As in other states, California labor law distinguishes between two broad categories of workers: company employees and “independent contractors.”
Unfortunately, employers sometimes misclassify workers as independent contractors, whether by mistake or in an effort to reduce costs for their company. For workers, that can mean losing out on important labor protections and benefits.
What determines whether a worker is an employee?
Under California law, most companies must follow certain basic guidelines when determining whether a worker is an employee or an independent contractor. Generally, an independent contractor position must meet three criteria:
- The contractor has control over how, when and where to perform work
- The contracted work is outside of the usual scope of the hiring company’s business
- The worker is independently established as providing trade, occupational or business services of the same kind they perform under the contract
However, there are many types of professions that may be exempt from these guidelines, including writers, artists, appraisers, rideshare drivers and other contracted workers who provide specialized services.
Why does classification matter?
While independent contractors may enjoy greater work flexibility, they are also ineligible for many of the protections and benefits of full employees, including:
- Workers’ compensation and unemployment benefits
- Minimum wage and overtime pay guarantees
- Paid sick days and family leave
- Legal protections against discrimination, harassment and retaliation
- The right to unionize
California labor law is complex and continually changing. Proper classification of workers may depend on both the specific professional services they provide and their relationship with the employer. However, workers should know that how they are classified can have a serious impact on their earning capability, job security, and protection from unfair and/or opportunistic hiring and employment practices.
