April 12, 2019- A ruling issued by the California Supreme Court has left many employers in questioning whether they should reclassify independent contractors.
Misclassified or Not? The Government will decide
According to the California Labor Commissioner’s website, many employers misclassify their employees as CA independent contractors, costing the state roughly $7 billion in lost payroll taxes each year.
The state Supreme Court, however, has taken matters into its own hands, issuing a decision that makes it more difficult for employers to classify their workers as independent contractors. “This is an effort to level the unequal playing field — misclassified workers have been taken advantage of for decades,” said Gutman Dickinson, a partner at Bush Gottlieb, representing the Teamsters Union’s port trucking campaign. The California Labor Commissioner’s Office and the courts have repeatedly found that port truck drivers were misclassified. Gutman Dickinson couldn’t think of a case when she thought a port trucker should have been an employee and the government found otherwise.
However, Michael Rubin, a lawyer who represented employee rights and civil rights groups and labor organizations in the case, states it will “accelerate the trend by states toward expanding worker protections, in part as a counterweight to the restrictions on worker rights under federal law”.
The ruling states “A worker may be denied the status of employee ‘only if the worker is the type of traditional independent contractor – such as an independent plumber or electrician – who would not reasonably have been viewed as working in the hiring business.”
In recent years, the hiring of workers as independent contractors has exploded. A 2016 study completed by economists at Harvard and Princeton universities estimated that 12.5 million employees currently identify as CA independent contractors, or 8.4% of the U.S. workforce.
If you or someone you know has experienced employee misclassification, please contact us. All consultations are free of charge. You may be eligible to be included in a Class Action Lawsuit.
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