We regularly see situations in which
employers are trying to skirt their responsibilities under the employee-employer relationship. The most common way they try and skirt that
responsibility is by the misclassification of individuals as independent contractors,
when in reality they’re employees. Historically, to determine if someone was
an employee versus an independent contractor was a very lengthy analysis.
In fact, under some of the analysis there were up to 20 different factors that
went in a play to determine whether or not you should have been classified as
an employee. Earlier this year in 2018, the California Supreme Court came out
with a landmark decision that made the determination between an independent
contractor and an employee much simpler. It’s commonly referred to as the ABC
test. The first factor of the ABC test is quite frankly a carry over for
pre-existing law and it really boils down to “is the individual that’s
performing the services free from the control and direction of the person that
hired them?” In other words, if you’re able to do whatever you want how you want to
do it as long as the end product or the end result is what they bargained for,
then you’re probably an independent contractor. Conversely, if instead you
have to follow certain guidelines, certain protocols, certain ways to do it,
certain dates and times to do it and the employer is controlling how you get
there, then you’re probably an employee not an independent contractor. The second prong of the ABC test is probably the easiest to determine if there’s a
violation or not and that has to do with whether or not you’re performing
services that are in the same industry as your potential employer. For example,
if your employer is in the janitorial business and you’re performing
janitorial services, then that’s most likely an employee situation and they
would violate the ABC test. Conversely, if your employer is in the
accounting industry or is an accountant and you’re providing janitorial services
at their accounting firm, that’s outside their industry and thus would satisfy
the ABC test and you’re probably an independent contractor. The third factor
is a little bit of a carryover from the prior law but it’s also a very critical
one. It has to do is whether or not the employee or the person performing the
services engaged in that same line of work
independent of who they’re working for for this job. For example, to use the
janitor exception from a minute ago: if you perform a janitorial services at
lots of different buildings then you’re probably a independent contractor.
Conversely, if you’re performing janitorial services only for this one
firm every single day, day in day out and you don’t have your own independent
business outside of that, then you’re probably an employee. The California
Supreme Court has realized that we had too many factors to determine if someone
was an employee versus an independent contractor. The new ABC test is fantastic
in that it simplifies it for everybody and it makes it a simpler easier
guideline to follow.