowed to withhold taxes.

As an independent contractor, you are responsible for the following:

  • If no one is paying into the unemployment fund on your behalf, you will be ineligible for unemployment insurance.

  • If no one is paying into the worker's compensation fund on your behalf, you will be ineligible for worker's compensation.