employee Tag

06 Jan New Independent Contractor Law

Posted at 12:31h in Employment Categories, Employment Classifications, Independent Contractor

California's new independent contractor law went into effect on January 1, 2020. The law, commonly referred to as AB 5, would make it harder for employers to treat workers as independent contractors. It's too early to know exactly what effects the new law will have, but it will likely reshape the gig economy, which relies heavily on independent contractors. Effects of the new independent contractor law The practical effect of the new law is the reclassification of many independent contractors as employees. The new law changes the test used to determine whether someone is an employee or independent contractor. As of January 1, 2020, the law emphasizes the level of control that employers exert over the worker. And it focuses more on whether the worker's job is part of the employer's core business. In theory, this should require companies like Uber and Lyft to treat their drivers as employees. But it's unclear exactly what this will look like in practice. There is already legal controversy about the new law Even prior to it going into effect, Uber said it didn't intend to comply with AB 5. Uber and Postmates have already filed a lawsuit, claiming AB 5 is unconstitutional. More employers will likely file similar lawsuits. Furthermore, misclassified employees will likely start bringing lawsuits of their own. There are advantages to being an employee and misclassified employees can recover penalties from employers. So employers who refuse to comply with the new rules may find themselves defending lawsuits filed by misclassified independent contractors. If you believe your employer has misclassified you, contact the Khadder Law Firm today for a free initial consultation. For updates on this and more, follow us on Twitter and Instagram. And like us on Facebook....

She could be an employee or independent contractor

19 Nov Employee versus Independent Contractor

Posted at 15:45h in California Labor Code, California Law, Employment Categories, Employment Classifications, Federal Law, Independent Contractor, Wages

Many people are unsure what the different classifications of employee verus independent contractor mean. So what is an employee? What is an independent contractor? What's the difference between the two? And why does it matter? Employee versus independent contractor: what's the difference? People often use worker and employee to mean the same thing. But this isn't actually correct. Some workers are employees, others are independent contractors. So what's the difference? It's actually a fairly complicated legal question. Under both state and federal law, courts look at all kinds of factors to determine whether someone is an employee or an independent contractor. For simplicity's sake, someone is generally an employee when their employer exercises a lot of control over their work. For example, someone that goes to their company's place of business everyday, wears their company provided uniform, uses company equipment, and does what the company tells them to do all day is an employee. Employees work directly for the employer and the employer pays them and provides whatever benefits the employee might get. At least until recently, this has been the dominant working arrangement in developed economies. Conversely, an independent contractor is a worker that is not an employee. This traditionally meant someone who contracted to perform a certain task. For example, the plumber you hire to fix your leaky faucet is an independent contractor. You haven't hired her as employee. You've agreed to pay her to perform a specific task in exchange for a set fee. Once she's finished, you pay her and you both go your separate ways. Why the difference matters Employee versus independent contractor is not simply a legal distinction that exists only on paper. Whether someone is an employee or independent contractor has important real world consequences. First, employees are often entitled to certain benefits, such as health insurance or retirement plans. Independent contractors are not. Second, many labor and employment regulations apply only to employees. Most state and federal wage and hour laws don't apply to independent contractors. For example, you don't need to pay that plumber you hired minimum wage or overtime. Likewise, the state and federal laws prohibiting employment discrimination and workplace harassment generally do not apply to independent contractors. So if you're classified as independent contractor, you may not be to sue if you're discriminated against. Third, and finally, having employees requires employers to provide things like workers' compensation coverage. Conversely, a company does not need to provide workers' compensation coverage for its independent contractors. Likewise, for things like unemployment insurance and social security. The changing landscape Unsurprisingly, the use of independent contractors is on the rise. Companies see it as a way to cut costs without cutting vital labor. But this also leads to abuse. Companies often hire people as independent contractors even when they should technically be employees under the law. Of course, misclassifying employees as independent contractors is unlawful and companies can be subject to penalties for doing so. But, because most people wont sue, companies usually get away with it. Naturally, the increasing use of independent contractors has caused some push back. California recently passed a law cracking down on the use of independent contractors. Other states are also considering similar laws. These laws target workers in the gig economy, such as Uber or Lyft drivers, but will affect other workers as well. If you believe you are misclassified as independent contractor, contact the Khadder Law Firm today for a free consultation. For more follow us on Twitter and Instagram....

