Businesses
sometimes attempt to disclaim an employment relationship between themselves and
the people who work for them. Frequently, this is done by asserting that
workers are independent contractors, rather than employees. Businesses
see an advantage to classifying workers in this way because they may not have
to provide benefits or pay for certain types of insurance - such as worker’s
compensation insurance - for independent contractors. Businesses also may
not have to pay payroll, social security, and other types of taxes for
independent contractors. Statutes and regulations concerning wages,
hours, and working conditions that apply to employees may not apply to
independent contractors. And, with only a few exceptions, a business
might not be held vicariously liable – under a respondeat superior
theory – for the tortious conduct of an independent contractor, while the same
would not be true concerning the torts of an employee.
Generally, the test for whether a worker
is classifiable as an employee or independent contractor is heavily based upon
whether the business maintains the right to control the work. This is
particularly true with regard to claims made by the worker against the
hirer. Blackwell v.
Vasilas (2016) 244 Cal.App.4th 160, 168
[“A worker is an independent contractor when he or she follows the employer's
desires only in the result of the work, and not the means by which it is
achieved.”].
In a recent California Supreme Court
case, Dynamex
Operations West, Inc. v. Superior Court, the Court utilized a
test called the “ABC test” to determine if an employee was an independent
contractor for purposes of determining the worker’s wage and pay rights.
The ABC test requires an analysis of the following three factors: (A)
whether the worker is free from the control and direction of the hirer in
connection with the performance of the work, both under the contract for the
performance of such work and in fact; (B) whether the worker performs work that
is outside the usual course of the hiring entity's business; and (C) whether
the worker is customarily engaged in an independently established trade,
occupation, or business of the same nature as the work performed for the hiring
entity. Dynamex
Operations West, Inc. v. Superior Court (2018)
4 Cal.5th 903, 916–917.
It remains to be seen whether the
Supreme Court’s adoption of the ABC test will impact the lower court’s analysis
of what makes an employee vs. an independent contractor in context of other
employees’ rights cases, or in cases of tortious injuries caused by
workers.
