What are the risks of independent contractor misclassification in San Diego and how can you protect your company and ongoing business? What changed in California’s employment law last year and how will the recent Supreme Court decision in the Dynamex case affect your business model going forward?
The implications of the recent sweeping decision and resulting changes to California labor laws 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 independent contractor misclassification in San Diego 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 and change in the law 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 and it’s associated revenue must be classified as an employee.
The financial consequences for ignoring these changes are substantial, and have forced many companies literally out of business. The failure to comply with proper classification 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 in San Diego are too great to ignore. Learn more about these new laws and how you can come into compliance with 1099 workers and independent contractors. 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.
