You work hard at your trade, and you deserve to be fairly compensated. Some employers, however, try to skirt California wage and hour laws by claiming a worker is an independent contractor rather than an employee.
The ABC test
AB 5 was a bill that addressed the difference between employees and independent contractors. It was signed into law in 2019. It laid out a test known as the “ABC test” that employers have to follow to determine if a worker is an employee or an independent contractor.
Per the ABC test, you are considered an employee unless you mean the following three conditions that make you an independent contractor:
- First, independent contractors are not controlled or directed by the employer in their work performance
- Second, independent contractors perform jobs that are not within the employer’s customary course of business, and
- Third, independent contractors customarily work independently in their established trade that is in the same nature as the work performed
Independent contractors generally have a contract governing their obligation towards the employer and the employer’s obligations towards them.
Why is it important to distinguish between independent contractors and employees?
There are key differences between independent contractors and employees. Employees are covered by labor and employment laws. For example, they are entitled to workers’ compensation and have rights regarding meal breaks, rest breaks and overtime pay.
Independent contractors are not subject to wage and hour laws. Some employers will try to misclassify employees as independent contractors to avoid having to comply with wage and hour laws. Misclassification of employees is against the law and employees misclassified as independent contractors may have a cause of action against their employer.
Know your rights as an employee
If you are an employee but your employer claims that you are an independent contractor, you will want to make sure you understand California wage and hour laws. If you are armed with the right knowledge and legal help you can protect your rights and interests.