In California, the burden is on the company, as the employer, to prove that a certain worker is not an employee, but rather an independent contractor. The principal question is whether the person or company to whom service is rendered has the right to control the manner and means of accomplishing the result desired.
However, this does not end the inquiry. Beyond the primary question whether the principal retains the right to control the manner and details of the work, California courts look to a number of secondary factors regarding the nature of a service relationship. These include:
(a) whether the one performing services is engaged in a distinct occupation or business;
(b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
(c) the skill required in the particular occupation;
(d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work;
(e) the length of time for which the services are to be performed;
(f) the method of payment, whether by the time or by the job;
(g) whether or not the work is a part of the regular business of the principal; and
(h) whether or not the parties believe they are creating the relationship of employer-employee.
The foregoing factors cannot be applied mechanically as separate tests. Rather, they are intertwined, and how courts attribute weight to any one of the factors often depends on the particular combinations of the factors and circumstances of the case. To determine whether a worker is an employee or independent contractor, courts evaluate each the facts of each service arrangement, recognizing that the dispositive circumstances may vary from case to case. Moreover, with respect to the sharing economy, at least one California court has acknowledged that the application of the traditional test of employment — a test which admittedly evolved under an economic model vastly different from the new ‘sharing economy — creates significant challenges.
Because of the sheer number of factors affecting classification and the complexity of the classification issue itself, it is imperative that businesses consult with an attorney both prior to entering into a relationship with a particular worker, as well as over the course of the relationship with the worker. Proactive action on the part of employers may help to mitigate misunderstandings regarding the nature of the relationship with its workers, and avoid litigation.
Smith Shapourian & Mignano, LLP is available to answer any questions or concerns you may have regarding classification of your businesses’ workers, as well as to litigate any disputes related to classification. Please contact us for a consultation.
This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.