I Have To Keep Believing That The Weather In California Is Fantastic
There sure are a lot of reasons to not like my adopted state. Now, the State Supreme Court has made a ruling that could be costly for any company like mine that pays anyone as an Independent Contractor.
Decision: Dynamex Operations West, Inc. v. Superior Court
Date: April 30, 2018.
One Statement Says It All:
“The Court held that it is the burden of the hiring entity to establish that a worker is an independent contractor who was not intended to be included within the applicable wage order’s coverage”.
And This One:
“To meet this burden, the hiring entity must establish EACH of the following three factors, commonly known as the “ABC test”.
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; AND
B. THAT THE WORKER PERFORMS WORK THAT IS OUTSIDE THE USUAL COURSE OF THE HIRING ENTITY’S BUSINESS; AND
C. That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
And: The court held that there is a presumption that the individuals are employees and that the entity classifying an individual as an independent contractor bears the burden of establishing that such a classification is proper under the “ABC test” used in some other states.
Time For All Companies That Pay Independent Contractors
And all people who are paid as IC’s to do a little research yesterday. I am talking to you Real Estate Companies, Property Management Firms and so forth. Should include Education Companies.
This is a State Supreme Court decision so I believe that CAR will be sending out legal statements soon. I believe their heavy hitters, they are all in Sacramento this week, so I hope we hear something soon.
Love the term “in fact”. That means you can have a contract with someone agreeing that he/she is an IC, but that does make them one in the eyes of the State.
Why Could This Be A Problem For A Company?
Social Security and Employment Tax and Worker’s Compensation Insurance.
Is a licensee selling real estate, “outside the usual course of the hiring entity’s business”? Now, that is the question.
When does somebody have to change? I sure do not have any idea.
This regulation should be called, “The full employment act for CA Employment Attorneys and Insurance Agents.”
See you in court.