Independent Contractor vs. Employee

Learn about the important distinctions and consequences of being classified as an independent contractor versus employee and how to enforce your rights if you’ve been misclassified.

Most of us remember the recent controversy over whether Uber and Lyft drivers should be classified as employees or independent contractors. At the time, the state of California passed AB 5, which went into effect on January 1, 2020. This new law reclassified most so-called gig workers as employees. Opposition to the new law grew quickly, not only among drivers, but among freelance workers such as  journalists, translators, photographers and musicians as well. That culminated in voters passing Proposition 22, by 58%. That modified AB 5 and made rideshare drivers, freelance workers and delivery app drivers independent contractors again.

As of 2021, the following groups are exempt from AB5:

• Content writers
• Editors
• Videographers
• Freelance writers
• Translators
• Photographers
• Musicians
• Rideshare drivers
• Delivery app drivers

It’s good to finally have some clear legal definitions of who is an independent contractor and who is an employee. However, unethical employers still try to get around offering benefits, overtime pay and the other rights that come with being an employee to save money.

If you believe you were misclassified as an independent contractor in an effort to not pay your fairly and deny you your rights as an employee in California, call the employment attorneys at The Dominguez Firm right away. We offer FREE and confidential consultations at 800-818-1818.

Below is an outline on the latest information regarding employee misclassification and some of the most common questions we receive regarding this legal topic.

What is the ABC test?

The following criteria, taken directly from the California Department of Industrial Relations website must be met to be considered an independent contractor:

• 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;
• The worker performs work that is outside the usual course of the hiring entity’s business; and
• The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Keep in mind, the IRS and the state of California consider a worker an employee unless proven otherwise.

Consequences of being misclassified as an independent contractor

If you are misclassified as an independent contractor instead of an employee, you would generally not have the right to:

• Overtime pay
• Meal and rest breaks
• Health insurance
• Paid sick and vacation days
• Workers’ compensation benefits
• A minimum wage

If you were misclassified as an independent contractor by your employer, you probably have a wage and hour claim against them for unpaid overtime and a legal minimum wage.

I believe my employer is misclassifying me on purpose, how long do I have to file a claim?

You have three years from the date of the most recent violation. However, the sooner you file your wage and hour claim the better. If you wait, it could seriously weaken your case. Your employer’s attorneys may question why you waited. They’ll cast doubt on the urgency of your financial situation if you wait months or even years to file your claim.

My employer fired me for filing a misclassification claim against them. Do I have any legal recourse?

Yes. Not only can your employer not fire you for exercising your legal rights, they’ll most likely be facing three lawsuits: one for wage and hour violations, another one for retaliation and one for wrongful termination.

The employment law attorneys at The Dominguez Firm can help

This area of law is always evolving. How you’re classified is extremely important to your financial well-being as well as your health if you’re injured.

The Dominguez Firm has an experienced team of employment lawyers ready to assist and get you the compensation you deserve.  And if there is no recovery, there is no fee!  Call now for a FREE and confidential consultation at 800-818-1818.