09 Oct New Bills to Make Uber, Lyft Drivers Employees

Posted at 15:09h in California Labor Code, California Law, Employment Categories, Independent Contractor

Following California's lead, other states are considering bills to make Uber and Lyft drivers, as well as other gig economy workers, employees. In September 2019, California's legislature passed Assembly Bill 5, which would change how the state regulates the use of independent contractors. In practice, AB 5 aims to make many workers in the gig economy, such as Uber and Lyft drivers, employees. Currently, such workers are independent contractors. Now, other states are mulling similar bills. Illinois lawmaker preparing bill to make Uber, Lyft drivers, others in gig economy, employees Illinois State Representative Will Guzzardi, will sponsored a bill similar to AB 5. Like AB 5, Guzzardi's bill targets gig economy workers, such as Uber drivers and food delivery app couriers, turning many into employees. Doing so would bring these workers under the protection of more labor regulations, such as the state's minimum wage laws. This effort is in the early stages and it's unclear how much support the bill will have. Either way, experts believe other states will follow California and Illinois in considering bills limiting the use of independent contractors. Lawmakers in other states will certainly be monitoring the reaction to these bills in California and Illinois. New York considering a bill that would extend some protections to non-employees New York State Senator Diane Savino says she'll introduce new legislation that would extend protections to"dependent workers," a new classification the bill would create. Unlike the California or Illinois bills, this bill does not intend to make Uber and Lyft drivers employees. Instead, it will extend certain employee protections to gig economy workers without making them employees. Critics say this is a half measure that will not do enough to combat what they say are Uber and Lyft's predatory employment practices. However, such an approach may prove more politically appetizing for lawmakers weary of radical changes to employment law. The difference between being an employee and an independent contractor is significant There are significant differences between being an employee and an independent contractor. State and federal labor law often does not extend to independent contractors. For example, independent contractors are often exempt from minimum wage laws. Unsurprisingly, employers regularly classify their employees as independent contractors. Unsure if you're properly classified? Read our blog post, for more information. If you believe your employer has missclassified you as an independent contractor, contact the Khadder Law Firm today for a free consultation. For updates on these bills and more, follow us on Twitter and Instagram....

30 Sep New bill that would make Uber and Lyft drivers employees

Posted at 13:57h in California Labor Code, California Law, California Supreme Court, Employment Classifications, Overtime, Wages

The California State Senate has passed Assembly Bill 5, a new bill that would make Uber and Lyft drivers employees, likely turning Uber and Lyft drivers into employees. If signed into law, the bill would restrict the use of independent contractors. Such a change would profoundly impact California's labor market. In particular, AB 5 would affect thousands of gig economy workers. This includes Uber and Lyft drivers and couriers for delivery apps such as Postmates and DoorDash. It could also affect Amazon warehouse workers and delivery drivers. New rules for determining whether a worker is an employee or independent contractor AB5 codifies and expands the California Supreme Court’s groundbreaking 2018 decision in Dynamex Operations West, Inc. v. Charles Lee. In that case, the court adopted a new test for determining when a worker is an employee. Under the new "ABC Test," a worker is presumed an employee and will deemed so unless the employer proves that: (1) that 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; (2) that the worker performs work that is outside the usual course of the hiring entity’s business; and (3) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. Uber and Lyft do not treat their workers as employees, but AB 5 would likely require them to do so Under previous law, employers could usually treat workers as independent contractors as long as they did not exercise direct control over workers’ schedules and tasks. This regime allows companies such as Uber, Lyft, Postmates, and DoorDash to treat their drivers and couriers as independent contractors. Under the rule codified in AB 5, companies must show that the worker performs work outside of the core of their business. Because transporting people is so central to Uber and Lyft’s business, it will be difficult for such companies to avoid treating their workers as employees. The effects of being an independent contractor are significant While it may see like a subtle distinction, the practical effects of being an independent contractor, as opposed to an employee, are significant. Many labor and employment laws apply only to employees. For example, in some circumstances, companies can pay independent contractors below minimum wage. Additionally, employers must also carry workers’ compensation insurance to cover all employees, but not independent contractors. Perhaps most critically, much of the state and federal law that prohibits employment discrimination does not apply to independent contractors. Accordingly, independent contractors often have no legal recourse for harassment and discrimination. Unsurprisingly, misclassification is common in California. The Department of Industrial Relations estimates that misclassification costs the State $7 billion per year in lost payroll tax revenue. Even if the governor signs AB 5 into law, employers will undoubtedly continue to misclassify workers. Uber and Lyft say they wont classify drivers as employees Uber and Lyft have already announced that they do not plan to reclassify their drivers as employees if the bill becomes law. They argue that they are technology companies, not transportation companies. Therefore, they contend that their drivers do not perform tasks that are core to their business. If AB 5 becomes law, this argument will surely be tested in court. AB 5 now goes to Governor Newsom, who is expected to sign it into law AB 5 now goes to Governor Gavin Newsom for signature. Newsom has already announced his support for the bill and will likely sign it. AB 5 would go into effect on January 1, 2020. For updates on AB 5 and more, follow us on Twitter and Instagram. If you believe you have been misclassified as an independent contractor, contact the Khadder Law Firm for a free consultation....

