What are the risks of independent contractor misclassification after the Dynamex Decision and how can you protect your San Diego business?  What changed in California’s employment law last year and how will the Dynamex Decision affect your company going forward?

Late in the Spring of 2018 the California Supreme Court issued a landmark decision in the Dynamex case which represents a substantial change in California employment law.  The implications of the Dynamex decision simply cannot be overstated.  Do you have 1099 workers who are presently classified as independent contractors?  If so, you may face substantial financial risks associated with the misclassification of employees and resulting fines and financial penalties which could literally force you out of business.

This is very serious and the California EDD is already aggressively pursuing and taking action against San Diego and California companies who utilize 1099 workers as part of their business strategy.

The primary take away from the Dynamex Decision was the fundamental determination that every worker in California is presumed to be an employee, and the burden of proof lies with the employer to justify any deviation from an employee-employer relationship.  The Court established a new A-B-C test which essentially precludes independent contractors from providing work associated with the “usual course of the business for which work is performed.”  Generally speaking, any worker who is performing work or a task which is associated with the usual business of your company must be classified as an employee.

The financial consequences for ignoring the Dynamex decision are substantial, and have forced many companies literally out of business.  The failure to comply with Dynamex exposes your company to a civil penalty up to $25,000 per incidence as well as all income tax, payroll tax, benefits, unemployment and disability which should have been withheld with a look back period of four years.

The risks of independent contractor misclassification after the Dynamex Decision are too great to ignore.  Learn more about Dynamex and how you can come into compliance with this new California law.  We invite you to contact the Watkins Firm or call 858-535-1511 for a free consultation.

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To set up a free, no-obligation consultation with one of our knowledgeable San Diego business lawyers, call us at 858-535-1511 or contact us online.