On September 4, 2020, California Governor Gavin Newsom signed legislation (AB 2257) expanding the exemptions to the state’s ABC test, which is used to determine whether an individual is an employee or an independent contractor (worker classification) under the California Labor Code, Unemployment Insurance code, and Industrial Welfare Commission wage orders.
Our podcast explains the difference between an independent contractor and an employee. The courts and government agencies use many factors to determine independent contractor status. Calling someone an "independent contractor" does not make him/her an independent contractor in the legal sense. Mislabeling a worker as an independent contractor creates potential liability for employment taxes and penalties, and liability for failure to fulfill the many legal obligations owed to an employee, such as wage and hour requirements. For your own protection, make sure that a person working as an independent contractor truly meets the difficult tests required by law.
Tags: employee vs independent contractor, misclassifying employees, misclassify employees, independent contractor, employee
