A Reexamination of Independent Contractor vs. Employee Status in 2018

May 16, 2018

Employment Law

Have you been working as an independent contractor but would like the protections of an employee (e.g. minimum wage, rest periods, etc.)? On 4/30/2018, the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court adopted a new standard that you are an independent contractor only if your employer establishes that:

1. “[T]he worker is free from the control and direction of the hirer in connection with the performance of the work.” Dynamex Operations West v. Superior Court, No. S222732, pg. 29 (April 30, 2018).
2. “[T]he worker performs work that is outside the usual course of the hiring entity’s business.” at 7. For example, “when a clothing manufacturing company hires work-at-home seamstresses to make dresses from cloth and patterns supplied by the company that will thereafter be sold by the company,” or “when a bakery hires cake decorators to work on a regular basis on its custom-designed cakes,” the workers are part of the hiring entity’s usual course of business. Id. at 70.
3. The worker “must be customarily engaged in an independently established trade, occupation or business of the same nature as the work performed,” by considering factors such as the worker’s “incorporation, licensure, advertisements, routine offerings to provide the services of the independent business to the public or to a number of potential customers.” Id. at 7.

Thus, if your employer fails to meet any of these three requirements, then you are entitled to the protections under the California Wage Orders, such as minimum wage. Because understanding these new standards can be overwhelming, it is best that you speak to a labor and employment attorney to properly determine whether these protections may apply.