Is Your Worker an Independent Contractor or an Employee?

On April 30, 2018, the California Supreme Court issued a decision entitled Dynamex Operations West, Inc. v. The Superior Court of Los Angeles County (Charles Lee), which evaluated whether workers in California should be classified as employees or as independent contractors for purposes of California wage orders. The California Supreme Court decided that all such workers are employees unless:

1. The worker is free from the control and direction of the hiring entity in the performance of the work, both pursuant to contact and in fact; and
2. The worker performs work that is outside the usual course of the hiring entity’s business; and
3. The worker is customarily engaged in an independently established trade, occupation, or business. The California Supreme Court concluded the failure to prove any one of the foregoing prerequisites was sufficient to establish that the worker is an included employee rather than an excluded independent contractor. Members employing independent contractors who don’t meet these criteria may face legal and financial risk when such workers should more properly be classified as employees.

CAP can help. Do you need:

• Help obtaining affordable workers’ compensation? Contact CAP Physicians Insurance Agency at 800-819-0061
• Help with your Human Resource questions? Call Nancy Brusegaard Johnson, CAP’s Senior Vice President of Human Resources and Operations, at 213-473- 8664 during business hours, 8:30 a.m. to 5:30 p.m.
• Coverage for your potential liability for the acts, errors, or omissions of your worker? Contact CAP’s Membership Services Department at 213-473-8647.

Margaret Lee Covey is Senior Counsel for CAP. Questions or comments related to this article should be directed to mcovey@CAPphysicians.com.