Independent contractors are not entitled to many of the protections extended to employees. For example, the minimum wage, overtime, and meal and rest break laws do not apply to independent contractors. Accordingly, it can be enticing for businesses seeking to cut labor costs to classify their workers as independent contractors. However, this classification is not always justified.
Importantly, courts generally disregard a company’s labels when evaluating whether an individual is actually an independent contractor or an employee. Even contracts signed by the company and employee agreeing that the individual is an independent contractor are not determinative. Instead, courts look beneath the label at the factual circumstances of the working relationship to determine the appropriate classification.
The primary test is the amount of control the company exerts over the details of how the worker performs his or her job. Generally, an independent contractor is subject to a company’s direction only in the result of the work, but not in the means used to accomplish that result. In contrast, an employee is subject to the company’s control not only as to the results of the work, but also as to the manner and means used to accomplish that result. Courts look at numerous factors to assess the level of control a company exerts over a worker.
Individuals who have been misclassified as independent contractors can often recover unpaid wages, overtime, reimbursement for work expenses, and an assortment of penalties under the California Labor Code.
The Hayes Employment Law Practice has prosecuted and defended a wide variety of cases involving the proper classification for workers. If you have an issue regarding possible misclassification, please call us to discuss your situation at (626) 808-HELP (4357).