What is the new ABC test for independent contractors in San Diego and how does it impact 1099 and independent contractor misclassification throughout Southern California? The California Supreme Court recently released the landmark and game-changing Dynamex decision which affects the classification of workers in California as well as the misclassification of independent contractors and 1099 workers.
In the case of Dynamex Operations West, Inc. v. Superior Court (often referred to simply as “Dynamex”), the Court establishes the legal presumption that all workers in California should be classified as employees. The legal burden of proof has been shifted to the shoulders of the provider of work to prove 1099 workers and independent contractors fully meet the new ABC test for independent contractors from the Dynamex decision.
The new ABC test established by the Dynamex ruling requires that any business, entity or individual providing work to a 1099 worker or independent contractor must 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.”
Many present 1099 independent contractors will challenge Item “B” above. The opinion contained the Court’s examples of a the hiring of a plumber or electrician which have nothing to do with your actual primary business activity (unless you are operating a plumbing company or electrical service business in this example).
This controversial decision should raise immediate red flags for all organizations, companies, corporations, LLCs, partnerships, nonprofits and business entities who classify any worker as an independent contractor or 1099 worker. 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.
Learn more about the new ABC test for independent contractors in San Diego and how it will affect your operations.