12 Mar What’s an independent contractor?

Posted at 10:30h in Employment Categories, Independent Contractor

What's an independent contractor? Put simply, someone that does work for an employer, but is not an employee. Unlike employees, who have an employment contract with their employers, independent contractors are not technically part of the company or organization for which they're doing work. Instead, they simply have a contract in which they agree to do certain work for that company or organization. Presumption against independent contractor status California law presumes that if you’re working for somebody, you are an employee. Accordingly, the employer bears the burden to prove that you are not an employee. Even if your contract says you're an independent contractor, that doesn't mean you're properly classified as an independent contractor. Courts consider a number of factors in determining whether someone is an independent contractor or an employee. If most of the factors show someone is an employee, they are legally an employee, regardless of what the contract says. What's an independent contractor? The main factor is level of control Courts look at many factors, but level of control is the main factor. In other words, what's the extent of the employer’s right to control the manner and means of the employee’s performance? If the employer exercises control over the person in terms of the manner and means of performing their job, then they are more likely an employee as opposed to an independent contractor. For example, if you hire an electrician to rewire your house, you're probably not micromanaging their work. You tell them what you want done, but you don't tell them what tools to use or how to manage their time. This type of relationship is typically not employer-employee. Conversely, if a company hires someone and tells them when and where to be during work hours, what they should be doing, and how to do it, he's probably an employee. Nature and length of the relationship Some of the other factors to consider are whether the hiring entity can terminate the employment relationship at will. If they can, this suggests it's an employer-employee relationship. Also, whether the worker is engaging in an occupation or business that is distinct from the employer’s business or occupation. For example, say a law firm hires somebody to do IT work for it here and there. That is a distinct business from the employer (meaning the law firm’s business). This would probably favor characterizing the IT person as an independent contractor. Conversely, suppose you're a salesperson at a shoe store. Their business is selling shoes and your job is selling shoes. That your job is a core part of their business makes it more likely that you're an employee. Courts also consider the length of time over which someone performs the work. If you hire someone for a few hours of work, they're probably not an employee. But if you hire someone to do that same thing every day for a year, that's different. The worker's authority also comes up. If you can hire and fire others, then you're probably an employee. Another issue to consider is how the employer pays. Do they pay an hourly rate? A regularly salary? Or per job? For example, take that IT professional. If she's paid for each computer that she sets up, this might favor being characterized as an independent contractor. Conversely, if the law firm paid her a certain amount every month to run their IT, that would make it more likely that she is an employee. Type of work and skill involved There's also the worker's skill. If you’re an IT professional and you’re coming in and setting up a computer for a business you're likely an independent contractor. That's because you're likely doing it without any supervision or direction by the company that has hired you. Another factor is the skill that’s required to perform the work. Also, whether the business provides the instrumentalities, tools, and place of work. For instance, if you do landscaping or cleaning services, and you bring your own cleaning or landscaping tools, and you do it at the hirer’s residence or place of business, then you might be considered an independent contractor. If a contract says you're independent contract, it doesn't necessarily mean you are. But courts will consider that. If the parties believe they are creating an employment relationship, or if they believe they are creating an independent contractor relationship, then that fact is also used in determining whether you should be an independent contractor or an employee. If you believe that your employer has wrongfully classified you as an independent contractor, contact the Khadder Law Firm today for a free initial consultation. For more, follow us on Twitter and Instagram....