The Watkins Firm published an ABC guide to misclassification risk for San Diego employers in the past. Legal battles continue as the Courts and Legislature of California work to clarify the implementation and enforcement of these new measures. What does it mean for California and San Diego area employers?
What You Need to Know about the Classification of 1099 Workers and Independent Contractors
In our white paper: “What You Need to Know about the Recent Dynamex Decision and the Classification of 1099 Workers and Independent Contractors” we lay out the fundamental basis of the “Dynamex” decision for San Diego and Southern California employers. The point of this background is to help area employers to accurately quantify the genuine risks associated with 1099 workers and the misclassification of independent contractors.
This landmark legal decision has made a significant impact on California wage orders as well as the relationship between workers and those who provide the work. The most important take-away from the decision is new California precedent which establishes the legal status of all workers in California.
All Workers in California are Presumed to be Employees and the New ABC Guide
California agencies such as the Labor Commissioner, the EDD and even the FTB now presume all workers in California are classified as employees. If you, as an employer or provider of work, wish to classify a worker as an independent contractor or 1099 relationship the legal burden of proof lies on your shoulders. The recent Supreme Court ruling establishes a new “A-B-C” test which makes it very difficult to justify many existing independent contractor relationships. In order to qualify as an independent contractor, the provider of work must now prove:
- “that the worker is free from control and direction over performance of the work both under the contract and in fact,” and
- “that the work provided is outside the usual course of the business for which the work is performed,” and
- “that the worker is customarily engaged in an independently established trade, occupation or business.”
The risks associated with misclassification of employees as independent contractors as a result of these developments cannot be overstated. In many cases the fines and costs associated with the misclassification of even a few independent contractors can threaten the financial viability and survival of your company.
Download Our Convenient ABC Guide to Misclassification Risk for San Diego Employers
Are you searching to learn more about our ABC guide to misclassification risk for San Diego employers and the basis for classifying workers? You may wish to download our complimentary Dynamex White Paper and learn more about this landmark ruling and how it will continue to impact business in San Diego and across California in the months and years to come.
We invite you to review the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today. You can speak directly with an experienced attorney who can provide insight and guidance on coming into compliance with the California’s complex classification rules and how to reduce contingent liabilities associated with existing independent contractor relationships.
