Articles Posted in Posts for Employers

The Independent Contractor classification may not be dead, but it is seriously wounded. The California Supreme Court recently announced a new test for determining whether a worker is an employee or an independent contractor in the landmark decision of Dynamex Operations West, Inc. v. Superior Court of Los Angeles, No. S222732 (Cal. Sup. Ct. Apr. 30, 2018).

Under the new Dynamex decision, a hiring entity classifying an individual as an independent contractor now bears the burden of establishing that such a classification is proper under the “ABC test.” To do so, the entity must prove each of the following three factors:

(A)  that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

We’ve all heard the cliché saying, “It’s cheaper to keep her.” While it may be relevant in divorce, and a good reason to strive for a happy marriage, it may not be a good mantra for business. The greatness of American business is rooted in “Mom and Pop Shops” — small, family-owned, businesses with a minimum number of employees. The appeal of these small businesses are low start-up costs and exclusive control. However, exclusive control is just a facade as Mom and Pop still need to be compliant with the law.

California employment laws are expansive and evolving. According to the Department of Industrial Relations, thirty-two employment-related laws were amended in 2016, and in 2015, there were over 110 amendments or additions. In other words, unless Mom and Pop receive yearly training, they are already falling behind. This is the same for any company, but the difference is that larger companies can terminate their payroll personnel if a mistake is made. Pop can’t exactly fire Mom if she miscalculates overtime.

So, what is Pop to do? The answer is simple: get Mom some help so she doesn’t make a mistake. If a mistake is made, consult an attorney before it becomes a lawsuit. Here are three tips from an employment lawyer to help Mom and Pop avoid common obstacles in operating a business.

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