California Supreme Court Ruling Means Many Independent Contractors Could Gain Employee Status

LOS ANGELES, May 9, 2018 /PRNewswire/ -- The California Supreme Court ruled on April 30 that a tougher legal standard must be used to classify a worker as an independent contractor instead of an employee. This is a major development in California employment law that will cause many workers now classified as independent contractors to be considered employees in the eyes of the state.

In its ruling, Dynamex Operations West, Inc. v. Superior Court, the California Supreme Court found that Dynamex, a courier and delivery service, had misclassified its couriers as independent contractors in order to cut costs. The court noted that "the misclassification of workers as independent contractors rather than employees is a very serious problem, depriving federal and state governments of billions of dollars in tax revenue and millions of workers of the labor law protections to which they are entitled."

Worker misclassification has become a significant labor issue in the United States in recent years, with millions of employees being reclassified as independent contractors, and millions of employment-based full-time jobs being replaced with contract, freelance, part-time, or temporary positions. The number of these alternative work relationships increased by over 50 percent between 2005 and 2015, and accounted for 94 percent of net job growth during that time.

This is due in part to the rise of the poorly-regulated "gig" or "on-demand" economy, where tech companies create apps to connect consumers with goods or services for rapid delivery. The workers who provide these goods or services are almost always classified as independent contractors, even when they work in the manner of a traditional employee.

Independent contractors rarely receive any job benefits—such as health coverage, paid time off, and retirement contributions—beyond their base pay. They are expected to use their own equipment and materials without compensation, and are responsible for paying their own employment taxes. What the court concluded in its ruling is that, when a business improperly classifies employees as independent contractors, it "does not bear any of those costs or responsibilities, the worker obtains none of the numerous labor law benefits, and the public may be required under applicable laws to assume additional financial burdens with respect to such workers and their families."

Despite the court's ruling, many companies will be in no hurry to properly classify their workers, especially if they misclassified their workers on purpose in the first place. In those instances it will remain largely up to workers themselves to seek out legal recourse. Shegerian & Associates, an employment discrimination law firm based in Los Angeles, recommends that workers who have questions about their work classification seek out legal consultation to better understand their rights and options.

Headquartered in Santa Monica, California and with offices in San Diego, San Francisco, & New York, Shegerian & Associates is a law firm specializing in protecting the rights of employees who have been wronged by their employers. Carney Shegerian, Trial Lawyer of the Year Award winner for 2013, has won 80 jury trials in his career, including 37 seven-figure verdicts. Shegerian & Associates is passionately dedicated to serving the needs of its clients. For more information about the firm, visit www.ShegerianLaw.com.

Media Contact: To arrange interviews with Carney Shegerian employment law matters, please contact [email protected]

SOURCE Shegerian & Associates, Inc.

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