How can your company come into compliance with independent contractor classification in San Diego? What are the risks to your business if you fail to take recent developments in our laws seriously and comply with this new game-changing California law?
The California Supreme Court decision in the case of Dynamex Operations West, Inc. v. Superior Court (often referred to simply as “Dynamex”) has sent shock waves throughout California. How can a business entity with 1099 workers come into compliance with independent contractor classification? The new law establishes the powerful legal presumption that any work performed in California must be accomplished by employees. The legal burden of proof is now on the employer to show a worker is correctly classified as an independent contractor or employee. The new law provides an ABC test which most businesses with 1099 workers will not be able to pass.
Coming into compliance with this new law is a challenging task requiring extensive legal insight, delicate negotiations and a genuine understanding of the risks for all parties. Most businesses will need to transition their 1099 workers to “employees” in order to comply with the law. The financial risk of non-compliance cannot be overstated. The penalties for misclassification can easily reach more than $100,000 per worker and often threaten the very existence of the company under scrutiny.
Watkins Firm attorneys will review present 1099 contracts to determine if independent contractors are properly classified. If the new ABC test requires your company to reclassify independent contractors as employees our experienced attorneys will work with you to develop a comprehensive strategy. This strategy is designed to smoothly transition 1099 workers to employment in the shortest possible time frame and a cost-efficient manner. The delicate nature of the discussion with existing independent contractors should not be under-estimated. One complaint by any present employee or independent contractor to a California or federal labor agency and your company will immediately face an audit with financial consequences which could bring an end to your business.
How can your San Diego entity come into compliance with independent contractor classification in San Diego and avoid part or all of the financial risks associated with this new law? 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. This important Supreme Court decision is literally a fundamental game-changer.
