San Francisco Employee Misclassification Lawyer
California employees receive important job benefits that independent contractors do not get. Under state and federal law, California employees receive overtime pay, meal and rest periods, and the minimum wage if they are non-exempt, plus health insurance for large employers, unemployment and disability insurance. In addition, employers must pay payroll and employment taxes to contribute to Medicare and Social Security benefits that the employee can access after retirement. Finally, employees are eligible for paid leave under state and federal statutes such as the Family Medical Leave Act (FMLA) or California Family Rights Act (CFRA). Many employers try to profit from denying benefits to employees by misclassifying them as independent contractors. If you have been misclassified as an independent contractor, you may be able to receive the value of certain of these employment benefits you have been denied, particularly where you were owed overtime or meal breaks.
At the McCormack Law Firm, San Francisco employment lawyer Bryan McCormack aggressively pursues claims of wage and hour violations, including claims for misclassification of employees as independent contractors. Attorney McCormack has over 20 years of experience representing employees who have been wronged by their employers and has a track record of success across all areas of California employment law.
The Difference Between an Employee and an Independent Contractor in California
An independent contractor is a self-employed person who performs services to another person or individual, typically on an as-needed basis. Although independent contractors are more common in certain industries, such as building contractors, graphic designers, housekeepers, web developers, writers and, of course, rideshare drivers, certain other professions could be independent contractors provided they pass the stringent tests provided by California law.
Independent contractors are defined by the relationship they have with the contracting business. The state law AB-5 addressed the distinction between employees and independent contractors. Under AB-5, a worker is considered an employee unless the hiring entity can show that each of the three elements of the “ABC test” applies:
A) The person 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.
B) The person performs work that is outside the usual course of the hiring entity’s business.
C) The person is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.
Notably, AB-5 assumes that a worker is an employee, and the burden rests with the hiring entity to prove that each of the above elements applies before a worker can be classified as an independent contractor.
As is often the case with general rules of law, there are exceptions in which the ABC test does not apply. For example, in general, the ABC test does not apply to the following occupations:
- Insurance agents
- Private investigators
- Securities broker-dealers
- Investment advisers
- Direct sales salespersons
- Commercial fishermen
Another exception to the application of the ABC test is certain workers who provide “professional services.” However, each occupation listed under this exception has specific qualifiers that must be met. In addition, before an employer can escape the application of the ABC test, they must prove each of the following:
- The individual has a business location separate from the employer’s workspace;
- The individual has a business license;
- The individual can set or negotiate their own rates;
- The individual can set their own hours, provided they meet the necessary deadlines;
- The individual customarily performs the same type of work and holds themselves out to other potential customers as offering similar services; and
- The individual regularly exercises their own judgment regarding how to perform their services.
When the ABC test does not apply (for example, where it is pre-empted by federal law), a test called the “Borello test” will apply. Under the Borello test, the court will consider the following factors to determine if a worker is an employee or an independent contractor:
- Whether the employer maintains control over the manner and means of completing the work;
- Whether the work being performed is an integral part of the employer’s business;
- Whether the employer provides the tools necessary to perform the work;
- Whether the work requires a specialized skill;
- Whether the work is the type that is typically performed by an independent contractor;
- The length of time the work is performed;
- Whether the worker is paid by the hour or by the job;
- Whether the worker has their own employees; and
- Whether the employer’s conduct gave rise to a reasonable belief on the part of the worker that they were an employer.
Unlike the ABC test, no single factor of the Borello test is determinative. In other words, when applying the Borello test, the court will consider all the factors and weigh them against each other. When applying the ABC test, the worker will be considered an employee unless the employer can prove all three elements.
AB-5 is a relatively new law, and employers across the state will inevitably misclassify workers. An employer does not need to intentionally misclassify a worker for them to have violated the law. Many California companies may believe they are complying with the law, when in fact, they are not. Workers who believe that they are being misclassified as an independent contact should reach out to a dedicated San Francisco employment attorney for assistance.
Contact a Bay Area Wage and Hour Attorney Today
If you believe that your employer has misclassified you as an independent contractor, reach out to McCormack Law Firm. As experienced San Francisco employment law attorneys, we have a firm grasp of the legal principles involved in all types of employment matters, including claims involving the misclassification of independent contractors. We handle all types of California employment law claims, including overtime pay disputes, minimum-wage violations, and other wage and hour violations. We also handle California employment discrimination cases, FMLA violations and wrongful terminations. To learn more and schedule a free consultation to speak with an attorney about your situation, call (415) 925-5161.