Classification of Independent Contractor by The California Supreme Court

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It is important to note that independent contractors can be considered as Employees, depending on whether or not the employer controls work, apart from the non-employment contract. In May '05, the California Supreme Court recognized the courier vehicle drivers as employees in a class action lawsuit between the courier company and the vehicle driver. (Dynamex Operations West, Inc. case)

The defendant claimed that the delivery truck drivers were independent contractors, but eventually they lost. In order to be recognized as an independent contractor rather than an employee, an employer must not control the service provider's work through instruction or interference. In addition, the independent contractor must engage in business that is independent of the employer's principal business or is customarily independent.

Employees are subject to labor laws such as accident insurance, minimum wage, overtime, and break time, but independent contractors are free from such obligation to comply with labor laws and can avoid various unfair dismissal cases except sexual harassment. Therefore, .

However, if an employer has the authority to control work and has actually interfered with such work, an employment relationship may be established even if a non-employment contract, such as a freelance or outsourcing contract, has been issued or a '1099' has been issued.

In order to avoid compliance with labor laws, if a person who is classified as an employee is classified as an independent contractor and then a government audit or class action is filed, the business may be liable for fines and damages due to legal liability. Classify the service provider as an independent contractor It is necessary to consult with an expert beforehand to make a decision.

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